All Forum Posts by: Kirby Davis

Hey everyone. I am working towards buying my 1st investment property. I've been using the rental calculator and I have this deal in the works. Wanting to get some opinions from more experienced investors and see if this is a good 1st deal to get my addiction started. Take a look at my report and lmk what you guys think. 

@Kirby Davis - Based on the tremendous value you added to the farm in a very short period of time, would you consider buying more farmland and building more farms?  Maybe lease the finished product to other farmers so your husband doesn't have to manage day-to-day operations?  You obviously have a special skill set and valuable expertise, and I would consider running with that as far as it can take you.     

Multifamily is an entirely different game, and an over-valued, over-saturated one at that.  It's a tough time in the cycle for a newcomer, and $800k would be a lot of money to put into your first deal.  Just know that you're on a site dominated by multifamily investors, so there's going to be a bias there.  The biggest factor in determining the best use of this money is YOU - your knowledge, your network and your unfair advantage.    

Your profile indicates that you bought a $2.9MM farm with $50k down with an annual cash on cash of 200%.  I think we'd all like to hear how you did that!  If you could pull this off a few more times, you could afford to replace your husband with hired help and would have more cash flow than you'd ever need.

Investing in real estate is far from passive, you are not going to escape have to put in many long hours although the work is obviously far less physical than farming it can be high stress. Do not think of real estate investing as being passive, it is not and it is definatly not for everyone. If you want passive you will need to invest in a REIT, income fund or something similar. You should be able to average about 10% long term.

I would suggest if you do not have a financial advisor you should get one and have them advise you on where the best place is to put your money based on your present lifestyle and future plans.  

Agree with @Jay Hinrichs on looking at the tax implications on the net $800k.  That is going to dictate how necessary a 1031 really is in terms of preserving capital.   

My suggestion.... If a 1031 is not necessary then I would suggest slowly (seek deals) dispersing it across properties and asset classes.  There is no need to max lever up and go into a large overpriced multi....  Buy some smaller properties (smaller multi, 4-families, or commercial), pick up some REITs, buy some equities, etc.  If the 800k is the bulk of your net worth, I would not suggest going "all in" on one property especially if you are not experienced in that asset class.

If a 1031 is necessary then I would start seeking out those properties now.  I would avoid getting highly levered in this market.  

General notes and my opinion on a 1031.... Its is always great to save on taxes, but you need to balance that tax deferment with you ability to patiently seek out quality deals.  I have seen many people foam at the mouth to get into overpriced 1031 to save a little bit on taxes.  Que the 1031 guys to start hating on me for that comment.      

@Jay Hinrichs, I'm pretty sure @Kirby Davis just called you old :)- Originally posted by @Kirby Davis: @Jay Hinrichs Thank you! Definitely the kind of advice I’m looking for from someone with such great knowledge and experience.

Good advice Jay, your place on the timeline of life is of utmost importance in any strategy.

Forget the leverage and Ramsey crowds.  Where's the line for the party crowd?!!