All Forum Posts by: Kyle Davis

Those of you out there that are local investors in small multifamily, do you prefer to self manage or hire a management company? There is a seemingly very reputable company in my town and I'm considering turning management over to them. They charge 8% gross rents, seems reasonable. I run other businesses and I don't want to actively manage rental myself. Say one unit has $1500/mo in rents, that's only $120/mo for management...seems very worth it... Curious to hear your thoughts and opinions on this. Get management from day #1 or self manage for a little while and retain that management fee for myself? Thanks!

For those of you that have a buy and hold strategy, how much do you budget monthly for repairs and capex?  

Thank you all so much for the input, very helpful info.  Much appreciated!  

Hey everyone, 

I'm under contract with my first 2 unit building here, closing within the next month or so.  After the deal is done, I should be positive cash flowing about $500/mo.  My question is, and curiosity to what other buy and hold investors are doing, is the following. 

Do I A) save that cashflow and let it accumulate to a point where I use that for a downpayment on another buy and hold property?  or B) at the end of the year, do I take that $6,000 in annual cashflow ($500x12 months), and apply that to the principal on the mortgage to pay down the loan as fast as possible.  

My overall goal is to build a rental portfolio where it 100% replaces my income and covers my families monthly expenses.  I own another business and our household monthly income comes from this primarily, I don't need the cashflow on a month to month basis for personal expenses.  

Any feedback would be greatly appreciated.  I love the idea of getting the mortgages paid down as quick as possible, however, I don't want to put off acquiring additional rentals until each unit is paid off.  In the course of say 10 years, having 3 units free and clear OR within that 10 year time frame have say, 20 units with mortgages on all, but all are cash flowing.

Thank you all for the input, greatly appreciate it!

This is a two part question, I'm curious to know how both buy and hold and flippers distribute their cash flow or profits to themselves.

Scenario #1: Your a house flipper, you finish a project and profit $30,000.  Of that $30,000, how much do pull out to 'keep to pay yourself'?  Do you take the entire profit as 'income'?  Do you take say $15,000 in 'income' and leave the other $15,000 in the bank to help invest in the new flip? 

Scenario #2: Your a buy and hold investor, you cashflow on a property $500/mo.  Of that $500, how much do you provide to yourself as 'income' vs. keeping it in the bank or invested back to your business.  I.E. will you pay yourself say $250/mo. and then leave $250/mo. in the bank to account for potential repairs, capital for new investments etc.?  

Thanks!