All Forum Posts by: Leslie Beia

Sorry if I was unclear. I'm refi'ing OUT of hard money into a bank loan, 80% LTV. Investments are investments- I think everyone understands that there is no guarantee for the return, but many potential benefits including the payout coming tax-free. We are already partnering on multiple properties so this is part of a larger plan, I just was wondering if there were other ways to think about the proportion of cash to equity. I'm thinking that $30k, which is what I'd like to pull out of the property, would be 30% of the 90k equity I created, but I'm wondering if it's just that simple or are there other things I should consider?

 Do you have any thoughts on asset type that you'd like to share?

I am planning to offer an equity position to a friend in a property I am currently in the process of refinancing. I was planning to do cash-out, but there are several factors coming together that is making that a less attractive option (higher interest rate, longer seasoning). However, I really do need some cash after a few unexpected life twists, and this property has a bunch of cash tied up in it. It would be worth it to me to offer an equity stake in exchange for cash, I'm just not sure how to fairly structure this for both parties. 

The house has appraised for $335k, my hard money note is for $242k, and I'm looking at only about $15k out once closing costs, taxes, and insurance are accounted for. Cash out would take me from a 7.25% rate to 8%, which is a few hundred dollars per month, and they will likely make me wait all through March to do the cash out to meet seasoning which is another $2400 interest payment I could avoid if we could refi by the end of this month. I'd like to get $30k, I'm just not sure how to calculate the percentage of ownership that would amount to. The property is in a solid area where Neighborhood Scout puts it at the highest rating for appreciation, predicting 40% appreciation over the next 3 years, and we'd look to refi or do a HELOC in 3-5 years to realize that gain, and I'd probably buy them out with my portion at that time. Any thoughts on how to figure out the JV?

 I need to clarify that $15k is not my FI number, it's an ideal goal I'd like to reach! FI is more like $7k, I've got a sweet little house and live a pretty simple life. RE prices up in NW MI are on par with Austin, where I just moved from, but are going up not down :). I am looking into small commercial this coming week, it might be a better path. Thanks for the thoughts!

I imagine REIT's and/or syndications- I'm aware but really haven't done much research!

 Wealth and security are wonderful, and that's why she's staying. But her company, like so many, has whittled down their actual service to the point that they aren't really doing useful work, just enriching the CEO. There is no opportunity for her to advance, she is unable to actually help her clients, and she hasn't had a raise in 3 years, where it used to be every year. It's soul-crushing, and no one should spend the bulk of their lives dreading going to work. Isn't that why many people get into RE? 

$15k is a goal, and I do understand that it's a big one, at least if we are dealing w/ SFH's. I'm focused on using the skills I'm comfortable with and getting better at them to create equity that we can leverage in 5-10 years and get into something bigger. Just thinking ahead here.

Thanks! I want to be clear that there is no intention to spend all that money quickly, or even all of it at all. I just mentioned that number because I know it expands our options, and I don't want to limit my thinking to just what I'm already familiar with. That said, I'm comfortable with the BRRRR strategy, I understand how it can help us build net worth and also limit the actual cash in and therefore risk to her. So I am probably not going to shift to a whole new strategy, but build upon the skills I've developed to do better deals. I would like to start thinking about a good next step, in 5 years or so, where we put the equity we've created to use in more passive assets. For now, I'm mostly focused on identifying the right markets. This response is a shift from what I originally posted I know- I spent all weekend down the rabbit hole and have clarified my thoughts a bit, which was what I was looking to do when I posted!

Hi Greg!

Found your post searching for others who have capital to deploy to get started, and I've learned a lot from this thread. Curious if in the past few months you've come to some clarity about what you'd like to do? I'm focused on Detroit and northwest MI, very different markets/strategies, and hoping the two will balance out and offer some diversification. I think our fresh water and cooler temps are going to be very attractive as the climate gets hotter! That's my hot investment tip :).

Thank you Greg! I agree, which is what compelled me to post. In my own journey, capital was always the limiting factor, so SFH's are just the default. I know there are ways to deploy the capital that will get us to our goal faster, I'm just well aware of my personal experience gap. In regards to Detroit, all signs point to growth but now with Trump in office I'm very nervous- tariffs on Canada would really hurt us. Also massive cuts to government spending that support recovering economies would not be good for that city. Do you think it would be better to focus on the more expensive areas- I'm in the Grand Traverse region- and if so, what assets? Thank you!

Hi All!

I've been investing for 5 years, combo of BRRRR, Airbnb, and flips, near me and out of state. I listen to podcasts and read books and have absorbed a ton of information over the years, so I'm familiar with numerous strategies, at least in concept. This year, I'm partnering with my sister, who is in a miserable corporate job taking her nowhere. But she has the W2 income and around $500k cash she's able to deploy towards our goal, which is to reach 'financial freedom' in 5-10 years. For me, that looks like around $15k/month income (and I'm starting from very little- long story). I have her figuring out her FI number, it's going to be a lot more than mine, but she also has a substantial 401k. So I'm thinking a good target will be around $30k/month to replace both of our incomes and live how we want to live, respectively.

We both live in MI and my current plan is to invest in single- and multi-family in solid, path-of-progress neighborhoods in metro Detroit, and also get some larger SFH's in the more expensive market where we live and do rent-by-the-room/co-living. We have a very severe affordable housing issue here! We are both committed to re-investing any cash flow back into the asset to snowball equity as quickly as possible. I like MI because of our climate, which is relatively stable compared to much of the country. I think our cooler climate and fresh water resources are going to attract a lot of population in coming years, especially as CA/FL become impossibly expensive for many people.

I'd love feedback and advice from those of you who are well ahead of me. I've resisted long term rentals, but am finally accepting that this is the most boring but solid way to create wealth. I am definitely focused on appreciation over cash flow. I am planning to BRRRR in DET and do turn-key up here as we are so short on labor. Are there other pathways I should consider, based on my goals and experience? I'm going to be doing all the research and execution, and I would self-manage the co-living at least the 1st year or two to learn it. Regular LTR's in DET would be fully managed. I love doing flips but I don't often see enough spread in DET and again, labor is too scarce up here to make it viable. It's exciting to have capital, I just want to be very careful and strategic. Thanks in advance for any insight!