All Forum Posts by: Marcus Johnson

If you and your boyfriend are both on the note, what is your exit strategy should you break up?

It spends on the investor. I prefer to manage properties myself because when your around you get to know the neighborhoods real we'll. plus the conversations I have with the tenants and the neighbors could never be developed by a hands off owner. The people I talk I give me feedback, information such as possible rentals that are coming on the market and the latest on the happenings surrounding the house. Plus I can see for my own eyes the condition of the rental.

I think it's human nature to want to veer away from Dave Ranseys plan because it requires sacrifice and is hard. I mean, if you actually have to save up for something to eliminate risk, it's hard because most of us are impatient an want it now. So that is why most people would rather go with Kryisoki's methods.

Here's the thing you have to consider. Real estate is great. I own a duplex and I cash flows $450 a month. I also have a 401k and they match 6.75%. I also Max out my Roth IRA's. The thn we should all realize is that when you sell an investment property we are taxed pretty heavily. Plus although I cash flow $450 a month, all it takes is one big problem to deplete all of your earnings. 401k's are also taxed when you withdrawal your earnings in retirement and throughout history have a good ROI except that they have higher management fees. Roth IRA's aren't taxed at retirement and if you invest for 30 years for example and earn the average of 11% as the s&p 500 has done you'll have ell over a million dollars tax free.

The risk isn't low, because you only have 25k to your name and have to borrow 20k.  Stuff happens that your not prepared for when investing in Real Estate and not having EF funds can bring you to bankruptcy.  Your only looking at the upside.  Roofs leak, problems within the walls, other things you didn't see until you starting tearing things apart appear.  Now you expenses have doubled.   Plus what if you cannot make the mortgage payment each week your trying to finish the project.  Do you borrow more money at high interest?  

When you buy with cash down or a large DP and cash reserves, you minimize your risk level.    I only invest in real estate where I put 20% to 25% down with cash reserves.  Yes it is a slower process then most, but during the last housing bubble I didn't suffer at all.  Investors that were highly leveraged were losing their face.   In fact I was able to buy a lot of index funds in 2008 and 2009 because everyone was selling and I was buying cheap.  

I absolutely do deny that Dave Ramsey made millions by buying rental properties and investing in the stock market.  He made millions through creating his debt education program.

That isn't what Dave Ramsey says.  

Originally posted by @Larry Turowski:

He doesn't teach about investing.  He teaches how to get out of debt and stay out of debt.   But all debt is not the same.  There there truly is stupid debt and smart debt.  And smart debt is an investors friend.   

Have you ever read one of his books?  He speaks about investing all the time.  Total Money Makeover and "How to make More then enough" to name a few.  Please don't make an assumption unless you've read his books.  Listen to his radio show once, he has entire espisodes devoted to investing.  His talk show spends a lot of time on the subject.  

Originally posted by @Larry Turowski:

Originally posted by @Marcus Johnson:

C'mon everyone, let's be realistic about this. Most of us don't have the discipline to pay cash for your investment properties, because it would take a long time to acquire properties. 

 It has nothing to do with discipline.  It is about being smart with your investment decisions.

 His idea to pay for Real Estate in cash is a smart investment choice as I wrote about in my original post.  As for being disciplined, I stated in my first post that believe that most people couldn't have the patience or discipline to pay for real estate in cash.   We live in a society where we want things now and if it creates hardship when you have to be patient.  Dave Ramsey made millions through creating businesses, buying rental properties and investing in the stock market.  He did it without debt, you cannot deny that.  Just because most people here don't have the fortitude to follow his ideas doesn't make it no smart.  You just don't agree with his methods.   I myself don't follow his methods to the tee, I only carry debt on real estate, and I always put 20 to 25% down to limit my risk.   

@Joshua Feit, yes most people justify debt in order to jump into buying real estate investments faster.   Dave Ramsey is a very wealthy man and didn't need debt to build up his portfolio.  He is just trying to get people to know there is another way then going into debt when investing.  Most of us are like cattle in a herd.  We're followers.  

C'mon everyone, let's be realistic about this. Most of us don't have the discipline to pay cash for your investment properties, because it would take a long time to acquire properties. Most of us end up borrowing money, because we are so excited to jump into the property investment market that we're willing to take on enormous risk.

Dave Ramsey's plan if you don't know is that his strategy is to pay cash for your rental properties by saving as much money as you can and living on beans and rice. The first property could take 3-5 years. The second might do the same. So after 10 years you may have 3 properties owned clear and free. The more property you have mortgage free your able to multiply your savings X?. So for example if you have 3 duplex's and after all expenses your clearing $1,500 each month, that's $4,500. $4,500 X 12 months = $54,000. Take that amount plus whatever disposable cash you may have and you can add a fourth mortgage free property. Keep doing this and you could have 10 paid for properties in 20 years easily.

So don't discount Dave's strategy. I just don't believe most people have the patience.

I'm more of an in between type investor, where I put 20% to 25% on my properties with cash reserves for EF's.