All Forum Posts by: Lloyd Preece

Only seen HELOCs on primarys, however i do remember David Green saying his team had HELOCs on rental properties a few weeks ago so maybe look at his lending business

Spend the next 6 months reading books and listening to podcasts. Then make the decision to invest in your first SFH or househack. Not so important what you decide, it is more important that you decide. First investment wont make you rich and wont make you poor as the pod hosts say!
Books, start with: Set for Life, Rich dad poor dad, The Millionaire real estate investor.
Then: building wealth one house at a time, the book on rental propery investing, cashflow quadrant, millioinaire next door.
Podcasts: BP real estate podcast, on the market, zen and the art of RE investing, BP Money, millionaires unveiled.

If you read 2 books a month and listen to pods on your commutes and walk for 6 months, then analyse 1 deal per day in an accessible market you'll be well on your way and ready to go by Q1 2024!

Depends on your financial position. Cash used to pay down equity isn’t lost liquidity as it is accessible via a line of credit or potential refi, however that comes with cost. All things being equals I’d err toward continuing paying the interest if you believe you can achieve greater than 6.8% total return putting that cash to other uses, which is very achievable.

Pay weekly or buy the sub-project within the rehab. Request videos, pics and materials receipt ahead of each payment. Holding vendors accountable through instalment paying but also paying in a timely fashion is a fair way to do things

Closed on another one a couple of weeks back. Value add small multi in SS Bethlehem. Definitely tough to cashflow at current rates but I've found that what is working in this market is taking a longer term BRRRR view ie add value, increase rents, build equity and hold on for 1-2 years to refi when rates are in your favour then you should find yourself in a good spot from an ROI and ROE perspective.

I figure $1M per unit then an additional $1M umbrella. So a SFH/Condo will have $1M initial protection and Multis will have $1M per unit. Then on top of all of that have a $1M umbrella. I found with state farm it was much cheaper to add extra coverage on each house individually compared to adding coverage into the umbrella

Do both, start with the HH if you can and make sure you consider the amount you’re saving in lack of rent and loan pay down in your numbers. You won’t live for free in LI but likely live for cheaper. Then take that extra saved capital and find an out of state market. Also, worth considering landlord tenant laws and if you want to deal with NY tenant rights in the long term . You don’t have to go too far out of state, anywhere in the US will have cash flowing rentals within a couple hours drive. Know for a fact Lehigh Valley and New Haven both have cashflow if that’s what you’re after.

Have one in Bethlehem PA, been great in terms of payment reliability and quality of tenants so far

NYC is tough to make work, but couple of things. “Anywhere in the US has cash flowing rental properties within 2 hour drive” is something Brandon used to say years ago on the pod. If you’re looking for a pure rental you need to go north or west. Out to CT you’ll find cashflow in the New Haven area and out to PA you’ll find cash flow in the Lehigh Valley. You can do 2-4 unit MF in either market with the capital you mentioned.

If you want to house hack and still be in a reasonable distance to commute to Manhattan look at Hudson county. I HH’d a 2 bed condo in Weehawken (10 min bus to city) and it saves me a lot of cash Vs renting in Manhattan. If you want to “properly” HH a multi, look at Union City, JC heights, or even further out towards Montclair/Bloomfield. Good luck!

Hi team, question regarding how to incorporate Property Value Appreciation into Net Worth number and Performance Numbers..

When I do my monthly/annual net worth spreadsheets and when I review individual property performance, one of the thing I always struggle with is inputting a number for current property value. Obviously calculating metrics such as realized cash on cash returns, loan paydown and ROI (Ex Appreciation) is easy to do since the profit/loss is visible and felt. However, as we all know Appreciation oftentimes tends to be the biggest driver of wealth building and is up to interpretation when youre homes aren't on the market, especially in this changing environment.

When you all review your property performance and net worth numbers, how do you incorporate Appreciation of your RE assets? 
A few methods I've considered:
1) Getting properties appraised once per year and using that number
2) Taking regional %change stats and applying them to my purchase price since date of initial investment
3) Looking at comps in the area and applying an average
4) Asking RE agent to give their estimate of what it is worth today
5) Not accounting for Appreciation at all in my performance numbers and simply treating it as icing

What do you guys do? Any thoughts/methods welcome!