All Forum Posts by: Marc Strickling

Eric McCully I completely agree.  As a fellow CFP the question people always ask is 'should I payoff my loans'?  Answer for most people is that it is personal preference.  If they feel better going to sleep at night knowing they have no debt then go for it.  However,  if they have the cash reserves to survive a pull back in the market I can almost always show the numbers on paper it's best to keep the debt.  By the way I am a 25 year RE investor I am looking to refinance again.

It doesn't matter how long it takes to buy that first investment.  keep talking with people, reading books and listening to podcasts.  You will know when you are ready.  Important thing is to keep moving forward.

Hi Josh,

You gotta watch out for those red heads!  It sounds like you have a lot going on.  I agree you do need hustle, knowledge and money.  Probably in that order.  I have purchased many rental properties in the last 25 years and never used my own money.  I bought my first property as a senior in college so didn't have any money and very little knowledge.  I did have hustle.  but keep in mind, real estate investing can allow you a LOT of personal time.  I arranged my schedule so I worked couple hours in the morning during my daughters nap time, home with the family for lunch then worked a couple more hours in the afternoon.  Later once the kids were in school I worked 8 to 3.  For the most part, you can set your own hours.

I would offer a couple suggestions.  First, decide where in Cleveland you plan on living and buy a 2-4 unit.  Look for properties in good school districts that can return 20% cash on cash return.  This will provide cash flow and the opportunity to learn your new market and the rental business.  You or your wife will need to continue to work if you want to obtain a bank loan.  Once you have 2 - 3 years tax returns s a landlord then you can consider going in full time.  Remember cash is king and guard it with your life. Use OPM whenever possible.  What ever you do, don't use all your cash.  Maintain several month reserve for the 'Oh crap what was I thinking" months.

Second, I am primarily buy and hold investor.  I have flipped a few houses though.  If you are looking to maximize your time with family I would focus on rentals.  The rent checks keep coming to you every month as opposed to flipping where you have to keep hustling to find the next deal.

Lastly,  don't get to excited to buy the first property.  Make sure the numbers make sense and keep in mind this has been a very long bull run in real estate.  Make sure you can still pay bills if vacancy rates go up and/or you need to lower rents to fill empties.

Best of Luck

Congrats on taking action! It's nice to see interest in smaller towns. If you need any advice going forward fell free to contact me

Hi Patrick,

Congrats on finding a seller willing to finance all or part of this deal for you.  I have purchased all of my properties using seller or OPM.  This deal sounds very similar to a 7 unit property I purchased years ago.  In this situation the lady's late husband built the building and it was his legacy.  She was more concerned with someone purchasing it that would maintain it properly but wanted to sell it for as much as possible.  We agreed at a higher price but the interest paid to her was a lot lower (maybe 3%, which was very low 20 years ago).  I was mostly concerned with cash flow.  I would offer a fair deal to her and keep it simple.  Try to learn what motivates her and make this a win-win for both of you.

Good luck

Hi Tyler, That's a tough situation. After 25 years I have had many people break their lease. Basically, life happens. I would tell them I would do everything possible to re-rent the apartment. You have 3-4 months (depending on when in January they move) to find a new tenant which should not be a problem. Remind them if they leave the apartment in the same condition as when they moved in and it is re-rented that they will receive the security deposit back as well. I would recommend adding a line in your lease agreement for this in the future. This is how mine reads?

CANCELLATION OF LEASE: The tenant may cancel this lease by taking ALL the following actions:

1. Giving the landlord a written 30-day notice.

2. Paying all rents and utilities due to the end of the 30-day period

3. Paying a cancellation fee equal to one month’s rent.

4. Repaying any special rent incentives tenant received.

5. Paying an early cancellation fee of $250. This fee does NOT have to be paid if the tenant has stayed beyond the original lease term.