All Forum Posts by: Mark Costa

@Jason D. It looks like I did not tag you properly in my last post.. just wanted to be sure you know I replied!

@Jason D. @Thomas S. Hypothetically, what if you were to obtain the HELOC last year and continue to pay off your home until 'recession hits'... your home is paid off but you kept the HELOC open... I understand your line amount might change (depending on whether your property value dropped) and you'd only have access to 80% of it... that being said, wouldn't you still be able to use that 80% to invest pretty much the same way you'd otherwise have the cash?

Appreciate everyone's thoughts so far. I'm obviously still working out my own personal finance philosophy and figuring out what I'd like to do. In case you cannot tell, I hate personal debt and don't mind using leverage for business. To me, having no mortgage seems like a great way to protect your downside while allowing you to take more risk investing. 

Are the following goals in conflict with each other:

Goal A: Prioritize paying off your primary residence. 

Goal B: Save as much cash as possible so you are ready to BUY when recession hits.

At first these goals seemed mutually exclusive to me but then I wondered...

Can't you accomplish both by taking out a HELOC against your primary residence while directing all spare cash flow to your mortgage until it's paid off?

Rationale here hopefully is obvious... that you are reducing / eliminating your personal mortgage while at the same time being able to pull the trigger and invest should a worthwhile opportunity come up.

If this theory is sound, I don't see why you wouldn't keep a HELOC open even if your home is 100% paid off?

Thoughts appreciated. Let me know if I am missing something?

Who on this forum is well known and widely trusted amongst BP members for making profitable apartment deals happen?

Maybe they bring apartment building investment opportunities here to the group and allow members to invest, etc.

I’m interested in owning apartment building(s) for cash flow but not in working with investors. 

I’d like to own my own buildings and not have other stake holders who are owners.

Anyone take this approach? 

How much does this limit my ability to grow past one building? 

(Assuming all of your initial investable funds go into purchasing your first building and you don’t want to use private OPM to go past that.)

I’m curious to hear perspective from those who have invested in apartment buildings ($1M+) or are educated in this area:

- If you were starting all over again, assuming you had zero experience (never done a real estate deal) but all the necessary cash... i.e. you can get a $2M building either with leverage or pay cash... would you do an apt building as your first deal? 

- How much cash flow can you reasonably expect to pocket from let’s say a $1M to $2M building?

- Does it make sense to own and hold just one apartment building and stop there? (Or are you always looking to get into more and more deals like the one you just got?)

Thanks Thomas. What is an “income fund” exactly?  

That’s a good point, Brent. I was thinking of leverage as ‘all or nothing’ and 30% equity may provide peace of mind while still allowing your properties to grow faster.

Re: trusting my ability to find “proper deals” - my answer is NO! :) But I’m brand new at this and just educating myself for the first time... so far the main criteria to finding a ‘proper deal’ I’m aware of is to make sure you but your property at a discount. (20% - 30% discount seems right but I’m sure practicing this is much more difficult than it sounds.) 

@JD Martin I am talking about passively investing in index funds like the S&P 500... just "buy and hold the market" is what I do as well. 

It doesn't take any thinking or smarts aside from consistently buying. :)

Thanks @Nathan Gesner - I actually came across that article in my initial research. Here's one more article that seems to favor stocks over real estate.

Just want to make my intentions clear: I'm not trying to stir debate on whether index funds are 'better' than real estate investing. I think you can make a case for either depending on your experience and interest.

My question is more about whether anyone here prioritizes both and what that looks like.