All Forum Posts by: Matt Doerr

Not to muddy the waters, but the answer on what to do with the $600,000 is subjective to each experience, geography, etc etc. 

To keep things simple, what do you want to do with your life (i.e. travel, not work again, etc)? How much money do you need to make to live? My advise would be set a timeframe for yourself to gain knowledge (i.e. 2-6 months) and then re-evaluate what you want to do; if you don't know about something but want to/ see value in it, then invest the time. Surround yourself with a great team whatever route you go and make time for the relationships(mentor(s), accountant, lawyer, contractors, etc). There are many variables here (sounds like you may be working, not sure on family, etc) but I think many know where I'm going.  There are great answers here, such as going for cash flow (putting money in the bank after all operating expenses, debt service, and reserves) or equity (having lesser debt on a property compared to what it's worth), or return on value (money into a property / appreciation and future sale) but different investors strive for different goals and those are all relative to whose goals they are.  

Lastly, to those that say $600,000 cash isn't enough and you're too late- tell that to the thousands and likely millions of people that would like to be in your shoes. That's more money than many people will ever see in their lifetimes! It's not fair for any one person on here to judge if that's enough or not enough for you personally.

So maybe this wasn't so simple, ha! But you seem to be on the right track already - asking questions as we all don't know what we don't know! 

Hi @Marco Bario- we're exploring options for a private 3rd party to act as the bank! 

I'm looking for suggestions on private financing and want to hear how you've structured it!? Specifically for single and multi-family properties.

I often hear that speakers on the bigger pockets podcast bring on "investors" but rarely do they talk about the structure. 

How do you find that it works and still makes sense on paper and equity wise? Also, if an investor is bringing money down, how do you structure the deal to either buy them out as soon as possible or the repayment isn't eating all the cash flow? Thanks in advance! 

@Guillermo Oyola I think people may be overthinking it and associating a bonus with an incentive to rush or go under-budget. If that were the case, it'd likely be that a contractor would earn a reputation for sloppy work or sub-part materials used but I think a reputable contractor is going to risk their livelihood for a potential bonus that he or she isn't entitled to nor is expected. 

Bottom line, if it's on your heart, treating people with respect, appreciation, and referrals goes a long way for valued relationships! 

@Dustin Dummer I think you're on the right path and may have answered your own question. Not to lead you to an answer, but slight diversification while achieving similar results could serve you best in the long term! One of the biggest things for my family at this point in our lives is being "cash poor" and I hate the feeling at times! 

@Dustin Dummer I tend to try and oversimplify but I find myself in the same situation as you - analysis paralysis. However, it comes down to your personal preference. A few things to consider: would you prefer to have more or less cash on hand for vacancies, remodels, other investment opportunities? There is something to be said about having tenants in place and considerations needs to be had for "placing" new tenants and the time/ cost. What's your target renter market? What's your long term goals? Could one of the properties provide enough cash flow for the next deal you're eyeing? There is no perfect deal but as Bearded Brandon states, it's more important to get started than hit a home run right away. By the numbers, both deals seem reasonable given your analysis. Good luck and well done on the analysis! 

@Halle Bolin I don't think a blanket statement works here. I just quoted out rates from different banks today and one mentioned that FHA options could include 2.25% interest and 30 years- this is considering purchase a 4-plex and living in one of the units. It'd be in your best interest to reach out to a few banks (I'd suggest atleast 3) and you'd be able to get a good picture of lending rates, terms, and downpayment options in your area. Cheers!

We often hear of finding an investor who doesn't have time but is interested in real estate. What is your experience and the best way to structure these investor relationships? I.e. profit split, percentage return, others? 

A few questions for you seasoned investors:

1) Would it be wise to use a management company starting out if estimated cash flow covers it? Or do management companies generally not "take" on 1-5 properties? 

2) What are your thoughts on utilizing 10% down if the bank will allow it instead of 20% down - opportunities vs risks besides the obvious less cash out of pocket?

3) What's the best practice for the tenant application process and staying within the lines of HUD/ landlord- tenant laws?