All Forum Posts by: Matt Stevi

@Heath Ryans yeah! I didn't specify but when I've been analyzing deals I add all those other categories of cap ex, property management (even if I'm going to do it), repairs, etc to the expenses for the property. Thank you for your response!

Hey all,

Wanted to get your opinion on this book real quick if you've read it. I just finished it yesterday and I'm a little conflicted.

Here's why: I understand that Robert Kiyosaki is this portrayed like some financial king and has a bajillion NY Times Best Sellers but I hit chapter 7 and he says (paraphrased) that he has to be upfront and honest, he doesn't actually do network marketing (which is the business he touts as the "Business of the 21st Century").

I read that and immediately his credibility in my head went way down. I'm a practice what you preach kind of guy so I was a little turned off by this. Like yeah, this guy is worth so much and clearly knows how to make money, but I just find it hard to trust someone who writes an entire book about a certain type of business that he thinks is the best one for wealth building, but he's never done it?? 

 Just wanted to get your opinions and see if any of you have had any similar thoughts or experiences.

Thanks!

Hey guys, brand new to real estate, been learning for about the past 2 months. But here's my question:

Okay so this is a hypothetical situation. I'm just going to use easy numbers and make tons of assumptions, I just want to know if my thought process is correct.

Say you found a duplex, get an FHA loan, and you rent out 1 unit for $1000 and live in the other. Mortgage (and other expenses), we'll say, is $1500. So you run the numbers and because you're still having to fork over $500 every month to cover the mortgage payment (and expenses), the calculator says it's a bad deal, your cash on cash return is negative.

Fast forward a year and you move out as early as you can based on FHA rules. You rent out the other unit for $1000 and now your income is $2000/month, expenses are still $1500 and it's cash flowing $500/month, cash on cash return is positive (let's assume it's a good return, 10% or more).

To me, this would be a good deal because you got to live in a place for cheap ($500/month, which is cheap in my head), then you move out after a year and the place cash flows great. What am I missing? I'm aware that the goal of house hacking really is to live for free, but if I could live for $6,000 a year in a nice place, I'd do it. Around me, $6,000 gets you about 4 months of rent.

I don't know why, but I feel like I'm missing something. I've learned recently to analyze multifamily deals as if you were living in one unit and renting out the rest AS WELL AS if you're renting them all out, but this scenario that I've laid out sounds pretty good.

Curious to know your thoughts. Thank you!

@Morgan M. thank you for the recommendation, I will definitely check it out!

@Nathan Gesner gotcha, makes sense. Thanks for the input. 

@Geordy Rostad thanks for the quick response. Yeah, I’ve been seeing the 8-12% too, but I really like what you had to say about using other people’s money. 

I’ve learned recently through the podcast that if you’re creative enough, you can do deals with none of your own money, eventually pay whoever back, and then have infinite cash on cash return (since you have none of your own money in the deal).

What numbers do you guys use to evaluate deals other than Cash on Cash Return? I'm very new to real estate investing and I've been learning as much as I can over the last month or so, and so I'm just curious to know what other numbers I can run to see if a deal is going to be good or not. 

My #1 goal is to one day grow a portfolio of single family homes + small multi-family homes that cash flow positively, and years from now produce enough monthly income to greatly supplement (and eventually replace) my income from my job (aka, retiring in my 30s).

Thanks!

Matt