All Forum Posts by: Michael Lam

@Shanel Wiggins

In terms of newbie was the biggest mistake was not making a decisive decision to flip or rent.  Making that decision early on would have changed approach to renovations and how long I held the property and the just the entire mindset of an investor was not there on my first investment.

At the end I was very fortunate to have flipped it to make +$40K on it.  

Hi @Stan Kom

Welcome to the journey of your life!  I love to answer my question by numbering my statements.

1.  My first property was tough.  Scoured entire San Jose, CA at the time that was extremely competitive with CASH buyers back in 2008 when real estate bottomed on.  Even with this, my income was limited and what I could afford was in the price range of every CASH buyer.  I had to beat the to the punch and be the first to submit offer and forced the hand of the seller by indicating offer was only valid for less than 3 days (I don't recall if it was 24 or 48 hours to respond).  They had to respond and act fast

2.  I use redfin .com.  They are a great resource and their tools are much friendlier to use than the ones you listed in your original post.  

3.  Think outside of just mult-family.  Its your first home, so don't get to tied up on pure cash flow.  There are other metrics to consider.  Make sure your first home is a "home-run" as I can't tell you how important that is to build on.  

4.  Please please be patience.  I've seen too many cases of buyers purchasing a home because of emotions or psychological influences.

5.  Very important you have a two-purchase plan.  This is the plan where you purchase the 1st property and you have a plan in place to maneuver to purchase and prepare for 2nd purchase.  Don't just buy the 1st and THEN plan for 2nd.   You just gave me a great idea to write a blog about this two-purchase plan.  You can follow me if you'd like to know when I post my blog.

Hi @Ted Phelps  and anyone reading this post

You do not need to waste any money regardless how cheap it is to learn about real estate investing.  There are tons of BLOGS that focus on this and tons of free online resource including this BP site.  You could learn so much with the free items before even needing to purchase a book.  I write blogs that goes over all and everything about real estate and its completely free.  I hope folks at BP agree with me in that our knowledge is free and should be shared for the greater good.

However what I would suggest to anyone starting out is to get a good handle on tax and real estate.  Those type of information is great having a hard copy to reference back and forth.  

Hi @CJ Letzelter

Excellent question, and a question I've been asked before.  I'm not a CPA, however it is my understanding you can't use any payment towards principal to be "deductible" .  Essentially that is what your hoping and asking for?

If you don't want to show a profit from your rent, then you can use that income to do repairs or renovations on the home.  That will allow your income to be NET $0, which will not yield added income.  Interest on a home is deductible,  principal on a home is not.  Expenses on a home is (HOI, repair/renovations, maintenance cost..etc)

The reason why paying down your principal is not deductible is the fact that principal is what you borrowed so your only paying it back.  Where interest on principal is an "expense" of borrowing that money.

Hi @Solomon Oh 

Make sure your active and check in.  I'm also a technical co-founder at GoHire in the HR Tech space.  One thing that keeps things moving along is to make your goals public and its even better to tell someone who you interact with often, that way they will naturally "follow" up with you and it creates this accountability and keeps moving the ship.

If your serious, you need to create quarterly goals and revisit them monthly or weekly.  In software development we break large task into small task and make ourselves accountable.  We call this an "agile methodology" which compose of weekly "sprints".  Essentially its planning out the goals for the week that will be completed and executed.

hi @Sam Kim

Welcome!  Are you going at this full time or part time and is restricted by travel?  You mentioned out of state homes, but does that mean your willing to move there to see project through or are you looking to partner with someone out of state?

Opportunities are vast and varied,  I always suggest anyone new is to focus on what they already know and grow that knowledge base.  Which means stay local and network.

Hi @Cassie Sherie

Welcome to BP and yes, together we can all enjoy the amazing wealth generator our country has to offer.  This is a great place to learn and collaborate!

Is the smell from limestone or dirt?

Hi @Chad Jarrah

I had an issue with dog urine in cement patio.  The stained was stuck inside cement and cleaning it would not remove that smell.  So what I did to seal the smell, was to roll 2 coats of concrete sealer.  It did the trick.  In your situation a roller may not work so instead try spraying it over the limestone.

Hi @Solomon Oh

I love that your honest and you are dreaming big and aggressive.  I'm a strong believer to get that 5x you must shoot for the 10x.

So you have clearly established a general goal of 125 units in 20 years time.  Now your asking help forming a strategy?  Obviously there isn't a silver bullet to this but you can start with good habits and prepare yourself for when opportunity arises your ready to capture it.

1.  You'll need a plan to increase your income.  So currently use your current income and current 9-5 job corp latter and see how your going to climb that to unlease more income.

2.  Even with you staying static with your income,  the first property you buy is crucial.  It must in my opinion meet the 4 pillars of real estate investing (leveraging OPM, Cash Flow, Appreciates, Tax benifits)  All 4 needs to work in your favor on your first home to monopoly over to next one

3.  I do agree that getting 6 units your first year investing is aggressive.  Only in that with each home you should expect to learn mistakes and improve.  If your not taking retro analysis, you may be overlooking systemic issues with your overall investing strategy.

4. Patience needs to be in forefront. Don't let this # of 125 unit cloud you judgment. I would even adjust the goal to be, in 20 years, I want to have a cash flow of X amount. That way its not tied to a number of homes and will let you focus on ensuring your maxing out your ROI for each deal you look at.

5.  Good job writing down your goal,  that gets you one step closer to achieving it. 

There are more to this, but I suggest you prepare yourself some more.  Curious to see what other BP folks suggest.

When your ready I would love to see a consolidated list that makes up this strategy, it'll be interesting to see what the wider community adds to this.