All Forum Posts by: Michael Ran

@Chris Frydenlund @Adam Chudy

SF is still out there but getting harder to find. MF has some things going on. There are several thousand class A' apartment units being built right now. So if you are looking for class A' be careful!  But everything else is doing well. A friend just refinanced a small class C' for all his money back out. So he owns it with no money invested after a year and a half.

@Jakub Bednarz type @ like you did and type the name but click the persons name that pops up.

@Chris Mcdaniel And @Nick S. and Jacob, you should also look into "The Wealth Club" they have meetings that can really help you network and learn.

@Joshua Olson May have a better idea then I for medium sized apartments. Joshua, who are you using right now? I forgot their name.

with the update I can't find my PMs did you remove this function? Also the search bar always helped why is it gone?

as someone who has owned a flood plain property, there is not enough profit so pass on it!

You should have no taxes. Depreciation should still be in your favor. Add return of capital investment(all cash you put into purchase) and the capital improvements(rehab & major maintenance improvements,New ACs,etc) and it should be a big chunk of cash.(double check that with a real estate accountant.)

When you buy a new property, the depreciation needs to try and cover the income of both properties.(aka accelerated depreciation. The mobile home properties can also depreciate) I know one investor that buys properties for depreciation! When he reaches the point that you can't buy enough depreciation to cover the income that is when you do the 1032(thought it was a 1031). That idea scares me but it is an interesting model! Then he sells everything(or atleast the fully depreciated ones) and buys more or build new.

On a different note, I have been self employed since 2009. It has been great working from home! However, don't discount your employment benefits!(401k, insurance, vacation days, stable cash flow, possible stock matching, etc) If you have a family and kids, don't be in too much of a hurry to quit your job! I have seen a lot of people quit their job and forget about all the benefits their jobs gave them. This should be a hobby till the REI is suffering from your time spent on the job AND the RE income more then covers all the extras you need to equal your current situation(plus enough profit to keep growing). I feel like I have to add in the warning to every investor. A lot of people went belly up in 2007!

I would only refi if it lowers you monthly payments or pull equity out (which is what I do)and buy another.

Selling is not how I look at REI so I'm the wrong person for that call. I only sell when maintenance is too high or it needs full rehab(personal business model). However, if you do sell what's the plan? Do you already have properties you want to buy? You may end up not finding a better deal than what you have now!

I am currently banking my money. I see a lot of people over paying for properties and I'm waiting till they have to sell. Muni's are selling right now but no one has noticed. Sales have fallen 6.8% but everyday there are more people talking about REI.

I'm a buy and hold, type of guy. Once you own it, why trade it in for over priced properties? When refi will let you keep it and you get only a little less than if you would sell. Then you build up your equity again and refi both! Buy 2 more the second time. Rinse repeat buy 4 more or pay one or 2 off. I try to keep a percentage paid off(the highest cashflows) so I always have a fall back and can keep paying notes if market goes down.

I know there are many who will disagree with my model but that's what I do and how I think. Would love to see other people's ideas on you problem! 

Good Luck either way!

My personal thoughts... 

The market is really high right now(not a time to buy unless you find a gem).

Remember REI is a slow game! REI is a game that grows exponentially overtime. Cash flow is king in REI. The longer the loan term and lower the payment. The lower the expenses are the better the cashflow.

Will refi 15yr and 4.25%, lower your current payments? Have you thought about pulling out equity? If so, is it enough to buy a second 4 plex? 

What is your goal? 

Slow and safe - pay it off or sell; 

200-250k equity and 2500 a month cash flow(when paid off) sounds like a great start. With 2500 a month, that's a new rental house a year. Would be better in current market unless you already have a plan for the cash.

Fast and riskier- refi (take equity out);  buy another 4 plex in the area.

People follow one of those 2 plans in buy and hold. The people who got hurt in the crash of 08' were the fast growth people. However they over leveraged themselves.

Frank Thomas 281-704-4302

He gets a lot of off MLS deals. Tell him Michael Raney told you to call.

I would love an email. I am thinking about moving in this direction.