All Forum Posts by: Mike Lauer

@Bomani Howze that’s solid advice and experience.

Similar here. I'm 2 years into REI and have a very demanding (50+ hours/week) W2 job. I use early mornings, lunch breaks, and weekends to analyze deals, manage rehabs, and view properties.

It’s not a question of whether one can hold a w2 job and do real estate. It’s a question of how. If you want it you’ll make it work.

@Cameron Riley I think this is a hard question to answer. You need to decide your own standards and stick with them. Personally, touching up the paint, at a minimum, is an expense I’ll incur at turnover so that prospective tenants see very clearly that I care about the property. I think that attracts better tenants. But others have a different calculation and there’s nothing wrong with that—you can make money both ways. If you’re cool with the paint, find a tenant that’s cool with the paint. There are plenty of people who will pay rent on time even if there’s old paint. The tenant that’s not cool with the paint will go find a place to rent that has fresh paint. But if you’ve already set your standard, don’t flail around, because that’s bad business.

This is a really great thread, because there are so many perspectives and if you just pull the *facts* from those perspectives, you can learn a ton and apply that knowledge to your situation. Your goals, your vision for your life, your risk tolerance, how active you want to be with your investments, and so on, and so on. Look at YOU first, then look at the numbers. 

For me, I was really down on my career, burnt out, and I started to read about real estate and it just clicked. I wanted financial freedom. I wanted to invest for the cash flow, but also for the fun of buying the assets, managing the improvement and value-add of those assets, and the rush of finding the next deal. For that, I needed cash. I borrowed the max from my 401k and used it for the down payment on my first rental property. It was a good BRRRR deal. After fixing it up, renting it out, and refinancing, I have less than $10k invested and earning a cash-on-cash return of 22% after expenses. The cash that I pulled out on the refi led to 3 more properties. I'm still paying 7% on my 401k loan, but making far higher rate of return on my real estate and I'm enjoying the hell out of it. I also stopped contributing (I got no match) so I could put the extra money into my real estate funds.

So I was willing to take a moderate risk with the 401k loan because I wanted to jump in to real estate and do the work and find the deals and learn how to rehab. I wanted to fully-immerse myself because I believe in it and I'm passionate about it. 

Would I recommend everyone do what I did? Absolutely not. It would be terrible advice for someone who really doesn't want to spend time actively managing their assets. Like, if I didn't want to fully commit to being an active real-estate investor AND property manager, taking $ out of my 401k and abandoning it might have been a terrible decision.  

Figure out what you really want, read up on how to get it, and the rest will follow.

For me it's all about cash-on-cash ROI. If a property is cash-flowing $100/month but I have $0 invested, I'll take that. I like to see at least 15% cash-on-cash ROI.

@Marcus Auerbach is the man. 

I work with @Marcus Auerbach and can vouch for him. He's my agent. He's a seasoned investor with a nice portfolio, an experienced rehabber who GCs all his own rehabs, and he's great at digging in on analytics. You can't go wrong with him. Hit me up if you want more. 

I work with @Marcus Auerbach. He's a seasoned investor, rehabber, and full-time agent. Hit him up.

I'll tell you my experience since it's recent and I had $35k to spend. I searched the local BP group and found and excellent real estate agent who is also a seasoned investor and rehabber. We saw dozens of houses last summer, and I learned a ton. By the time a good deal popped up (in August), I knew it was a deal and jumped on it. I financed -- about $20k cash to close -- and did a simple but nice cosmetic rehab for about $15k. I refinanced 6 months later, pulled out $25k, and bought another 2 properties with a partner. I educated myself by reading lots of books, listening to the BP podcasts, looking at houses with @Marcus Auerbach, reading the forums here, and going to local REI meet ups. Put in the time to educate yourself, put in the time to network with others in the industry, build relationships, be patient, and you'll have success. Let the numbers guide you. Good luck!

My agent is @Marcus Auerbach -- he's a seasoned investor and rehabber and understands the market very well. Highly recommend. Good luck.

I am fairly new to this, but the minimums I’ve set for myself are $200 per door after expenses and minimum 14% cash-on-cash ROI. I’m doing SFRs though and could imagine relaxing the cash flow number if I got into multi-family. Good luck to you!