All Forum Posts by: Curtis Cecil

Pending one’s stage in life and career, I submit growing equity and increasing net worth should be the goal of most investors in their 30s and 40s and perhaps even in their 50s - as they enter and are in their prime income years. Presumably someone who has cash to buy investment real estate has a W2 income sufficient to cover their total monthly cost of living - their “job” pays for their lifestyle. So they don’t need cash flow to live off of. From folks in that position, I submit it’s better to invest for capital growth. Properties should pay for themselves with some cash flow left over to cover unexpected expenses. But the focus in my should opinion should be on long term capital growth.

Question: Who will be able to generate more cash flow when they want and need it?

Investor A with $1M of investible assets

Investor B with $3M if investible assets

The answer is obvious, it’s investor B.

I see countless investors talking about buying a cash flow property.

I see countless brokers and owners trying to sell property by indicating “it’s a cash flow property”.

If I may offer my perspective on:

Does the property cash flow?

It’s an incomplete question with no answer.
I believe an additional layer of detail and sophistication is required.

I submit:

Every property will cash flow if you buy with all cash. Right?

So the better question the more informative question is:

What size cash down payment do I need to make so that the property cash flows?

Does an investor need to put 20% down or 30% or 50% down to cash flow?

That’s the better question.

Any question or statement about cash flow only has meaning when connected to the amount of cash required to buy it.

And yes in todays market with todays debt costs, I suspect most SFRs will require 30% to 40% down to cash flow. In my opinion you won’t find cash flow with 20% down unless the property and location are horrible. Even MF assets require 30% to 35% down to provide some cash flow.

The “popular” opinion isn’t always the best opinion.

One should tailor their investment approach to their assets - education income capital knowledge experience etc etc - and their goals.

I’d submit investing for capital growth is by far the better option for many.

Aim to hit line drive base hits not grand slams.

Agree 100%. Cash flow is nice but it isn't "King". What's the use of cash flowing $1000 per month if if it cost you $100,000 out-of-pocket to secure the property. It'll take you over 8 years to recoup your OOP costs. Value add is the best way to go and using the banks money to finance the projects. If you have an opportunity to add an additional unit or two so the rents cover the financing (like from a HELOC) and then profit from the positive cash flow, that's truly how it should be defined.

Personally, it doesn't truly count as cash flow until you've recouped your initial investment. Additionally, the appreciation in the property you can cash-out refi or take a HELOC against which is not taxed whereas cash flow is taxed.

"What's the use of cash flowing $1000 per month if if it cost you $100,000 out-of-pocket to secure the property."

If it took $100k to buy $1000/month in CF I wouldn't buy it either. That doesn't mean cash flow isn't King. It's just an example of why you wouldn't buy the property.

So $12,000 a year CFI (that’s $1,000 a month) is a 12% annual cash on cash return for $100,000 investment.

I don’t think you mean that do you?

I think even “cash flow is king” investors would be pleased with a 12% annual cash on cash return.

Sorry, long time lurker but trying to get back into RE investing. I was lost on that comment about why someone wouldn't buy a $100k house if it was making $1k a month in rents...? Why not?

I'm about to buy a house from my father who had the house for about 13 years. He bought it for $27k from a sheriff auction and put about $24k in renovation dollars. He's selling it because he doesn't want it anymore and it's out of state for him. I offered to buy it since there were a lot of investors that were jumping on the deal so it must be good. From what I figured out, it's not the best neighborhood but it rents out for $1500/mo. Purchase price is $50k, rehab costs is around $15k.

My goal is replace my W2 income with real estate so why not BRRRR with the first house being this house. I understand interest rates are high but why do people think BRRRR is dead?

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Sounds good. Thanks Joe!

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Just throwing my 2 cents, my father and I have been looking into property managers in the Akron area and we contacted REM and they replied via email that they won't manage our property and didn't provide a reason. When attempting to call they won't answer our calls.

Curtis Tyree are you still providing property management? I would like to have a call to discuss if you are available.

Thanks!

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Thanks for the replies and ideas. The thing I'm worried about is the rate of being able to buy homes and still get them for a good price. I assume that I have about 2-3 years before prices get higher again.

I would like to have about a house in 6-8 months but that might be a little hard...lol.

So I have another question. What do you think about taking student loans out for the downpayment of a house? It's a long story but my girl and I are in a situation where she can get student loans but yet since I work at the University she get's the tuition discount I get....worth the interest rate on the student loan to get another rental property?

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So I purchased my first property for myself back in December and I'm no longer renting. I want to purchase another property around the Fall time and should have about $12k in cash.

To buy another place it would take 20% and if the house I'm targeting is 100k then I would need another 8k + repair before I can rent it out.

Any suggestions? As what I should do to get more cash?

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Thanks for the advice everyone. I have asked through email (since it's Sunday) my realtor if she's experienced in the deal making process with reo's and negotiations. We'll see how this goes...

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Thank you both on the advice. I will attempt to deal with them and see what comes out of it.

Hopefully they will come down so we can start.

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So after looking around at a few houses, my partners and I have found a property that we can to purchase and flip. The house is a foreclosure and it is owned by a bank. We viewed the house and found that it was stripped of everything in the house and needs a complete gut and rehab.

Mind you even the roof mounted air conditioning was ripped out so it need probably about 40-45k in work.

Now it's list at almost 60k and it is in no way worth that amount. Not even 10k but we are willing to put 15-20k cash to them to get it. My question is this, I found which bank holds the loan and found that Fannie Mae owns that company.

Should we just have our realtor put our offer in or is there a way to speak someone directly to tell them our offer and why we are offering such a lower price? What would be the best step to secure this home?

Thanks for any information.

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All Forum Posts by: Curtis Cecil

Curtis Cecil has started 6 posts and replied 18 times.

Post: Cash flow is NOT king!

Post: Looking for Property Manager in Akron, Ohio...

Post: Looking for Property Manager in Akron, Ohio...

Post: Bought my first property for myself, how do i continue to the next?

Post: Bought my first property for myself, how do i continue to the next?

Post: Next step...

Post: Next step...

Post: Next step...