All Forum Posts by: Matthew A Rodriguez

Invest:

to put (money) to use, by purchase or expenditure, in something offering potential profitable returns, as interest,income, or appreciation in value.

Believe me, I do recognize the desire to acquire things that I am passionate about. I don't fault you for that. It's a poor model to pair any capital gains or cash flow into things that will cost you money. Not a sustainable business model. The best, most well known, and richest investor in the world knew the meaning of this. Warren Buffet named his first jet "the Indefensible." In his mind at the time, he realized that owning a jet like the other CEOs was more of a waste of money than anything. It wasn't until he had an actual need for one that he changed the name to "the indispensable." He used it as a vehicle to aid him in making more money. Set your goals higher and implement that GT350 later on down the road.

So your goal is to invest in appreciating assets to parlay in depreciating liabilities? 

I just went through a revamping of the communication portion of my budget. I ended my contract with AT&T cell phone and internet and uverse. I signed on with charter at their promotional rate of $45. Signed up for Hulu and Netflix of a total of $16 a month and run that through Chromecast to my TV . Cell phones are now T-Moble at 50 bucks a pop with unlimited everything. I dropped my bills over 100/month. In essence I gained 100/month in cash flow. Playing great financial defense with my bills. Now I need to work on my financial offense in terms of income brought in. 

Aaron you are of a different breed when it comes to investing. If others don't know, then be sure to listen to the BP podcast show 37. You're very smart and very successful. What about the newbie that has no knowledge of marketing, negotiation, contracts or rehab costs that just got off the guru train that was promised the world through wholesaling. Still say take a chance on expensive money? I guess I take a slightly conservative approach. I also guess each individual needs to know their risk tolerance. 

Then you would have 2k in credit card debt. A lot of people get no deals on their first campaign and a lot of people get discouraged when they get no deals. They then quit almost before they get started. $2,000 at an average 18% making minimum payments will cost you $1,116.00 in interest. Nice CoC for your credit card company.

Get a firm grasp on verbiage and calculating the standard formulas before a temping to make an offer on a property if it is a commercial deal (5+). Residential (4 units and under) will go by the comparable market analysis of the area. A good agent should be able to provide you it that. You also need to have a grasp on estimating rehab costs to even know what to offer. J Scott has a book on that very topic. My copy is in the mail so i have yet o read it but J Scott is the real deal so I will automatically recommend it. 

You are able to purchase a 1-4 plex under a USDA Loan as it is still considered residential property. You must adhere to the rest of the USDA qualifications as well. 

Acquisition: $130,000.00

GOI:                       $1,650.00/month

Debt Service:            $720.00/month

Vacancy:        (8.3%) $136.95/month

Management: (10%) $165.00/month

Insurance:                 $  66.66/month

Taxes:                       $103.83/month

Maintenance:            $165.00/month

_________________________________

Operating Expenses:$637.44/month

NOI: $1,012.56/month

Cap Rate:                       9.3%

Expenses:                 38.6% of GOI

Cash Flow:                $292.56/month

Seems like a solid deal. Are you planning on a complete renovation once you acquire it? If not please account for Capital Expenses. (Roof, water heaters, HVAC... ect.) 

Podcast 91 with Ben Grise has excellent advise on putting systems in place with your lead generation and direct mail in general. Check it out man. 

And I hate that I can not get my @mention to work on my Galaxy Note 3!!!! Lame.