All Forum Posts by: Michael Evans

Try using a Private Money lender rather than a traditional lender when it comes to refinancing and pulling cash out.  You can negotiate the terms with a private money lender.

These are Bird Dogs.

You need to focus on getting your financial house in order first before you focus on real estate investing. There's good debt (mortgage and student loans) and bad debt (auto and consumer). Focus on paying off your bad debt first and foremost. You also need to make sure you have an emergency fund. Once you've accomplished those two things, now you can focus on investing. You're good debt is actually an investment. Your primary residence is an investment and your collage loans are an investment in yourself (and you income ability). If you have an employer who matches your retirement contribution, then you want to make sure you take advantage of that free money. Next you want to max out your pre-tax retirement contributions, then your tax-free contributions (ROTH). You can establish a Self-Directed IRA that will allow you to invest in real estate using your IRA (has to be setup right and managed properly via an IRA custodian).

This is a very brief, down and dirty overview of getting your financial house in order.  Do some research on personal finance.

Stay Blessed!

Do you have cash now?  It sounds like your goal is turn your cash into a stream of monthly cash flow.  The real question is what rate of return are you looking for on an annual basis?  If you don't have any cash, then your first goal is get some cash and grow that cash to an amount to where you can invest that cash into a cash flowing investment.  So here are the questions you need to answer:

1. How much monthly cash are you trying to generate?
2. What is your risk tolerance on a scale of 1-100?

Take your answer from #1 and multiply it by 12 to get the annual cash flow you want.  For example, if you're trying to generate $1,000/month, then the number would be $12,000.  Next take the number from #2 and divide it by 5.  So if your risk tolerance is 50, then you number is 10.  Turn this number into a percentage, so 10 = 10%.  Now take the annual cash flow ($12,000) and divide it by percentage from #2 (10%):  $12,000 / 10% = $120,000.  This is the total cash you need to accumulate.

The next step is developing a plan to accumulate that cash.  You can use Excel to calculate the amount you need to invest per year, the number of years, and the annual rate of return in order to accumulate that total cash.  For example, in order to accumulate $120,000 over a 10 year period with a rate of return of 10% per year, you would need to invest $6,845.  You can change two of the three variables above (Time, rate and annual amount) to determine the 3rd.  Feel free to use this .

Stay Blessed!

The calculation is correct.  The cash-on-cash return is usually applied based on a cash purchase.  What you just proved is how the power of leverage can boost your cash-on-cash return, and for me the cash-on-cash return is what matters.  I always use leverage in my real estate deals for the following reasons:

1. Increases our cash-on-cash returns (as demonstrated above).
2. Shifts risks to lender in the deal goes bad.
3. Allows better money management.  I mean money management from an investor's view point of limiting your investment in any single investment to less than 5% of your total investment. So if you have $100,000 to invest, you wouldn't put more than $5,000 into any single investment.  Hard to do with real estate unless you're using leverage.

Setup an S-Corp and have them be passive members.  That way the net income you pass to them will not be subject to self-employment tax.

Send me some information.

Save up your money and leverage it to do a flip with an experienced flipper.  You provide the cash for a down payment and closing costs and use financing to purchase the property.  You provide the cash for the rehab.  You split the profit with the flipper and then reinvest the profits plus more of the $2,000 per month available for investment.  Rinse and repeat.

Stay Blessed!

Great job!  Wanna sell it?

Stay Blessed!

I haven't spoken with Brad Lewis in a couple of years, but he is the owner.