All Forum Posts by: Nina Granberry

All my cash flow is put into maximum overfunded permanent life insurance.

That is the equivalent of a savings account that brings between 4.5 to 6% return, is asset protected against creditor, is transferred to your heirs tax free and also as an add on gives you a cushy life insurance coverage.

@Nina Granberry

Man your question takes me back to right after I got my first place! (That happend to be a duplex as well) I was so hungry for growth I wanted every penne working as hard as possible!

Almost 30 deals later I have realized that cash reserves do an epic job at what they do best... Provide insurance.

Looking back I now realize that spending metal capital to try and find a few more dollars to max out my return by getting 1 or 2% on my savings is just a distraction from getting a 1000% rate of return in real estate.

So with that said. Keep your hunger for growth alive but don't get distracted on the small things.

Most of all have fun along the way!

@Nina Granberry If you don’t have at least 8 hours per day to dedicate working/learning the stock market, avoid picking stocks and timing the market. Research an ETF called VOO and see how you like it. Low expenses, very diverse. Setup a weekly recurring buy. Set it and forget it kinda thing. Keep that weekly buy on cruise control whether the market is up or down. Avoid at all cost to pay attention to the noise and the news about stocks.

This is all the principle I’m following from that good ol’ fella, Mr. Warren Buffet.

Though I’m not expert, I’m more susceptible listening and learning from those who are successful.

 Nothing that is risk free. Online banks are paying less than 1%,  30 year treasury rates are 1.73%, and 7 year CD's are around 1.3%. 

This is just typical BP, even if unintentional, misinformation.

To the OP, what to do with your cash flow is buy more cashflowing assets, if you are able to find them at prices that make sense. 

@Nina Granberry we have betterment investment accounts to save up for capeX and repairs,. After saving for those, I also transfer a percentage of profit each month into our household checking account to spend on family stuff, kids, etc.

I also recently read the book profit first, that was very insightful with how to handle cash flow going forward. We have young kids right now and so we are choosing to supplement our income from W2 jobs with some of the money we earn from our rental business; we’re not rolling all money into new properties. Profit First was a really insightful book. 

I have a couple strategies, I have a heloc on my house that I am using to fund additional rentals and the rate is 3.75 right now.  I primarily just pay off extra principal in the heloc and once I get it low enough I rinse and repeat on another property and see these extra payments as having a rate of return of 3.75% because that is what I would be paying on the debt.  I also have some in a brokerage account where I am investing in stocks.  This is much riskier with the possibility of a higher return but for me it is worth it to try to grow the money faster to buy more houses.  If I get into an emergency I have plenty of cash in the bank but I also fund most maintenance from the heloc.  I would say the bank generally speaking is the worst place to park money, at the minimum look into a high interest savings account, there are plenty out there or consider brokerage.  Right now the moneymarkets are garbage but once the fed raises rates they are decent depending on the brokerage firm you are looking at.  

A higher rate always implies higher risk and/or a compromise with your liquidity. For example I invest in mReits, very high current rates earned (greater than 10% in many cases). Very liquid as well, but very volatile too. When Covid hit my principal balance on an mReit dropped 70% almost instantly, it's coming back day by day and I have no immediate need for cash so I can easily wait out the recovery. In fact I may actually benefit as I can add more at lower prices, but had I needed the cash liquidity at that very instant I would have gotten absolutely killed.

So no free lunch, if you stretch for yield you potentially pay one way or another for it, as long as you understand what can happen and are good with the risk return trade off - well enough.

That makes a lot of sense. And, since I am not experienced in investing in stocks on my own, I think putting the extra cash flow into my high yield savings accounts or the recreational investment accounts that I have (i.e. Acorns, Fundrise, TD Ameritrade) are my best bet.  

@Nina Granberry I personally keep 6 months of reserves in the account and sweep the rest into a high yield savings account. Rates aren’t great now but you can at least earn 2-3% and it’s still liquid. I know others that put it into an ETF fund and grow it that was but I’m a little conservative.

With cash flow use it to buy  more properties in real estate. Or put them into stocks, like etf funds. If you ever need funding for your deals I’ll be more than happy to provide. I do buy and holds.