All Forum Posts by: Patrick I.

Katrina,

I am not sure If I can convince you anyhow, but these are resources from Brandon Turner to help you:

http://www.biggerpockets.com/renewsblog/wp-content/uploads/2015/10/7-Years-to-7-Figure-Wealth.pdf

http://www.biggerpockets.com/ultimatebeginnersguide.pdf

 

Hello Breah,

I am fairly new to real estate as well (started around July 2017) but I will share with you what I have done so far that may be beneficial to you:

Before you acquire any property, spend some time reading a lot of articles and forum posts to get a grasp on the different ways you can make money in real estate. Learn these different ways, familiarize yourself with the different financing options, learn about the different structures of a home/apartment building (no need to be a pro for this - Just know what they are and the way they work). I cannot stress enough that reading a lot is going to give you the knowledge you need and more confidence when it is time to execute. Every day, I would google a specific area of real estate and learn more about it.

While you read a lot, attend as many open houses of properties for sale in your area  as possible. Just walk in and exchange with the realtors. You may come across one realtor you can connect with and that person can assist you in your acquisition(s). He/she can also take you to visit any property that is currently on the market. That is how I met my realtor with whom I am about to close on my first property.  Visiting the properties will also give you a sense of what to expect on properties coming in the market. Visiting a lot of properties also helped me get "desensitized" to the beauty of some of the properties I have seen so that I could focus mainly on the numbers and the property features.

Analyze some potential rental properties even though you do not intent to purchase them. This will help you understand how the different costs, mortgage and rent can affect the return on investment. You could use the BP calculator (5 times for free membership) or find some available online for free.

The most important thing that is going to get you ahead: commit to do 1 thing at least every day that is going to get you closer to your goal of acquiring and creating wealth through real estate: read, analyze, go to open house....

Hope that helps.

Good Luck

Shawn, i think every one before me said it all. I don't know what kind of properties you are looking to buy, but I will still say NO. July 2017 was the month I started looking in real estate investing. May 2018 I am gettin ready to close on my first property. My mentors were biggerpockets.com, google.com, my realtor and a lot of books. Good Luck.

Mark, Could you please clarify your question? The title of your post and the content seem to address different topics. Are you debating between: 1. buying a residential property for yourself or 2. invest that money in a rental property? Thanks

Jeremy, Each situation comes with advantages and inconvenients. Having a tenant ensures that you have some cash coming in upon acquisition (while you may not know if the screening was done properly). Not having a tenant forces you to go through the full cycle starting with advertising and ending with getting a tenant. It gives you some experience (I am not sure if this is your first acquisition or not). The length of the lease of that particular tenant may not matter to me if I can verify if there was someone there prior and for how long that previous tenant had occupied the unit. Hope that answer your question.

@Laura Thorne Thank you for your comment. So, do you recommend still adding the variable costs to the analysis or dropping them entirely? What variable costs and allocation would you have used? Thank you

Hi MN BP Community!

I was wondering if you could share with me your experience regarding analyzing rental property and what your ideal cash flow looks like!

Brandon Turner (BP Co Host), when analyzing rental properties, likes to allocate some portion of the rental income to what he calls "Variable Costs". Mostly he allocates: 5% to Vacancy, 5% to repairs, 10% for CapEx and 10% for property management. I understand that these numbers are subjective to the market itself (and the investor) because when I used the methodology with the % given above, the cash flow is always about $100 or less with a cash on cash ROI less than 7%. So I was wondering:

1. What are some of the "variable costs" that you include in the analysis (with the respective % allocation)? 

2. What is your average cash flow per unit on your properties in MN?

3. What is you ideal cash flow?

Thank you all

@Etienne Martel Thank you for your input. Since my next purchase will be the first, I am searching locally. When I have the experience, I will look out of state. Thank you

@Andrew Johnson Makes sense Andrew. Thank you for your input.

Hi BP community. I always wondered how investors are able to build their portfolio so fast (like 5 - 10 properties in 2 years, etc.)? I am looking to acquire my first property soon but wanted some ideas on how to proceed if the goal is to build the portfolio with buy and hold for the long term. How are/should the financing be tailored to allow for use of less cash to maximize the acquisition? I have almost 30K to invest.