All Forum Posts by: Philip Hy

RJ, you have a point that I should know it better, but I'm not oblivious to the financials. I will look into rentec. Good suggestion.

@Ben Leybovich you're on my to-read list ;) So much great material, but only so many hours in a day.

@Anthony Gayden That was almost my same situation at my very first property. Thankfully appreciation was high.

Wow, BP community really came through for me. Too many great comments to call them out individually. @Linda S. your last comment cracked me up; it recalled all those times I fantasized about an Office Space moment.

Sometimes I can't find people that care about real estate, who get a glazed look when I want to talk about it. Hearing all the different points of view really helped me get a handle of what situation I'm in (as always...you don't know what you don't know). Glad that I have a firm understanding of the "reality". 

I'm wondering if we're really making money. Not a rhetorical question, but would like genuine feedback. Here's the scenario. I want to live off of cash flow so I buy a lot of SFR. I then currently make about 550 cash flow per property, but after you figure maintenance/repairs, it's probably 300 per month per unit: $3,600/yr

The longer we hold a property, the more things break. Most expensive is probably the roof, which I estimate is $10k. So when the roof needs to be replaced, that wipes out approximately 2.5 years of cash flow. Then there are water heaters and AC units, etc.

As a result, living off of cash flow seems like a distant dream. While my rents will increase over time, property taxes are rising really fast in TX, so it's a wash.

Seems that I'll make money from appreciation and if cash flow once property is paid off. Depreciation is a benefit, but you have to pay it all back when you sell the property (unless I 1031). So basically is everyone's plan to pay off their houses and then live off of cash flow? Or is everyone buying houses as such a steep discount that they can live off of cash flow immediately? Or own such a huge portfolio that the little streams of cash flow become a torrent?

I feel like I'm missing something and would like to find out before I get disenchanted with SFR.

@Doug Johnson I imagine their up front cost is higher because of all the capital items they put in. Their vacancy seems realistic, but the costs are TBD. I'm in Plano, what kind of multifamily deals are you seeing in DFW MFR that beat Spartan's numbers? Cap rates for mutli are very low in DFW, I could never get the numbers to work.

Thanks for the feedback, though typically I can close on a conventional loan in three weeks. Just a matter of finding investor friendly lenders as opposed to retail lenders like BoA or Chase, etc.

Just an update, I'm supposed to be connecting with their transaction manager soon to work towards closing. Closing takes about two months, which seems long, but perhaps that accounts for the fact that the house is still under renovation. Will update on my experience as it happens, I'll be the guinea pig since it doesn't seem like anyone else on BP has reported their experience yet.

@Chris Thomas I'm currently in discussions to purchase, but it's been a good 4 days since I last emailed them (an eternity when you're trying to get deals done). I met Clayton and his team in Birmingham and was impressed with their operations. But when I came back home and wanted to start the purchase process, the level of communication has not impressed me. PM if you have more questions.

Listen to the podcast and read each of the books that gets mentioned. Many of the books same similar things, but it's helpful to hear it said from different angles, and it ingrains a deeper understanding of why to do this or why to avoid that.

Is there any way for you to "apprentice" under a really successful investment agent? That's how I got exposed. May be worth it just to work for free for period of time to get the knowledge.

@Barry JeromeI think anyone would be interested, but seems like it'd require "big league" cash investment. Any sense of what amounts you're looking for? Feel free to PM me if you prefer. Thanks for sharing.