All Forum Posts by: Phillip Rosin

@Gavin Welch thank you for the quick reply. What would you say is a reasonable target for duplexes or quads? How about single family homes? 

While evaluating duplexes and single family homes in the Tampa Bay, FL area (From Clearwater/St Pete out to Lakeland), I've received feedback from a local agent that finding a property yielding a 12% COC return in the greater Tampa Bay (Florida) area is unrealistic. I've watched many of the webinars where it is repeated that 12% COC return is generally the minimum you want, along with at least $100/door in cash flow (Though I'm targeting 200+). Being new to REI, I'm unsure if this is true, and what they say in the webinars is only limited to certain areas and/or limited to ideal markets... Or, is it reasonable to look for these deals and perhaps they're not wanting to put in the time with me to find these deals or they have just been unable to find them? I'm in no rush and my target is 2-3 properties this year, depending on price point. Should I consider lowering my expectations for COC returns, or should I continue to evaluate properties, as suggested in the webinars, until I find one that meets that criteria? I understand that every deal is unique and there can be other variables to consider, so this is just an 'in general' type question. Thanks!

Thank you everyone for the input! I'm happy to have found a forum with so much great knowledge and broadness of opinions. This has really helped me so far. I've paid off the car loan and am still deciding on the student loans. I'm leaning toward aggressively paying them down over time and using the cash to invest now (well, soon). I'm going to spend the next few weeks evaluating properties and learning as much as I can... and then decided what to do. 

@Shane H. But Bernie promised to eliminate my student debt lol...

You make some really great points as well. Please allow me to throw a few wrenches into the mix to see what you think. I went ahead and paid off the car loan, to which I was paying $300/month. This leaves me with around $52K in student loans with a roughly $250/month payment and $95K in cash. They are federal student loans, meaning if there ever was a dooms day scenario, I would be able to defer or greatly reduce my payments until I could once again secure steady income. Not ideal, but a 'safety net' none the less. 

If I pay off my student loans, I'm left with around $43K in the bank, which is certainly nothing to scoff at. I will also then have around $3,000 per month left over after my base expenses are paid. I suppose that isn't a bad spot to be in.

Alternatively, if I keep my loans, I will have a $250/month payment, $95K in the bank, and around $2,750 per month left over. 

That leaves the big question is whether the return I could get with that $52K would outweigh the cost, both in interest and security. At my current saving rate, it would probably take me 1.5-2 years to save that much back up. Even at 2 years, at a 15% COC vs 4.8% interest, I'm looking at a difference of around $5K/year (~10% of $52K) or $10K 'lost'. However, I could be putting that money into a high yield savings account as I'm saving up, to offset that a bit as well... AND there's no reason I couldn't take the cash I do have available still and use that to get my feet wet... So maybe all the debt free arguments are gaining some weight haha.

@Dylan H. Thank you for that idea. I may try to pick your brain a bit on that. 

@Bryan Hancock Thank you for your in depth reply. You have a lot of great info in there. I have saved your comment and will reference it as I work through my plans. I did have a question as to where in that list REI would fall for someone with low DTI and a well paying W-2 job who can afford to take some risks?

@Steve Vaughan that is a great point. On that note, my car loan is $9,500 and the payment is... was... 300/month. I was over paying a bit. However, I made the decision and just paid off that loan. I'm now down to my student loans. I just checked my actual numbers and I pay around $226/month on a $52,000 balance. That's around 5% COC return if I paid if off. Now I have to weigh if that is worth paying off. For now, I'll take the 300/month I was paying toward my car loan and put it toward my student loans.

@Ola Dantis Thank you for your input. I am in a lucky position that, after my core monthly expenses are deducted, I have roughly $2,500 dollars left over each month from my regular income take-home. On a side note, with my company match, I currently have 10.5% of my base income going to a 401K. One idea was to pay off my $9,500 car loan, to which I pay 300 a month, and put that monthly payment toward my student loans. That would more than double my current payment, and then I could start making even larger payments, as well as save for more REI deals, as time goes on.

Also, my student loan interest is tax deductible, as far as i know. 

@Tyler White and @Dan Maciejewski Thank you for your responses. I will be weighing the pros and cons of paying the debt over the next few weeks. It really is a tough call. I have enough cash (105K) on hand to potentially grab a few properties, but would lose most to the loans (65K) if I paid them off, and the loans are only costing me around 5% or less. Current DTI is around 20%, but I think I'm actually paying more than I need to as well. I could also easily pay off one of the two loans to take my DTI down to 15%, leaving 55K in student loans at 4.8% as my only debt. I'm really torn as it would take a while to build up that much cash again for REI.

@Mark S. Thank you for your input. Ideally yes, my goal is to maximize every dollar, so long as the gain is outweighs the cost enough to make it worth the effort. The car loan was on a used vehicle from a dealership and I stupidly hadn't shopped ahead for a loan. I figured I'd quickly pay it off or refinance. It's only been a few months. I paid half cash, half financed. Credit score is well over 800 at the moment. With regard to REI, I'm eager to get the ball rolling, but cautious about making a poor investment, of course. I watched the newbie webinar and will be analyzing several properties a day for a little while. I still need to speak with a loan officer to see what I qualify for. Any suggestions on specific entities to contact as I shop around? Thank you!