All Forum Posts by: Daniel Adema

Hello Everyone: I have a wholesale deal in the University Park area. 7 bed, 3 bath, 2800ish sq ft. brick ranch with finished basement. Price is $445k, $100k in repairs at most, ARV $650-700k. Mostly needs updating. If you or anyone you know is interested, send an email to [email protected] for an immediate autoresponse with details and pics.

@Daniel Panko thank you for the response. I like your positive attitude. It will go much further than a negative one. I like listening to naysayers, though, because they can point out problems with a plan. It just helps refine things before moving forward. If you can get your strategy so dialed in that even a pessimist can't find anything wrong with it, then you've definitely got a solid plan! 

@Steve Vaughan got all the basics covered. But you can only eliminate so many expenses. I brown bag everything (severe food allergies prevent eating out most of the time), drive 2 cars that are 11 years old and have no car payments and have minimal credit card debt. I've come to realize the Denver market is out of my range because prices and demand are so high. So I'm looking at other opportunities in other states where home prices are more reasonable and cash flow is greater.

@Thomas S.

Thank you for your post. It's harsh but honest. I respect that.

The one issue I have is that I can see only 2 options.

OPTION A: I spend the next 20 years trying to work more and pay off the student loan debts. I can continue to work 60-80+ hours a week with second and third jobs, miss my family, skip creating memories with them and in 10-20 years be debt free. The problem is I will also be asset free. And starting at square 1 when I am 60 years old. Since I am self employed, there is no nest egg or retirement waiting for me.

OPTION B. I can choose to work smart. If I buy 3-4 houses that can cash flow $200 per month, the renters are paying for my student loans. Double that and my wife's student loans are paid for as well. All by me simply leveraging time and OPM.

As for drive, that's an awfully big assumption. I'd say success comes not just from drive but from opportunity. And just because some people have large debt loads don't assume it's because they live lavish lifestyles. Over 60% of bankruptcies in America are simply due to medical bills, not because the people had to large of house payments or drove the newest cars.

Because while having a way but no will is pure laziness, having a will but no way ... that's just plain frustrating.

I do fortunately have equity in my home. But your advice is different form everyone else's here, so I'd explore that train of thought. If I sold my house, I could apply the proceeds to the outstanding debts. But then I would have to rent a place to live, and in the market I am in, renting a an apartment is only a few hundred dollars less than owning my own home. Plus now I'd lose all future appreciation in my house, not to mention the interest deduction for the taxes. How would that ultimately benefit me more than staying put?

@David Dachtera

Thank you for your post and your tremendous wisdom! Increasing my income is my goal. I realized a long time ago that I only have a finite amount of hours in the week. So the old "get a second job to pay down debt" doesn't work. It's not time efficient and in the end it's not that smart. My goal is to increase multiple streams of income. And as any farmer will tell you in order to have a harvest you have to first plant something. SO I am not opposed to spending money.

I just want to make sure that the money I invest is invested in the most fertile ground and at the most opportune time so it has the best chance of giving me a return down the line. Tried it with stocks but the ups and downs of the market didn't fit my personality.

I love the philosophy in the third point. So true. While I have never been a W2 earner for an extended period of time, I have been a successful self-employed person (but that just means I own my job). I'm really trying to make the shift from the S quadrant to the B quadrant (rich dad, poor dad) and find it extremely difficult.

Anyway, thank you so much for the response. One day I hope to have as much wisdom and experience as you @Joe Villeneuve.

Hi @Scott Trench

Thank you for your insight. I have often thought about that approach too. Building up liquidity is my ultimate goal. The problem is the debt load quickly drains any liquidity we can manage to build. And while compound interest is the greatest slave, it is the harshest master.

It's taken 4 years to get to where we are, so what we are doing is not working. The real goal for me is to duplicate myself and bring in multiple streams of income. I'm only one person and have a finite amount of time to work each week. But if I can start another business, buy a property, or hire someone else to work for me, I have doubled my efficiency and cut my debt load burden in half.

I'm glad to hear that what you are doing is working for you, but in my situation I'm about 2 steps behind you in the race. Not a bad thing just a different thing. And I need to catch up quickly. I can't wait until I have a few properties "recruited" to help me bring in more cash flow. ANd have them paid of quickly so I can maximize that cash flow.

HI @Adam Adams:

Thanks for your response! I'll respond to both of your posts in this one. Thank you for giving me an overview of the wholesaling process. Do you find the market in Denver is saturated with people trying to do wholesale deals, or do you more find the 80/20 rule applies: 80% of the deals come from 20% of the people trying to locate them?

I will try to make the meeting tomorrow night, but will be out of town until 6PMish. I'd love to introduce myself in person and listen to what you have to say.

And while I agree that @Bill S. that wholesaling is not real estate investing, it is an investment in my real estate education and is a good way to quickly generate more seed money to invest in actual real estate deals.

Since wholesaling seems to be an interest and passion for you, where would you recommend someone start in order to get educated? I listen to a lot of books on tape through Audible, are there any you could recommend?

@Bill S. Thanks for the advice. That's my thinking too. I don't want to invest in a condo especially in Denver. The hoa's alone can kill your margins not to mention everything else.

HI @Joe Villeneuve:

Good points! I should clarify though by my statement "My wife and I are looking at making our first real estate investment outside of our primary residence". Perhaps I should have said "other than." I know our home is not an asset, it's definitely a liability because it takes money out of my pocket each month. Now if I were to rent it and make money, then it would be an asset ... though not my primary residence anymore.

I do agree that lack of funds is the greatest obstacle for new REIs. But I love what you said about "Once the REI retrains their vision of how money works as a REI, sources of money become no object." That gives me such hope! I just have to reprogram my brain. THank you again for your input!

Hi @Micki M.!

Thank you for your response. And thank you for all the questions to consider. You know how crazy our Denver market is, so I'm thinking my money will go further in a different market, possibly even out of state. I'd love to chat and hear about the meetup groups you are involved with and like. I attend the IRROC meetings, but am looking to network at a few others too.

@Gordon Cuffe

Thank you for your input! I think a consensus is starting to build that wholesaling or fix-n-flip is the way I should start off. I know 40 to 65 will by a short timeline and that's why I'm trying to speed things up, but I'm financially conservative only because I don't want to get to 65 and have nothing because I made a stupid decision. What resources could you recommend if I wanted to start getting educated about wholesaling properties?