All Forum Posts by: Azita S.

Hi Everyone,

I consider myself a newbie because the more I learn about REI, the more I realize that I need to learn more!

I currently own 2 grade B SFH rentals in the Phoniex AZ and my primary residence in Portland OR. All 3 have mortgages and equity due to significant appreciation over the last few years. I recently took out $100K HELOC on my primary residence for remodeling and also sold 4 grade D duplexes that I owned out right! The funds have been sitting in a CD while I do my research on my next step.

Option 1 - use the $$ from the sale to payoff the HELOC

Option 2 - use the $$ from the sale and leverage the equity in the other properties to buy more investment properties.

After being burnt and losing $$ on grade D duplexes in Milwaukee, WI and having great appreciation and return on grade B SFH in AZ, I have decided to stick with buy and hold grade B SFH in the $100-150K range.

I've been studying markets like Orlando, Cincinnati and Indy where you can still find turn key SFH for under $150K with rents ranging $1200-$1500. I can tolerate minor repairs like new flooring and a fresh coat of paint, but don't want the hassle of managing a rehab long distance which I have done once in the past successfully with the right team, but would rather stay away from!

My HELOC payment currently is $522 , so if I could buy $100K property with even 5% return, it would cover the HELOC payment. and if I cashed out the equity in other properties, the returns would cover the increase in the mortgage payment. Once I know the properties are stable and generating cash flow, refinance and purchase more.

I'm more interested in appreciation and depreciation write off than creating cash flow. I just need the return covering all the expenses. My ultimate goal is to do a 1031 exchange for a commercial building in Portland.

My biggest fear is having low return and not being able to make the payments on all the mortgages especially my primary residence!

I would love to hear what Pros would say about my plan.

All feedback, constructive criticism and advice is welcomed. I'm here to learn!

Hi Everyone,

I consider myself a newbie because the more I learn about REI, the more I realize that I need to learn more!

I currently own 2 grade B SFH rentals in the Phoniex AZ and my primary residence in Portland OR. All 3 have mortgages and equity due to significant appreciation over the last few years. I recently took out $100K HELOC on my primary residence for remodeling and also sold 4 grade D duplexes that I owned out right! The funds have been sitting in a CD while I do my research on my next step.

Option 1 - use the $$ from the sale to payoff the HELOC

Option 2 - use the $$ from the sale  and leverage the equity in the other properties to buy more investment properties.

After being burnt and losing $$ on grade D duplexes in Milwaukee, WI and having great appreciation and return on grade B SFH in AZ, I have decided to stick with buy and hold grade B SFH in the $100-150K range.

I've been studying markets like Orlando, Cincinnati and Indy where you can still find turn key SFH for under $150K with rents ranging $1200-$1500. I can tolerate minor repairs like new flooring and a fresh coat of paint, but don't want the hassle of managing a rehab long distance which I have done once in the past successfully with the right team, but would rather stay away from!

My HELOC payment currently is $522 , so if I could buy $100K property with even 5% return, it would cover the HELOC payment. and if I cashed out the equity in other properties, the returns would cover the increase in the mortgage payment. Once I know the properties are stable and generating cash flow, refinance and purchase more.

 I'm more interested in appreciation and depreciation write off than creating cash flow.  I just need the return covering all the expenses.  My ultimate goal is to do a 1031 exchange for a commercial building in Portland. 

My biggest fear is having low return and not being able to make the payments on all the mortgages especially my primary residence! 

I would love to hear what Pros would say about my plan.  

All feedback, constructive criticism and advice is welcomed.  I'm here to learn! 

@Harrison Colunga  What are your top 5 markets in 2020?  I'm in my research phase as to where to invest in 2020 for cash flow and appreciation. 

@Marcus Auerbach

So true!!! mot reputable PM's won't manage inner city properties.  One told me that their guys would be scared to even drive through these neighborhoods!!

I myself visited the properties once when I suspected they were being miss-managed and wouldn't feel safe going there by myself.  The inner city Milwaukee takes a special kind of investor!

@Courtney Richards

If you live in CA and investing in Milwaukee, I have list of people to avoid and list of a few trustworthy people I worked with.  Please feel free to PM me. 

@Joshua Tessier

This exact reason is why my $$ is in a CD and not invested yet. If I end up buying a vacation rental, it will be managed by a PM and not myself. The ROI must be good enough to be offset guest damage.

@Rion Redinger

Older folks from PNW like living in AZ in the winters.  My family in general likes to vacation in Mexico and the Caribbeans.  We also like going up to the mountains in OR for winter vacation.  

So vacation home in AZ at this point in life does not interest me, but maybe once I'm a snow bird, I'll live there in the winter. 

I live in Portland OR and since the market has always been hot here, I decided to invest out of state.

I started investing in RE in 2013 and when the market was down I bought 2 SF in Peoria AZ and they are being managed by an amazing PM.  I've have 0 vacancies, no major repairs and they cash flow OK.  I don't remember the last time I talked to the PM. On 5th of each month I receive my direct deposit and the statements are loaded to the owner portal!  So totally hands off. 

Then in 2015 I bought SF home in Milwaukee WI, flipped it (long distance, never met with any contractors) and made $50K.  

Then I purchased 10 rental units in the inner city Milwaukee WI (5 duplexes) which were a huge mistake.  They quickly became money pits, high vacancy rate, lots of evictions, tenants trashed the units each time, dishonest PM's one after another, so the units never cash flowed and I tried for 3 years to unload them, but I was getting offers from local investors for less than what I paid for, not including all the repairs and upgrades.  I was on the phone constantly with PM's, city inspectors, tenants calling me directly, .... just a huge headache.  

Having to deal with these units, I decided to put a break on purchasing more since I felt like a total failure for a while. 

This summer, after working with an agent for 2+ years, I finally sold the Milwaukee units. I took a loss, but also learned invaluable lessons in RE investment. 

I've parked the $$ in a CD and have taken a break.  I own a non-RE business full time, have a young kid and a busy family life, so my next investment needs to be a no headache investment (buy and hold).  I'm self-employed, so my goal is to purchase enough rentals over time to have a nice retirement income. My goal is $150K in cash flow in order to retire. 

I'm back on the Bigger Pockets to start my research into the next chapter in RE investment. I'm interested in learning about possibly purchasing a vacation rental that we'll use ourselves and Airbnb it other times. or maybe couple of SF in AZ to have the same PM manage and be hands off.  

I consider myself a newbie and here to learn from the pros. 

Thanks for the advice.

If we did decide to go into a partnership how would we decide to split the revenue once the coffee shop starts generating $$$?

I've been saving up to buy my second investment property. I bought my first one earlier this year. As I get ready to find my second propety, my sister has approached me about opening a coffee shop together.

She doesn't have any $$$ but is a hard worker. She wants me to be the investor and she'll take care of the rest.

It would probably cost about 30-40G to get the shop up and running. I'd like to help her out but just don't know how to form a partnership in this situation.

She is young and enthusiastic and I'm sure she'll work hard to run the shop, but she does not have any business background. She's found a place near the university she just graduated from. The place used to be a coffee shop for the last 15 years. It's a great location for a coffee shop and I'm sure with good managament it will succeed.

Anyways, I need some advise to how to form a partnership with a family member who won't be investing any money, but do all the hard work.