Skip to content
×
PRO
Pro Members Get Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
$0
TODAY
$69.00/month when billed monthly.
$32.50/month when billed annually.
7 day free trial. Cancel anytime
Already a Pro Member? Sign in here
Pick markets, find deals, analyze and manage properties. Try BiggerPockets PRO.
x
All Forum Categories
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

All Forum Posts by: Robert Brown

Robert Brown has started 3 posts and replied 4 times.

it's something I've been looking for for a while,  and it doesn't seem to be talked about much (at least where i'm looking)
- the recent BP: Money ep #377 with " Mr. Money Mustache"  prompted me to write

For my specific scenario:
I'm "House Rich" ( or house  poor.. i guess) and the plan is to continue buying more RE as investment rentals vs investing otherwise, for now.
I Have 7* doors, and am actively looking for another duplex/tri.
(* i live in one unit, free. and profit from the remaining 6.)
currently my net rent is  more than I budget to live off of,  but not with  any sort of excess , yet,  to  allow me to retire.  Perhaps at 10 doors I can slow down a bit work-wise

The 4% rule of course would allow a i.e. $40K yearly draw of $1M in investments, but there is a lot of stability build in with an index fund vs rentals/

I'm looking for "rules of thumb"/resources/thoughts.. on how many  doors  I may need to retire.. and yes i know that  there isn't a one-size-fits-all answer, but  other's guidance would be helpful.

in S.E. Wisconsin, I'm Netting ( before repairs/vacancy/CapEx) ~ $20K/yr with 6 rented doors. with about $100K spent ( down payments) or arguably less, as i do roll over my profits into new down payments.


Outside of simply calculating/assuming what I'd need to retire, then ensuring that my ( actual, bottom-line) NOI covers that. What are other factors i need to consider?

- do rent increases  generally outpace inflation?
- do property values  generally outpace inflation?

as the properties are paid off,  I could of course sell/refi in my later years if required.

What items am i missing to think about?

Much thanks!
Robert

SO!!
my SFH rental likely has a solid $50K+ Available in equity...

( $100K+ value / 28K owed @ 2.75% / assume 80% LtV)

I cannot find a lender that will do a HELOC on an investment property.. I'd like a HELOC as a psuedo emergency fund and/or to help with a larger DP on future properties

I have the $28K in cash but it's my D.P. account for my next property.

one Idea is to Pull a $80K HELOC... and toss my cash at it

( or more than likely pay off the primary, then refi the paid off home with a HELOC)

Thus giving me the entire $80K as a credit line....

if i pull... $40K out for a duplex DP I could likely replenish in < 12 months (if the property doesnt need further funds)

Thoughts?

Thanks james!
that FHS "hack" is definately part of my game plan.
as i dount i'd afford 25%+of a decent quad in a timely matter.

(which means i should likely properly re-do my kitchen in the unit i currently live in.
it's fine for me,  but i wouldnt rent it as sits)

thinking i'll  try 1-4 units until i run out of easy financing... then may slide over to midsize multi.

Cheers!

Good day!

Been an exciting 2 years, and hopefull i'm just beginning!!

**1**
Closed on a local  (Kenosha, WI) Duplex in May 2020..
Upper/Lower ~ 1,000 sq fot per floor, plus basement storage/laundry and a large garage.
moved into the lower Aug1.
20% down, on effectively $125K... appraised then for $140K, more now (appreciation plus repairs)
Bank gets* $728/mo  Upper tenant pays $755 (still well below market)
( insurance of ~ $59/mo and water $25/mo not escrowed)
* i was paying $1000/mo all-in at my 1br ~ 550 sq foot apartment  rent/garage rent/insurance/utilities etc..

**2**
While i was under escrow on #1 my father had passed away. Both my brother and myself are not local to the hometown (Escanaba, MI) so things were slow moving.   Upon discovering that the home value was much less that we would have guessed  but the prospective rent was much higher than thought i decided to buyout my brother.

so before new years 2020 i had a 1378 sq foot 3 bedroom "farmhouse", full basement with laundry,  large corner lot and  large garage.  tenants pay all utils. including trash/water/sewer/etc
PITI is $370/mo ; rent is $800 I was able to get this home withotut a down payment.. we got it out of the estate's name.. then brother quit-claimed his portion to me.. i then did a cash out "refi" to pay out brother.

**3**
the "plan" was to wait until spring 2022 to purchase the next adventure
(seems as all my tenants are on M2M  i cannot use the rental income until it hits my Sch E, so had planned to wait until after taxes)

but i never stop looking and found a duplex in the next town over (Racine, WI)
Another over/under Duplex ~ 1,000 sq/ft per floor
Laundry/storage in basement, small garage
as listed tenants were paying $675/$695
25% down as it  is an investment on $150K
PITI+water is ~$900/mo  gross rent is now $1695/mo and still has  room to grow.

**Moving Forward**
I've been saving then buying.
I figure between the 4 rented units and the fact that i *agressively*  save at my W2 job.
I could recoup the 25% downpayment in about a year.. and repeat. ( similarly priced duplex)

While inventory of such is low around here, I'd LIKE to get into  a decent 4-flat..
at that point i'd likely move into it to take advantage of owner/occ items..
specifically < 25% down..

WHAT should i be looking for as i grow my portfolio?
I know i need to start looking more into tax strategies.
I understand that save/buy is a (relatively) slow  way to expand.. but i'm also not looking for a "Boom"
I'd be hard-pressed to refi... i've decent  rates and for now i'm looking at cashflow until i'm not dependant on my W2 job ( i think  that at 7 units i could "get by"..barely) then i can  move towards being more concerned on long term wealth/retirement/equity

The rentals have their own business account that i do not dip into*
* I do not pay myself rent, BUT the business account does pay my personal gas/electric.

from my W2 earnings i spend about $1300/mo on everything ( from car insurance to eating out), rest is saved

any new downpayments are a mix of business account and savings

With the 5 total units ( 4 rented; 1 personal use)  I "Cashflow" about  $1K/mo
but that number does not account for any CapEx.

What might you change/suggest about my strategy?

Robert