All Forum Posts by: Ron Healy

Welcome Ty.  My wife and I have been in Anchorage for 12 years.  We simply love it here.  Like you, we have a mix of retirement strategies, but are actively moving some of our stock portfolio into real estate.  We own one SFR rental here in Anchorage and are keeping our eyes open for a reasonably priced multi.  We are also looking at real estate based crowd funding opportunities as a way to diversify our assets.

As has been noted above, the Alaska market is much like the rest of the west coast - it's not easy to find reasonably priced properties that cash flow.  Consider too that we have unique risks (i.e. the state of our current budget and our dependence on oil.)  However, start making contacts, develop your network, and opportunities just might arise.  

Great podcast.  Loved it!

@Andrew Syrios your comments are right on the button.  Communities throughout the mid-west in particular will have a very difficult time recovering without local banking services.  While the number of small banks in the US has been shrinking for years, Dodd-Frank has significantly added to the burden.

I agree completely with @Jeff Copeland. It took a while, but we found a local bank that is willing to give us recourse commercial loans on SFR's purchased under our LLC. The interest will be renegotiated every 5 years, but the loan amortization will remain fixed at 20 years. Those are terms I can live with knowing everything is completely above board. Sleeping well at night is important to me. :)

Assuming $250,000 purchase price, 20% down, 5'ish% financing, $24,000 gross income and applying the 50% rule, your projected monthly cash flow per unit is minus $40 and your cash on cash return is about 3.5%

The property certainly might warrant a closer look, but given these rough estimates I would be very careful.

Wow, well done indeed!  I'd love to hear further updates on what went well and any lessons learned.

Brilliant, thank you @Dan Nelson

BP'ers,

I'm looking for recommendations on property management companies in the Detroit area, especially from anyone who has 2+ years experience with their PM. I'm particularly interested in small to medium multi-family properties, but would consider SFR's as well.

Thanks!

@Kevin Childers analysis is spot on.  Yes, in the short term it is difficult to see past the instant returns of employer matching in a 401k.  However, my own experience is instructive.  Over the years I have maximized my contributions and along with employer contributions my real rate of return has been about 6%.  Remember, the larger the 401k becomes, the smaller the growth impact of employer matching.  401k's make sense for many people because they are a relatively safe, 'forced' savings plan.  They may not make sense, however, for the savvy investor.

Great questions @Scott Sewell.  They bring my query to the next level.