All Forum Posts by: Justin S.

Anthony Don't you feel that sometimes those high cash flowing properties do not appreciate as well(at times)? I guess the point of my post was that I like having a mix of high cash flow and high appreciating properties. I was able to get in to very good turnkey properties with zero money out of pocket because I started with high cash flowing properties. If I continued with my type of high cash flowing properties the appreciation would not go up as quickly and it would slow down my buying power. The higher cash flowing properties in my area tend to also be more management intensive. Something I'm trying to get away from. Of course we all need cash flow but I'm transitioning to a more conservative portfolio as I get older. About to turn 41.

I started investing in 2008 I started with high cash flowing properties in C+ areas. The more cash flow I had the more I could save to put down on my next purchase. Now I have 32 units and the most recent one I purchased was an 8 unit in an A area but not a great cash flowing property(taxes are pretty high) But it's a turnkey building and I'll probably have 50k instant equity the day I close. That's $37,500 of equity to pull out to buy another property. The cash flow on my C+ properties are allowing me to now buy A area properties. These will appreciate much quicker and allow me to pull out equity to buy others. It's worked for me. I have not used my own money for down payment on the last 18 units I have purchased. My cash flow over all properties is still very good even though the new purchase ROI is not the greatest. I consider it more of an equity purchase

I have an 8unit building under contract and am thinking of selling a 4unit of mine and do a 1031 exchange. If I sell the 4unit I will be cash flowing $7,000 less a year but put roughly 50k in my bank account and of course acquire the greater asset. If I don't sell the 4unit and just use equity to purchase the 8 unit I will cash flow $7,000 more but will not put anything in my account but will keep all assets My questions are: 
How often do investors take cash out like that? 
Am I crazy to sell an asset when I can purchase the 8 unit without losing the 4unit? Thanks for the responses in advance.

I'm sorry. 7,000/yr

I have an 8unit building under contract and am thinking of selling a 4unit of mine and do a 1031 exchange. If I sell the 4unit I will be cash flowing $7,000 less a year but put roughly 50k in my bank account and of course acquire the greater asset. If I don't sell the 4unit and just use equity to purchase the 8 unit I will cash flow $7,000 more but will not put anything in my account but will keep all assets My questions are: How often do investors take cash out like that? Am I crazy to sell an asset when I can purchase the 8 unit without losing the 4unit? Thanks for the responses in advance. J

 do you mind explaining why you go with the 15 year note and not to exceed 60 times the monthly rent and purchase prices?

So I'm purchasing two 3/3 doubles(C/C+ area)

The doubles were from the same seller two streets apart so I bought them as a package.   

Please let me know if I am missing anything.  Also, If any of you would calculate this deal differently let me know.  Always looking for different ways to analyze deals.

  Here are the numbers:

Purchase price-$143,000

Down Payment-      35,750

Closing Costs-          7,150

Taxes-                     3,600

Insurance-               1,800

Mrtg Pymt(30yr)-       994/mo

HELOC(closing costs)-75/mo(10yr amt)

Rents(Minus 25% M/V/M) -1,965mo

Water-                         40/mo

Plow/Lawn Care         60/mo

Cash Flow-      1,965-994(mortgage)=971-100(h2o/plow)=871-75(heloc)=796x12=$9,552

Cash On Cash Return-$9,552/35,750= 26.7%

I currently buy and hold properties in the Buffalo, NY area. 

I am trying to find something else to do in the real estate field to generate revenue but am not sure which way to go.  My current thoughts are the following in no particular order:

*Property Management

*Flipping

*Wholesaling  (Honestly, Im not quite sure how to do this)

*Teaching others and charging(I feel a little weird about that) I paid a guy when I was 19 and I don't feel that I got much out of it.

Any suggestions on what to look in to or on the best way to get started in these or any other additional revenue avenues would be greatly appreciated.

J

Karen,

I love the deal too, love it!  I'm getting a little burned out with my small business and thought if I could pay these off sooner I could scale back on my business or even sell.  once I am all paid off I would probably start buying again but leaving those 18 units free and clear to live off of.  

I would love to hear from anyone who has paid off there portfolio early strictly for peace of mind and an early "retirement"?  

P.S. I will never fully retire, I would die of boredom

Rick and arlan

My main reason to want to pay them off is too be done "working" and se

As for the risk of the taxes and insurance. .....to me that's not risk(subjective of course)

Thank you so much for the continued responses, it's helping me think through this decision