All Forum Posts by: Bill Goodland

Don’t know if this has already been shared but I thinks it hilarious. Really hope this landlord is a BP member https://www.google.com/amp/s/www.thesun.co.uk/news/6475165/france-landlord-revenge-nightmare-tenants-rubbish-new-home/amp/

@Nelly R. Sounds like you need to find a new realtor

I would recommend being a lot more specific with what you are looking for. What zip codes are you looking for? What level of rehab are you comfortable with? What price points are you comfortable with? Do you have proof of funds or financing lined up? Do you have connections with contractors or partners that are going to help ensure the success of your project? These are things that someone bringing you deals whether they are a wholesaler or agent are going to need to know.

@Nolan B. Sounds good man. I know the feeling of wanting to be out of debt, but if the goal is to retire early by creating cash flow from real estate I would personally recommend working on your personal financial position first(living frugally), then increasing income(already doing that by going to PA school), then make the best use of your free time. Right now thats probaby through educating yourself, maybe working part time to save some money, and once you're done, working per diem or on real estate. Depending on your situation, you may be able to even save up enough to qualify for an FHA loan for a house you can rent out rooms to classmates in grad school with and drastically cut down your expenses and debt there while gaining experience and equity. Worse comes to worse you have student loan money at your disposal if something crazy comes up.

I know my approach of aggressively trying to acquire assets instead of paying off debt first isn't for everyone, as it does mean more perceived risk, however also consider the opportunity cost of missing out years of real estate experience, loan paydown and cash flow you are missing out on by aggressively paying off debt first to save 5-6%, when your returns from real estate can very well be double that. while benefitting from leverage.

Originally posted by @Nolan B.:

Hello everyone!

I just made my account and am excited to become more involved on the forum. I've been listening to the podcasts for a couple weeks now and it is definitely making my commutes more enjoyable while teaching me a ton of new information.

I graduate from college in NJ next semester. After that, I am attending graduate school in order to become a Physician Assistant, which will leave me $100k in total student loans debt while also earning a starting salary of about $95-$100k a year at 24 years old.  My main goal in real estate is to establish a "passive"(I understand that it's not entirely passive and will most likely be on par with a part time job) flow of income so I don't have to work the classic 9-5 until I die, while also allowing me to have something that could potentially be passed down to my (future) kids. 

I was wondering what tips everyone has for me. Pay my loans off as soon as possible and live like I'm broke for a couple years? Invest early?  Has anyone been in this situation before and if so how did you handle it? I read the book "The White Coat Investor" which was super useful but did not heavily discuss real estate options. 

 Hey Nolan, love where your heads at man. I’m in a similar boat just a few years ahead of you. I’m graduating from PA school next year and plan to buy a househack right away and start building a portfolio. What everyone else said I agree with for the most part, in that you should keep your expenses low and look to househack.

I do however believe that since you will be making good income out of grad school and want to buy right away, as long as your debt to income ratio is okay and you have proof that you were recently in school, there should be no reason why you wouldn't get approved. 2 years employment requirement doesn't apply to recent students and more so to protect banks from the independent contractor worker type that can have extreme swings in income that can be more risky for the bank to loan on. That is my understanding of it at least. You can always talk to a lender, but cross that bridge when you come to it. For right now, focus on educating yourself and making connection both in the REI world and healthcare world. Seems like you have a decent enough head on your shoulders to know that living relatively frugally and house hacking is the way to go when you're starting out.

My personal recommendations as a future PA though, is look for jobs that will allow you to work 3 12 hour shifts a week as your full time job. That gives you the flexibility to work on your real estate on your 4 days off, travel, or pick up extra shifts at what I'm seeing for new grad per diem rates at closer to $65-70 an hour($50 is more of an hourly rate for salaried employees with benefits attached). May not be ideal when the 12 hour shifts may include nights and weekends, but if you did that for a few years and worked your butt off, there's no reason you can't reach financial independence by 30. That is my plan and along with househacking to decreasing my expenses drastically by eliminating a rent payment and my goal is to gross 160k my first full year out between my full time job and extra money from per diem shifts. That leaves a large buffer to either pay off loans or invest. What I plan on doing and recommend you do the same is try and refi to a lower rate. If you can refi to high 4's or low 5's, why not do that and build cash flow to cover the payments on your student loans? No reason you can't achieve double digit cash on cash returns from REI and start building the cash flow from the get go.

I’m in the philly area and would love to chat sometime and hear about where you’re going to school and what you’re plans are. Best of luck.

Originally posted by @Cam Jimmy:

Wow, Thanks everyone!

@Brian Dennis I paid labor costs on big ticket items listed in my original post only. If I was to guess the amount of labor I would have paid for what I did..I'd say $20,000 more. In that case, flipping would have been the way to go with this one instead of the BRRRR

@Lien Vuong Thank you.. and Excellent LLC name By the way :)

@Rafael Zavala Definetly Man, Keep thinking of the end game!

@Bill Goodland I hear you man... If I was to sell at appraisal amount, I'd have to pay $20k just to realtors and closing costs. and on top of that, I'd have to pay taxes on the 47K in profit after that. Since my wife and I work full-time I'm sure we would have to pay a crap ton in taxes.  I'd rather rent the place out for a year and 1031 exchange this house into a fixer upper duplex/tri/4-plex. This is my reasoning for renting...at least for now. However ive been brainstorming this for the last week or so. There are just so many paths I can go with this. Thank you for the feed back. Much appreciated.

@Alvin L. Thank you. I went through an apprenticeship and was around other trades. picking peoples brains, and Youtube. Also trial and error lol. Yes it is very rewarding...but very hard work.

That makes a lot of sense man. I actually like that strategy a lot of BRRRRing an SFR because rehab upgrades add so much value, however when you do that you build so much equity that rent to value may not be there anymore. But if you can 1031 that equity a year or two later into a higher return you get the best of both worlds.

Just curious, since you rehabbed everything to begin with, did you seem to notice that the upgrades finishes weren’t even that much considering how much value they add? I know it’s a controversial topic and wondering your take from the experience.

@Cam Jimmy great job on the rehab and adding a ton of value, you guys did an awesome job. Just curious why you’re deciding to rent this place out instead of sell as a flip? While it’s awesome you captured a ton of equity in the 67k, it’s hard to imagine getting a strong enough return from cash flow on that equity to justify holding a 2BR. While I admittedly don’t know your market or your investing strategy, it’s hard to imagine achieving the 1% rule of $2,200 a month in rent for a 220k ARV on a 2BR home. If you were to cash out at 75% LTV, even at nearly 1% of all in cost of say $1,550 a month and say maybe $200 a month in cash flow, that’s less than a 4% return on equity. In other words, I would personally look to flip the property to avoid the opportunity cost of not using that 67k for a better cash flowing property with a higher return. Just playing devils advocate here and maybe provide you with some feedback to re-evaluate strategy. No matter what, building 67k in equity is an incredible feat that I commend you for. Keep at it

@Michael Zuber I think any 25 year old can absolutely be financially free by 35 but it obviously depends on a ton of factors. As a young adult or student we are forced to live like one by living on a budget(barring a ton of help from mommy and daddy or irresponsible student loan borrowing). It’s not that complicated to limit the amount of lifestyle creep on your expenses as you grow older, just so few have a strong why that keeps them disciplined to. Although I’m not suggesting your friend should go obsess clipping coupons; living relatively inexpensively while finding ways to maximize income whether it be through additional schooling, working a job with growth potential or building a business. One thing that’s helped me is creating spreadsheets to set goals on savings and approximate returns and running different scenarios on how I can get to my goal of financial freedom. With student loan debt, a median salary, and below average effort, you can’t expect vast riches in 10 years. But with some additional effort to increase income, limit expenses, and maximize returns ideally through safely leveraged, value add cash flow real estate investing; I believe someone with reasonable expectations of what it would take to cover a modest 35 year olds bills of say 5-10k a month to allow them to stop working full time can absolutely accomplish that in 10 years.

Currently keeping my eye on a lot of submarkets in my area and running numbers as I plan to buy a property to househack next year upon finishing grad school. My question however is, what website to trust for the most accurate estimate on property taxes? I like different real estate listing services for different reasons, Redfin, Realtor, Zillow, Trulia etc. however they all seem to give vastly different property tax estimates that can take a property worth considering offering on to one that simply wouldn't work. I know it is possible to individually search county records for each properties' county website which I will absolutely do once I am ready to make an offer, however when I am simply browsing properties online without MLS access, I don't think that should be completely necessary just yet. With that being said, what does everyone recommend for the most accurate estimates on property taxes?

@Stephen Thomas Tax Free Wealth by Tom Wheelwright has some great strategies to go about this. Got the audiobook for free through access to an app through my public library. Good read/listen