All Forum Posts by: Shane H.

The tax strategy is a good point. 18k deduction vs. 3500... that could equate to an extra 200 plus cash flow... I see leveraged investments as far riskier though. Is 3k/yr in tax incentive worth that risk?

So as a business owner Cash flow is king. Maybe that's something I need to get over.

I think the answer has something to do with whether real estate is going to be your business or your passive investment.

I.e. if I sold my business to get into real estate I would need the cash flow. In my market I could spend 200k outright and have cash flow of close to 2k/month. That is a liveable income here albeit not a prosperous one.

Alternatively if I'm keeping my business or job and investing on the side I would want the most cash on cash otherwise i could just dump it in stocks for that purpose...

@Heather Olson

Thanks!

I understand the math behind it, so I'm seeking opinions more than anything.

I the general consensus in real estate investing is to leverage yourself into greater wealth. While I understand that, I would say it's definitely the long game... having 5 properties valued at 100k each instead of 1 at 100k with the same money in. You won't however, have the same time in. You'll be spending much more time keeping after 5 properties. And your monthly cash flow doesn't seem to be all that much better until you start paying then off.

So using generalities let's say I can leverage myself to get 12 units at 100/door. Or I can buy a small multi outright for the same cash in, but net the same 1200.

Who believes the risk of leveraging and the interest paid on the loan is worthwhile for the end result of a ton of equity in 25 to 30 years. Who thinks buying outright and gaining the immediate Cash flow is the way to go?

Man was this hard to follow...

@Joe Pearson you said the numbers don't add up for the neighborhood you're in... Sounds like you could be in the wrong neighborhood...

I also notice you don't want to touch your 401k... if you did tap into that, where would you stand? Convert to a self directed IRA, use that money to purchase, pay your it's rent. Then take the money you otherwise would have dumped into the 401k and save for the next investment outside the IRA. You will be building two revenue streams. Retirement, and now...

Here is an example of a property I am evaluating. I never seem to get quite what I want to see on a deal. I wonder if I am too heavy on the cap and repair costs. The asking price on this property is closer to 200k. I adjusted it to get numbers that were even close to what I thought were good. I'm fairly sure they wouldn't accept this offer. Maybe I should go back to watching Dancing with the Stars...

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@Josh MADONNA hey I've sent you a colleague request and message. I'm interested in talking to you about this property. I may be able to help, and if not I would like to keep tabs on what you end up doing with it.

I agree that you need to know why so you can deviate. I couldn't show you monthly income and I have an awful credit score. My score is mainly low because I run high balances on my revolving credit. Then pay them off completely. Repeat. I do this at certain times of the year to keep everyone paid until checks come in. (I run a semi seasonal business.) But I have over 100k of assets with about 15k in debt when the cards are run up and that debt comes down every year. 4 years ago it was 75/40

And that is why I am entering real estate too try to bring some stability to my finances.