All Forum Posts by: Spencer Nelson

Mark, if my understanding of the Greeley area is correct, a lot of the growth in the last 4 years has been from the oilfield. I saw the same thing on an absurd scale in North Dakota. Has there been much movement since the the oil industry crash that we saw last year?

I've been passively thinking about a multifamily unit in Greeley. My siblings are out there at UNC and my brother is always egging me on about being his landlord.

None of this is an actual loan, as some of you pointed out. I'm mostly figuring out the best way to actually measure my own profit and pay myself. At the end of the day, it's all just on paper, so I'm not too worried about any tax or legal issues. Just a mentality. I appreciate the feedback.

I'm looking for some opinions on a way of personal accounting for the way I finance my properties. I currently only have a condo, but I'm going to try to buy a multi-family the next time I'm back in the States for more than a day or two, so I want to iron out some of the finer details on this system. Forgive me for the long post and perhaps a few creative terms as accounting is not my forte.

To finance my first property, I put 20% down on a traditional 30-year mortgage from a local credit union. To finance the 20% down, I used a line of credit secured against my personal investment account, which was far more convenient (and tax-effective) than liquidating a substantial portion of the account. Since I can draw and deposit as I please on this line of credit, I'm just paying it off as fast as I can to be ready to use on my next property.

For the sake of accounting, I had originally labelled the down payment as a cash investment. However, I've started to look at it as more of a loan to myself, separating my personal account from the property, at least on paper.

To do this, I essentially charged my property a standard monthly payment similar to a mortgage payment. I put an interest rate at 1% higher than what I pay for my line of credit, although I plan on experimenting with this number in the future. I set a payoff time frame for 90 months (1/4 of the mortgage size, therefore 1/4 of the time to pay it off).

The upside to this method is a simple way to pay myself. I personally make money by lending to my property business. At the end of the day, my personal salary is the interest.

The downside is that it kills my cashflow when I look at the property account. Seeing a lot of red on the spreadsheet isn't the best, but it doesn't matter too much at the end of the day since it is all internal to my greater financial network. This is all a way of drawing lines in the end.

How do some of you account for putting your personal investment into the property as a down payment? Have any of you used the idea of an internal loan or is it essentially an investment with the payout of controlling interest?

Hello all! My name is Spencer Nelson and I'm from Colorado Springs. I'm an engineer working in the oil industry and have spent most of the last 4 years travelling constantly. Even though I've been interested in real estate investing for a while, I didn't want to try to buy my first property at a distance. I bought a condo over the summer while waiting on a visa application with the intention of living there on my days off and then renting it out when I got a longer term assignment. Right after buying it though, I found out that I had to go on the road for 6 months, so I'm now trying to rent it out with a property manager.

I'd like to build up a portfolio of residential rental properties in the Colorado Springs and Houston (where my headquarters are) areas. I'm looking for turnkey properties for now since I don't have the time for any substantial renovations.

I'm a big fan of the BP podcast and have read more blog posts than I can count, but I never got around to joining in on the forums. Until now!