All Forum Posts by: Steven Eitreim

City offices are notoriously inefficient and inflexible, being slaves to their own rigid processes.  However, that should benefit you in that if you follow the communicated steps to resolve the issue (hopefully in the letter, or you could call the number listed), and keep documentation of following those steps, you shouldn't have any problems.  I recommend recording names and dates of phone calls you have with the city, as well. 

Good luck.

I agree with the other posters. You have to look somewhere other than the MLS, or even the courthouse steps. Consider direct-mail marketing, or just driving for dollars (look it up if you're unfamiliar)... you need to uncover the opportunities others don't see. Best of luck.

Welcome, Gregorio.

I would definitely recommend tuning into the podcasts.  Some of the best and most successful investors sharing the secrets of their success.  I'm working my way through... almost at episode 100.  (almost) every one is pure gold.

Best of luck, from another newb.

 While I largely agree with Roy, we have to remember that that 50% return is only on year 1.  after that, it's subject to the return on the investments within the portfolio (although you can look at the gains from the company match as bonus, since that money was free to you). 

I was also just considering this option, and actually called Pensco yesterday (this was a sponsor of one of the BP podcasts) about transferring my 401(K) into a self-directed IRA. They also suggested it's very difficult to get access to those dollars until you leave your employer (which I also have no intention of doing).

I plan to use more home equity and creative financing to fund deals going forward... this option seems like a headache.

Since the "winners" in this game we play tend to be those who are continually taking the next step, YOU appear to be a winner.  Congrats, and best of luck. 

There's advantages and drawbacks to either option. Getting yourself highly-leveraged (using all the HELOC) puts you in a risky position should you have unforeseen capital expenses, and no way to pay for them. Worse yet, since most of the country has seen positive real-estate valuation gains since 2008/2009, should another "correction" occur, your equity withdrawl may leave you underwater on the property. Couple that with a large capital expense, and your boat may sink.

On the other hand, another property is another property.  Sure, if your only driver right now is short-term cash flow, you just have to compare the cash-flow of one property with a smaller mortgage to two (or three) properties that are all much more leveraged.  (also take into consideration having to manage more tenants with the 2nd option).

But the beauty of the rental business is that, for the trade-off of managing tenants, you are essentially getting people to PAY YOU to buy YOU a new house.  At some point, if all goes according to plan, those mortgages will amortize into thin air, and you'll own rental properties free and clear.  And would you rather own one, or many? 

I personally would take a middle-road.  Leave enough equity to maintain a solid standing on the current property financials (to weather a large expense or market correction), but utilize the rest for acquiring new solid properties. 

Good luck!

Great advice!  However, (again, from my newbie experience), those who are working with limited capital may be better off turning 3-4 houses a year (and paying the higher associated tax rates) than the strategy you mention.  But I completely understand your point if in a position of not being limited by capital constraints.  I work in the financial industry and understand well sometimes it's much easier to grow your profit by reducing costs on existing business than it is to land new business at current margin rates. 

Thanks for the perspective.

I'm dealing with the same situation near Minneapolis.  Rent is trending well below 1% of what you could acquire a decent property at.  However, the market is robust, so I'm going to use the following strategy:

While the market remains solid, I'll flip.  With higher-priced real estate areas, your potential for return (in terms of $, not necessarily %) is higher.  A 30% value increase in a high-priced area is much more lucrative than a low-priced one.  Then, if/when the market corrects to a lower cost point, I'll switch to buy-and-hold (hopefully cash flow is more reasonable then).  And later on, if values get back to "robust" levels, you could sell with the appreciation, or continue renting and cash-flowing at the favorable level.

This is all coming from a newbie, so take it for what it's worth.  A response that's likely been voiced hundreds of times over the years on BP

Hello, intelligent investors.

My name is Steve.  I'm happily married with 4 young children, and currently do corporate finance with a fortune 100 organization.  However, I'm intrigued with the thought of investing in real estate on the side, and potentially full-time in the future.  I've done a considerable amount of personal property rehab, but never anything for the purpose of turning a reasonably-quick profit.  I'm looking to join the community to learn from "the best" on smart investing as I test the waters. 

Sounds like a great community, here.  Happy to be associated with it.

Thanks.

Steve