All Forum Posts by: Raj Gandhi

Welcome to the site!  Nice to see someone else from the Twin Cities.

I know that I listened to a podcast recently where the interviewee advocated goal setting.  I've only been ascribing to BP for about a month and I listen to the podcasts out of order so I'm just grasping at straws when I think it was in the 30s, 40s, 50s or 80s...  In the podcast, the interviewee talked about setting 100 goals with something about the big-picture and value of doing the exercise rather than the individual goals.

Specifically, I'm less interested in goals as tasks.  S.M.A.R.T. is a system that has value but is lower-level than I want to study.  SMART is essentially a 2-page worksheet about writing good goals (almost tasks).  My concern with tasks is that they become never-ending to-do lists.  Completing the tasks are less and less fun and, by virtue of the 80/20 rule, lower and lower value.

Ferriss' 4-Hour Work Week has a section about Dreamlining that is similar to what I'd like to study.  Ultimately, I'd like to find a good book around goal setting that either expands on Dreamlining or sets up a alternative philosophy / system / process.

Fwiw, here's a little of my personal story. After university (MS EE), at age 26, I set a goal to have $x assets by age 35, $2x assets by age 40.  Note these goals are for assets and ignore debt.  By age 45, the goal was to have $2x NET assets.  To make the goal interesting, it was impossible to achieve the goal on my engineer's salary.  Real estate investing was the way I picked to meet my goals.  I'm 42 currently and was late with the age 40 goal but exceed it now.  After conferring with my wife, the age 45 goal isn't as relevant as it used to be.  Instead, my new goals are to be semi-retired (not working for "the man") by age 47 and $8x assets by age 50.      

The reason I want to study goal setting is for life balance and progress.  I don't want to succeed financially at the expense of family.   Just like my 35 and 40 goals, it will take a minor miracle to achieve my 50 goal.  Rather than using an undocumented plan, I'd to help set intermediate goals for the next 5-8 years to get to where I want to be. 

I'm trying to calculate purchase cap rate of my older rental(s) in order to evaluate a new possible deal (8%).

All of my other rentals were purchased with cash, rehabbed and then cash-out refi.  For capital cost, should I use 25% of the appraisal (assume the refi loan was 75% loan-to-value)?  The reason I want to do this is because some of the previous deals I was able to refi more than my actual cost of purchase + rehab.  While it is nice to have infinite cap rate, not many deals like that are available.

I've hit the limit of properties that I can cash-out refi conventionally, fyi.

Hello  Chris and De Juan, nice to meet both of you.  These days I'm working in either Fridley or Brooklyn Center.  Andover, isn't that North of Coon Rapids...?  That's basically Canada, right?  ;)

In previous years, I briefly looked at foreclosures in Brooklyn Park/Center.  The area was full of them.  In fact, so full of REOs that I decided there must not be enough housing demand.  I recognize that's flawed reasoning.  Maybe I should weigh Brooklyn Park/Center against South St. Paul.  Those might be comparably priced markets.

- Raj

Hi @Charles Kuchlenz 

I believe property taxes in Woodbury are comparable to other areas of the TC metro.  They might be higher than Hudson or Roberts Wisconsin.  We only lucked-in to living in Woodbury by chance.  Schools, parks and soccer fields are very nice and so is the shopping.  

I looked-up one of my rentals: $2044 in tax per year on an assessed value of $138,000.  The city's portion is $505 of the tax.

Funny you mention soccer.  I'm the Woodbury Soccer Club past president (I still volunteer significantly for the soccer club).  We just hosted a 160+ tournament at Bielenberg.  

Nothing personal but we hate playing Eau Claire and Chippewa Falls.  :)

-Raj

Thanks!  When you're getting close to moving (3 months?), consider doing some research on multi-family.  

I'd like to get into a (low-income) multi-family building but property management is my 2nd greatest concern.  I'd like to have someone on-site to keep an eye on tenants but I don't want to live there myself.  Finding a young, hard-working entrepreneur to oversee the place would have value.

Raj

@Jason M. I started with Twin Homes because that's what I could afford. I specifically looked for non-HOA neighborhoods and 3+ BR or units that could be converted from 2 to 3 BR. I deliberately wanted to stay away from 1 & 2 BR units because I thought the tenants would be less transient and rent for more. As a result, most of my tenants are families with kids in school. So. Washington County schools are wonderful (district 833) but some of the adjacent school districts are less desirable.

Cottage Grove is still in 833 but Oakdale is 622.  People with kids deliberately move out of 622 because of the schools.  Take that for what it's worth as the school district perspective.

My Woodbury units rent reasonably quickly, 0-4 weeks for the last two Twin Homes.  I also  manage one rental in Oakdale.  That was a bear to rent-out because it was winter, the owner wanted premium $ and wouldn't replace the carpet, remove old wall paper and paint.

I'd do another Twin Home if I could find one in Woodbury with as good numbers as my others.  Seeing that I can't find that property, I've been considering smaller multi-family, possibly in East St. Paul.  I don't have $ for that downpayment currently so I'm sitting on my hands, listening to podcasts and joining discussion forums.  ;)

Raj

Noob question... which sub-forum would be appropriate to ask about the pros / cons of forming a company (LLC) to hold one's real estate?

I looked at the title of all the forums and it wasn't obvious.

@Rodney Kuhl All the property I own is in Woodbury, a SE suburb of St. Paul. My ratios range from 1.25% to 1.0%. The best property was my first purchase in 2010 and it was in the worst condition. A few years ago, there was 1 bargain per month on MLS. This year, I don't think I've seen anything I'd call a bargain. Almost anything I were to purchase now would be in the 0.8% to 0.9% range (in Woodbury).

Hi all.  I discovered the BP podcast because my commute from the East metro to the North metro is terrible.  I needed something to listen to that was fresh, entertaining and informative.  The BP podcast is 2nd to "Sex with Emily"!

I'm an electrical engineer and have worked for some of the big biomedical companies for almost 20 years.  Several years ago I figured-out where that was going to get me... not very far.  I've tried investing in stock options and it is fun but there's lots of risk that I had trouble balancing. I'm still working for "the man" but counting the months until I don't.

Between 2010 and 2014, I purchased five rental units.  They are all twin homes (half of a duplex) with no association fee.  Recently my wife and I purchased a new home for ourselves and so our old home will be the sixth rental.  All are in Woodbury.  I'm managing one more rental unit for a friend-of-a-friend.

Due to the recent purchase of a new home for ourselves, I feel like I need to chill for the Winter.  I need to nurse the credit report and tax return for the next few months before I can borrow more money.  We've also had ongoing projects including getting #6 rented.  It will be nice to decrease stress for a while.  In the mean time, I've found BP and plan to use it to stay sharp financially.