All Forum Posts by: P W

People will argue both sides of this, all cash vs other people’s money. For rapid growth, you can't beat OTM. How many rentals can you buy with 250K? Just as an example, let’s say the average house is 125K. With all cash you could buy 2 rentals mortgage free. Using other people’s money with 20% down you could buy 10 rentals. Each one of those units will be paying down the mtg for you and giving you equity. If you only needed 10% down, you could by 20 rentals.

Just a thought...

steve

I'm wondering just the opposite, troyce1. I don't see how having your cash needlessly tied up can be beneficial, because you lose out on the exponential growth you can achieve with the bank's money.

The best I can figure where all cash is useful is to find a good deal and then refinance (correct me please if I'm wrong). Say you buy a $100k (appraised) rental for $65k (all cash). Then you use the 100% equity to get a loan from the bank based on the appraised value of the house. So I suppose you could get $70-90k cash from the bank, which you can sink into other properties.

However I'm sure deals that good are far and few between.

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Originally posted by "rdinvestors":

With a properly structured deal, you won't have to put anything down on a deal. Keep reading the posts. There are many different ways to not use your own money.

If on occasion a great deal does come along in which you need to move quick with cash then you can jump on it. If you tie up all of your money you, would have to pass.

Please make sure to educate yourself before you jump. That $250K will be nil if you make decisions with out knowing what you are doing.

I suppose one of the areas I'm least knowledgeable in is financing. How can you arrange a deal with out putting up any cash? 80% of purchase price from the bank and 20% from the seller?

I'd love to use as little cash as possible on each deal since I want to buy as many properties as I can right now.

I'll keep reading the threads here. Several hours of it has already helped tremendously.

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Originally posted by "TimWieneke":

Not at all. The main reason to do this is exponential growth and the resulting cash flow.

Obviously you are good at running a business and have the concepts of cashflow down so holding commercial would probably work well for you. It's really no different than what you have already been up to. Find a stable market with solid returns and start negotiating. In this current climate, I'd probably stick to commercial that's anchored by products people will always need - food, clothing, shelter, insurance and alcohol.

Thanks for the advice. Sticking to staple industries makes a lot of sense.

Originally posted by "nephets":

How many rentals can you buy with 250K?

Originally posted by "TimWieneke":

25-30. :D But people here get all mad when I talk about this so I won't say anymore. :mrgreen:

Are you buying really cheap rentals perhaps? I'm more than willing to listen to your strategy, if you feel like talking. :D And I won't get mad either, I promise.

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Originally posted by "dafly":

You'll want to keep that cash in your pocket for now, the best thing about real estate is you get to do the majority of it with OPM (Other Peoples Money).

From my understanding I definitely want to use as much OPM as possible. After reading some threads here, it looks like I'm going to need to put down 20-30% on each deal... Though I was hoping it would be more like 10%.

Originally posted by "TimWieneke":

First of all, never admit on a public forum or to any group of investors that you have a quarter of a million to spend and no idea what to do with it. There are plenty of sharks who will have every idea for you.

That is great advice, and I know exactly what you mean. I have more faith in the advice given here than that given by the bankers/investors/realtors I've spoken with who have a stake in a potential deal.

Originally posted by "TimWieneke":

Decide for yourself what kind of lifestyle it is you want to lead and what style of investing will serve you the best. Also, we know nothing of you or your background. This is a key element to how you decide to invest.

I have good income, about ~250k/year, with plans to double that in the next year. I have no need to re-invest that much cash into my business, so I'd like to put it all in commercial properties to start multiplying it.

My current vision is to buy as much property as possible now, and then use the income from that, plus the income from my business, to buy more property. And eventually pull out equity and buy more property. By my calculations, the amount of property I can sustain will grow exponentially over time.

Or am I expecting too much?

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Hello, everyone. I'm new here.

I'm 25 years old and I have about $250k in cash, and I want to put all of it into real estate.

I have no experience though. I'm just starting to learn the basics, like cap rates. I don't really have a mentor type of person to guide me along, so I'm learning as much as I can.

What should I do? How much property can I buy? (I have good credit.)

This forum looks like a treasure trove of information. I'll enjoy reading all of the old threads.

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All Forum Posts by: P W

P W has started 2 posts and replied 15 times.

Post: I'm starting out, I have some cash, I could use some tips!

Post: I'm starting out, I have some cash, I could use some tips!

Post: I'm starting out, I have some cash, I could use some tips!

Post: I'm starting out, I have some cash, I could use some tips!

Post: I'm starting out, I have some cash, I could use some tips!