All Forum Posts by: Tommy Ray

Also, I'd lease out the other bedrooms for additional income as well as practice screening, leasing, and interpersonal comms.  Better to jump all in and see if you want what you think you want ....

Also, I'd lease out the other bedrooms for additional income as well as practice screening, leasing, and interpersonal comms.  Better to jump all in and see if you want what you think you want ....

I suggest you turn your moment into the best learning / earning moment.  If you are living in a place that is satisfactory why not change the arrangement with the landlord?  How about a lease w/option to purchase structure or a straight owner financed sell to you?  

Investment Info:

Large multi-family (5+ units) buy & hold investment in Clarksville.

Purchase price: $330,000
Cash invested: $1
Sale price: $820,000

This was a zero down deal. I did pledge assets to cross collateralize. Contrarian investor play. Sold 820K 8-plex in Clarksville bought with collateralized assets. Make those dollars do double duty.

What made you interested in investing in this type of deal?

the 101st Airborne had taken an entire division to go fight Iraq in 2003. I knew those many tenants leaving would cause a problem for less experienced landlords.

How did you find this deal and how did you negotiate it?

I asked my habitually aligned buyers agent to locate a 5 unit or more deal. He found it in his office w/I hours.

Lessons learned? Challenges?

I used F&M Bank there in the same town to give me the full purchase price of 325k. I pledged the deed to a townhome I owned free and clear as well as the promissory note owed me on another property as additional collateral. Soldiers returned about the time I closed. Door rents went from $495 a door to $640 a door in a few months. At the end of one year I paid for an appraisal documented my 20%++ in equity and got my collaterals back.

@John A, sounds good!  

Not using ETrade or Morgan.  using the bank to agree to a set amount of stock that they will accept as adequate and that negates the wide swings you talk of.

AI / Robotics are pretty certain bets to me.  Testing an aggressive growth stock / fund overlaid on the best states for growth (texas/Florida). Overlaid on a deal bought below market value and then force appreciated to a house hack.  Vice a margin call you do a re-appraisal to see if you have your 20% equity to get back your collateral entirely.  

With the deal structure this was you get:

$ in stocks - providing--Div, Appreciation, Cap Gains leveraged to gain House with Equity capture, Cash flow (think house hack), principal pay down, appreciation, depreciation and write-offs and whatever the value of learning to earn is....  I have gained 100% returns on money invested with this method overlaid in a recoverable down market.   

Please define wealth.  What is wealth to you?  It is important before you start and get to far that you have an aim point...  A goal to work backwards from to today so you can make a specific plan and take deliberate action daily towards YOUR goal.  The longer the perspective the better.  

Imagine whatever the specific goal is-- maybe 100 rental units paid off for instance.  Now how to get there?  Realize at the outset that real estate will involve all different types to service, maintain, repair, improve, insure, manage and eventually sell.  Be in your future mind and realize how important it is to identify the range of specialist that you will need for the life of those assets.  Before you buy you 1st build you awareness of real estate investing, potential team members that you will need over the journey that will likely last the rest of your life and commence recruiting people and investing time seeking out knowledge and WISDOM.

Wisdom would say buy in the down cycles of the market and refi cheap when rates are low but investors often have ants in their pants.  Can you build a team local and in an away market--yes.  Do you need unique checks and balances in your away market so someone is representing your interests in the away market--yes.

Slow and steady wins the race.  Seek out mentors, seek out a greater understanding of the connected whole.  Over the years I picked business degrees, real estate license, tax preparation training, loan officer licensing and training, investment / CFP training and it is all tied together in one big connected body of knowledge that emphasizes appreciation, debt pay down, cash flow, and tax write-offs...  Invest--do not save.  Delayed gratification is good.  Learning is earning. Get'r done

Great post.  Lots of details.  35 years at this and 70% of the experience in buy and holds / property mgt.

Think contrarian investing--buying on the down cycles.  Same with the financing of the notes / portfolio when interest rates go back down and you wanna extract equity for a non-taxing event.

Monetize your detailed nature.  I LOVE THIS EXPECTATION MGT POST.  It is raw and it is real.  Dig it!  Never lose that.

You mentioned prop mgt assuring you taps are off and you ended up getting minority flooded.  They are licensed, they are your fiduciary I hope you made them fix what they caused.  In addition, I hope you added it to your own aids--"city turn on water at meter (often unlock it) and leave it in the off position so as not to flood home".  I always make tenant do it as a hand off a property and recommend they do it on move in day while they are there to react if something goes wrong, having a water key nearby.  Prepositioning water keys in the same location through the rentals is key.  Training tenants upon move-in is huge.  Water, electrical shutoffs, and how to reset outlets if they trip.

Use cross collateralization of stocks for your down if possible.  Use a home in a house hack manner if possible for cash flow.  Use the wholesale method of buying in a down market to amplify results.   Strategic patience and guided development for maximum results...  

I bought a condo as my 2, 3, 4, 5, 6, 7th investments. Being a military member I LOVED the idea that the expenses I specifically had to program money were limited to the paint / fixtures inward. If the HOA maintains the exterior and yard- WIN. That was what I thought and it matched my availability and asset sustainment needs.

Location location location--be somewhere where the state, city reinforce landlord v. tenant rights. 

Location near jobs, tourism, or other attractions (like an airport).  Projecting the growth and thus desirability and central location near the local market prime drivers is an important consideration.  

Make sure the CCRs/ governing documents do not put limitations on use. Some investment strategies like STRs may be barred or house-hacking even.

Condos may tend the limit "highest and best use" maneuvers.  In addition, they will limit LEARNING about investing but they will teach you more than you ever wanted to know about your fellow man.  Cash flow will be impacted and generally lesser if you are overly restricted or overly assessed/fee'd into the "red".

I hope this helps. I invest across the US and have condos within my portfolio. The investing and the tax code works for the LONG HAUL. Incentives are generally for the long haul... Be long minded in all things REI. Here to help. Good Luck! Get'r Done