All Forum Posts by: Justus Angan

 Good recommendation about looking for a more truly passive investment! A lot of people learn the hard way, and want a level of control, but aren't prepared for the actual work it takes to make an investment successful and manage a property properly, especially with little to no experience.

 >with a family (wife + 7 kids) I don’t have time to spare with all my responsibilities.

This concerns me more than that you are capital limited.  Owning Buy and Hold residential rentals are not passive even with the use of a property manager (PM).  PMs need to be managed.  Managing properties without use of a professional PM requires setting up processes, dealing with tenants and contractors, staying current on the various rules and regulations.

Given the "don't have time to spare" I highly recommend the use of a professional PM.  Staying aware of the various always changing rules takes time and is important.  Failing to keep current on the various rules can cost you a lot of money.  I see posts regularly on BP that to paraphrase, " I Fu[ked Up and how do I fix this mess I created it".

I suggest you look for a more passive investment. If you want to be in RE maybe a syndication, REIT, NNN, etc.

Good luck

@Justus Angan do you have a 401K, you can tap into it as a loan up to 50% or $50,000 on it. The next option is a personal line of credit from the bank (as long as you qualify for DTI with it you are good). A couple options here and the next one would be taking that $100,000 going to do a flip, do the flip property (have margins for $40,000). Just a few quick thoughts.

When you say $700 cash flow, do you mean $700 after paying mortgage, taxes, and insurance? Or are you including some set-aside for maintenance, vacancy, capex, PM, etc?

You can ask friends or relatives. You'll be surprised how many people you know that have money socked away, particularly after all the "free" cash our government has given out the past two years. The danger is that you typically don't know how they are as a business partner. If things go south, you could lose money and the relationship. Can you pick up an extra shift? Sell something? Deliver for Door Dash? Network with other investors at a meetup and partner with someone? 

@Justus Angan why aren't you using the power of leverage. Using some broad strokes. Assume 1% rule. monthly = .01*purchase price. 150k property brings in $1500. Assume 50% rule where half of rents go to expenses. Profit of $750 per month for paid off property. Assume you use 50k -down per property. 100k financed@ 4%= $477 per month. $750-$477=$273 profit per property*3= $819 profit. now let's project into the future. Assume 3% growth. Paid off property worth $195k, increase of 45k. Growth in 3 properties is $45*3 or $135k. Now after 10 years you owe 79k mortgage or 11k more per property or 33k total. $69 more cash flow per month. *120 months=$8280. recap paid off house grows 45k. Financed houses grow 135k plus 33k equity paydown plus $8280 more cash flow. You would be more than 100k ahead by financing. 

We would have in my market a surplus of options at, around, or just under 1% monthly rent to purchase price ratio. In fact I don’t usually tell investor buyers to go much above $200,000 as the ratio becomes skewed. 

If 0.9% becomes more acceptable to you, the door becomes even more wide open. 

Happy hunting!