All Forum Posts by: Derrick W.

so maybe "potential future net worth millionaire" is the correct name? :)

@Anthony Gayden  yes I understand it much better now. I stayed up late last night researching these definitions.  And, as I said above I don't believe that in this example you would be a millionaire.  What got this started was the countless hours of pod cast, youtube videos and webinars. We have found guys That start out by saying "I'm worth 1.3 mil in rentals in 3 years" then teaches how he put x amount down, borrowed the rest.  I understand NO one would listen if he said "this is how you get to be 1 mil in debt in 3 years".  Is there a proper term for any of this?

I told y'all this would be a fun thread!

Net worth is a concept applicable to individuals and businesses as a key measure of how much an entity is worth.

If you have 80% debt and 20% cash down payment, are you WORTH a million dollars??? Yes,Some day all the bank notes will be paid off but the question is about "now"

Am I still asking this wrong?

crunch numbers!!!!!!!!!!!!

You cannot buy based on size without knowing what your cash flow will be.  Get a calculator and base your decision on numbers. 

we currently have 3 apartment complexes under construction (in Bryan) with another on the way. the  Rellis campus is where the next boom is. It is located on the outskirts of town in an undeveloped area, Aka NO student housing.  4/4 and 5/5's are going up everywhere in Bryan.  These guys are buying older houses on big lots, demo the house and build two 5/5s or 4/4s on it. That alone has drove the price through the roof on older homes in the more student centered neighborhoods.  

You should listen to Katie. Those ladies know what they are doing!

this was a discussion I had with a friend.  I say no as well. 

Isn't gross value calculated from production?

This should be a fun topic. For arguments sake lets say.... You have 1 mil net worth in rentals. Positive cash flow. Let's say it's all financed through the bank with 20% down on each.  That makes 20% of it your cash and the rest debt. Are you a millionaire?

yep. Building and fire codes would get you into more trouble if there were an emergency and folks couldn't get out of the house. 

former plumber turned city building inspector. My job is an incredibly huge help to my REI.

@Mark Kelley I don't follow the bankruptcy either but here is how owning a property out right was explained to me. 

You buy a house for 100k. The market crashes and your house now appraises for 80k. You just lost 20k until the market gets back to where you bought it at.  Not bad if you can sit on it. Terrible if you need a cash out loan to survive or grow. 

Also you buy a house for 100k. Now you get a cash out Loan to grow. You get 70%. (70k) Now you have 10k "locked up" that you can't get to. Not bad if you have cash. Terrible if your a little guy looking to expand.