All Forum Posts by: Will Pritchett

@Craig Coleman essentially it is; assuming you have calculated for expenses such as vacancy, cap ex, etc. before estimating a cash flow of 300. To the positive, you also gain the depreciation as a loss for tax purposes and debt pay down by tenants. Sometimes the P of PITI gets overlooked. I like to think of that as a bank account called "equity". It's not liquid, but it is yours. Lots to consider but I hope this helped.

Good luck!

-Will

@Taylor Philley awesome!! And you got your first BRRRR under your belt. That is a great thing. Thanks for the deal diary. BRRRR is our favorite strategy. We don't always take all of our cash out either but always leave less than going conventional. Always create equity. Congratulations!

-Will

@Ben Bymaster great advice here. There is so much free information out there. BP podcasts as well as the other podcasts available. Audiobooks etc. Can almost become overwhelming. Networking is the cheapest and most effective marketing we have done. I totally agree with others on the value in this. You never know who has deals and money that is looking for help. Just be willing to talk to people. 90 percent of beginners wash out. But when people see you are sticking around for good you will begin to gain credibility.

Personal finances in order first too. I hate to see folks start in this that are in desperate situations financially. Learning how to handle money personally will carry over to business.

Let me know if I can help. I like to see people succeed and not wash out or chase the next shiny object they see. Stay determine to succeed and you will. Good luck!

@Cynthia Veenendaal  great post. Very interesting situation. I love Texas and San Antonio but I haven’t spent much time in California. I will say that we tend to be much less cyclical than California. Jason Hartman has very interesting views on the economy and California. His Creating Wealth Podcast is worth a listen for another perspective. There is a lot of content so maybe scroll through to look for topics that interest you.  He would describe your market as “cyclical” and others as more “linear”; linear being the safer option for long-term holds.  

The problem of investing your profits at the top of a market cycle are similar to those faced when trying to do a 1031 exchange. One strategy, other than obviously finding great deals, is to move that money from a cyclical market to a more linear one.  Just be careful because a fair number of California investors come here and buy “deals” because our prices look so cheap by comparison. Make sure you buy good deals. The good news is you should be able to take your gains tax-free from your home. That’s nice seed money to start with. 

Hope this offers some food for thought. 

Good luck,

Will

@Allan Quintela @Neil Schoepp nailed this one. Totally agree. To me rentals are the long-term play. And long term cash flow. I meet so many wholesalers and flippers who want to get into rentals because they work HARD for their profits and they see the relative passivity to rentals. I like flips from time to time but still wish I could keep every house I’ve ever owned. Good luck with your decision.

@Matthew Herrera I am not a lender but I believe the answer regarding the PMI is that it depends on what type of loan it is and when you originated it. The old FHA loans would allow the PMI (or MIP) to drop off after a certain LTV was achieved but I believe some are for the life of the loan now. Perhaps a lender will chime in. If yours is that type then maybe just do a cash out refinance to 75% LTV and avoid PMI on the new loan. If you do this while you live there the terms will be better. However with a larger loan, you'll need to be certain it still cash flows well.

If you buy a new primary residence, you may be able to put 3-5% down again but you'll have PMI, I believe.

As far as a Heloc and refi, I don’t know. If you only refinanced the outstanding balance, I would think you could then do a heloc to access some of your equity.

Hope that helps a little. Best of luck!

-Will

@Brian Kelch I know it’s not a traditional periodical but I read blogs and write a blog. Not sure what the rules are here for posting it but Private message me if you’d like the link. Best of luck!

@Skylair Richter welcome aboard. You came to the right place. House hacking can be a great option, as Seth pointed  out.  We love rentals and also find small multis difficult to find that make sense in San Antonio. They do exist, however. I think learning as much as you can about zoning would be time well spent. I know that some of the rules are quite strange and can change from street to street.  

Let us know how we can help. 

Good luck,

Will

Thank you for the great info, Chris, as always. 

@Chris Mason where can we see what is decided? Is there a good page to keep an eye on regarding these rules?

Thank you,

Will