All Forum Posts by: Zachary Beach

@Nathan G.

The government!

Basically the other factors I feel I can  mitigate.

The government being

Increased taxes. Property taxes, STR taxes, not being able to right things like interest or depreciation off.

Change in regulations

Bad evection laws.

Government collapse no one to enforce property ownership

Property  confiscation

Requirement for crazy high insurance.

I can’t make an exhausted list of ways the government could mess up land lords.

Many of the things are unlikely and I don’t worry about it to much but everything I have listed has happened to some land lord in some government at some point.

@Whitney Bowling

For someone that’s not active in real estate investing (by that I mean flips and brrr type Value add construction type things) the strategy your using is my favorite. I think I have a similar view of leverage as you basically the more long term fix low interest debt the better as long as you have proper reserves.

I  prescribe to a 3,000 year old investment  Philosophy that basically says divide your wealth in 3 even parts 1 part real estate 1 part business 1 part reserves.

I do this with my business being flipping and vacation rental management. Plus owning rentals. Plus reserves.

I also think that having reserves in a depreciating currency long term isn’t that smart play so I would maybe even hold reserves in something like gold and silver so you hedge your reserves against inflation.

As for your reserves I would say be conservative and go 100k plus. If you have 10% reserves and 90% leverage in my opinion your a lot better off that 82% leverage and 2% reserves.

@Scott Trench

I applaud the effort in making the list and honestly I will probably look at the results but like others have said you can’t really generalize whole markets like that. Even with generalizing that sounds super low to me even on single family. I think it would probably be more accurate to look at maybe the bottom third of prices as the top two thirds of properties in most markets are mostly owner occupied. Basically to me it sounds like you are saying that 4 cap is the best market in US. that sounds crazy to me even with a property manager. 4 cap in a non appreciating market is a go broke investment. Even if your paying the low rate of 4.25 for the loan!

Also are you using sold data or for sale because sold prices are often 10-20% less.

Are you considering secondary markets at all? In my experience secondary markets have much higher cash flow.

@David Hulit

I think every situation is a bit different but if I understand correctly you should be able to cash out total tax free because you lived there two of the last 5 years. I would personally sell and then use the cash to brrr more deals and leave a bit of a reserve.

1031 is great but honestly doesn’t work very well with Brrr.

If you want to be an active investor and max your money I would say sell at a good price get the tax free money and then going to get more.

Pulling out heloc to invest in would be a good option to. But that tax free forever money is not something to over look. It’s tax free forever.

@Tim Kaminski

It depends on the specific terms but normally a bank can freeze meaning not let you borrow any more even if they had agreed to more before.

There are a few reasons I can think of

1 bank reaching there loan max. There are rules on how much banks can loan and if they reach it and have lines of credit open they could cancel it.

2 The bank no longer thinks you are credit worthy

3 the market drops

Basically if the bank decided to they can. It’s not super common in good markets but it’s something to be aware of.

@Tim Kaminski

Keep in mind that if you have a heloc the bank can close it and not lend to you so make sure you know the rules on that and are protected. I would personally take the money.

If you are worried about over leveraging you can take the money and put aside say 10-20% and leave it in cash/ a 2% bank account with fdic guarantee and be able to us at any time. That would give you the proper contingency fund and the protected to be move aggressive on other deals. (Good brrr’s not bad deals)

If you are paying 4% for the money and take 50k and then put 10k in bank account and use 40k to get property the return the total return will be as strong as 5% on less only borrowing 40k but they bank can’t close the refi but they can close the line of credit.

I just had an investor that was going to lend me 100k from a heloc they had but the bank closed there line. I was able to figure it out and purchase the house I was in contract with but it has made me not consider heloc to be as good as a set refi plus it’s normally more expensive.

It could also be a good option depending on financing, points, interest, and interest only payments to get the heloc and just take it all at once. It can’t be closed if the money is out.

Lots of real estate people had heloc for reserves and lost it all because the heloc closed when the market crashed.

@Leo Padilla

Check out VA home loans

If you qualify it doesn't have PMI and you can get it for as low as 3.5% down.

@Nick Rutkowski

Im a Gen Z investor with over a million $ in current properties and counting

How easy to get started

I wouldn’t say it’s been easy but I would say it has been very doable. I got a great flip deal that really got me going. I have carried the momentum into a few more good deals.

Social media

I have used a little Facebook but honestly didn’t get much from it (I also only did a little with it not enough to expect much) I’m not a big social media guy personally.

If you count Airbnb as social media then I use a lot I have had over 200 bookings this year

Where young people are moving

I haven’t thought that much about where young people are moving. I think more about what people want and that’s nice things. So I provide nice renovations. In general young people move for more jobs and social opportunities plus everyone like good weather. (Good weather is different for different people)

What types of real estate are you interested in?

I have currently been doing flips and vacation rentals. Both are very involved but give better ROI in short term.

I think I originally thought of real estate as a potential passive thing. Now I think of each property as a business and it’s only passive if you can get someone else to run your business. The problem is it’s hard to get people that will run it as well as you making totally passive a challenge.

Storage units mobile homes and senior housing all seem interesting

The richest guy I know says storage units have been his best investment.

@Ola Dantis

I would be willing to bet that if they looked at the research they would find that  entrepreneur that started at a younger age have more overall success.

I would also bet that a high number of the successful “45 year old” entrepreneur had less successful or failed businesses in the decade or two before there big success.

 In life you should be getting better if your not something is WRONG so it stands to reason that older (assuming still have energy and drive) would be better

Also I’m a didn’t finish college straight into investing full time investing Gen Z (the one younger that millennials).

@LaVonna Shannon

Just be yourself, you sound genuine. In my experience you get from people what you expect. If you expect and treat this like a shrewd business deal he will also. If you are real and looking to grow but not for a handout you will be surprised by generosity. I would add the letter but keep it short. Remember guys with huge net worths have tons of people looking to suck up to them for money or even mentoring but few have people genuinely loving them for who they are. Remember first and foremost he is man that longs to be loved just like everyone else.