All Forum Posts by: Account Closed

I'd be interested to hear from someone who has a vavation rental out west. There has to be someone who is cash flowing well with a CO vaca rental near a mountain despite the off season. 

@Elizabeth Colegrove, thanks for the post!

Thanks for mapping it out like that. Side note, I grew up in Green on portage lakes. Small world.

As for real estate savvy CPA, I wonder how much of a difference a non real estate savvy CPA is vs one who is. My aunt is my CPA, but I'm not sure how much other real estate work she does. 

In!

Question for the BP world.

I am actively looking for my second property to get into and have found a 4-family that would work out very nicely. I'm currently planning to go owner occupied on FHA 3.5% down.

I've been in my first duplex for over a year now (as owner occupied 30 year conventional financing) and believe I've created a significant amount of equity in the home since I've been here.

My question is, should I try and pull out the equity now since I'm still owner occupied and use it for the next couple of rental property purchases, or should I move out of the place now, and go with the FHA loan on the next 4-family?

The reason I'm thinking about pulling out the equity now instead of later, is simply because I'm owner occupied. How big of a difference will it make 2-5 years down the road if I wait to pull out the equity? If I want to pull out the equity, are there conditions that I will have to stay in the current property for 6-12 months? If I have the capital for an FHA loan now, does it make more sense to go FHA on property #2 and get out of property #1, cash flow on property #1 and #2 while I'm owner occupied in property #2, and then use that cash flow for another down payment? Or would I be able to use more leverage by refinancing property #1 now since I'm owner occupied?

THANKS!

Thanks to all for the awesome insight, and thanks for the direction to head to Brandon's 7 years to 7 figures. I've glimpsed it so far and it looks like a great source and also the numbers at glance look legit and realistic. Thanks again for the feedback and keep em comin'! I think large unit apartment complexes are for sure a great strategy and path to take long term. Just glancing at some of the 10-12 units in my area and the gross rental income, the returns are so much nicer than these 2-4 fams I've been running in my excel tool I created. Why have 10 2-4 unit properties that cash flow the same as one single larger apartment complex? Why worry about 10 roofs when you can only have one to worry about that will provide you the same return? Some big roadblocks are obviously experience and knowledge. Nobody (well I'm sure people have done it) would want to get into the game on a 10+ unit apartment complex as their first investment. But the returns on them make so much more sense from a cash flow standpoint. I think the other big point im learning early on here is to utilize creative financing. This is one aspect I have not done a whole lot of research on yet. What other advice do you have for a mid 20's YP trying to reach $100,000/year cash flow?

As with most of us investors, one of our big milestones would be to reach a passive income cash flow of a cool $100,000 a year. Only being on my first duplex and on the close verge of purchasing my next 2-4 unit MF, I'm wondering the timeframe of this goal is. What are some unforeseen challenges, road blocks, and obstacles a newer investor can't see as their starting up that will get in the way of this goal? It seems to me as long as you can put yourself into properties that can cash flow ~$10,000/year and acquire ten of them, you'll be at your ultimate goal. I understand that $10k/year deals are not easy to find. A typical time frame/strategy would be the following: -1 property / year over the next 10 years -minimum cash flow $10k/year -finance each property with as low of down payment as possible, leverage as much as possible From listening to hundreds of podcasts now and reading lots, I'm gathering that most people are not in properties that cash flow $10k/year. More so, it seems that a typical investment property, let's use duplex as an example, would cash flow only $300/mnth, or $3600/year. With this logic, you'd need around 27 duplexes to make this happen. Is it unrealistic to use the $10k/year cash flow logic with 10 total houses, or has this worked for people? How did you get to your $100,000/year cash flow?

Hello BP World My question to the experienced investors has to do with creating equity in a property (let's use small MF's for this example) by the following: 1. Purchase property at "X" price. 2. Bring rents to market value, equating to more than double the rent when bought the property along with some upgrading. Turn the 1 bed unit into a 2 bed unit, re landscape, remodel, etc.. 3. Get the home re-appraised and pull out the equity to use for another down payment on another small Multifam. My question is, when appraising an investment property, how much does the appraiser look at the rental income? Is this the appraisers first and foremost criteria to base their judgement and comps on the property to value it? Basically, I'm trying to get an idea of how much I could expect the property to appraise for. If I brought the cap rate from a terrible 2-3% up to a whopping 12%, how much value was really added? If I back calculate what the sale price of the home would be to create an 8% cap rate at the current rental income, is this a fair estimate ballpark of what the house could appraise for? Or do appraisers look more at the fact it's just a 2 bed 1 bath duplex and base the value off other duplexes in the area that sold recently with 2 bed 1 bath duplex around the same square footage ? Many thanks for helping out a new investor.