T Nation

Any Real Estate Investors in the House?


#1

I remember one poster, only I cant remember who(ddmadox?), had mentioned they do this for a living and even referred me to a mentorship program but I cant for the life of me find the post so I figured I would start another one.

Background, will be turning 27 next month and from a financial standpoint I have built a baseline foundation firt. Have zero CC debt, own my home and have 15-20k equity in it. Sitting on enough cash to live off of for 4-7 months and my student loans will be gone by years end. Been maxing out my 401k since I was about 22 and have close to 30k in there. I live off of under 70% and use the other 30 to save/invest/pay off long term debt.

While right now I make good money(low 6 fig), I have a good 1-3 years window here with my comp plan to make a nice windfall at year end and I wanted to now start getting into real estate with that money. I do not want to work in the traditional sense by 30 and want to use real estate as my cash flow in order to free me up to explore entrepreneurship.

Giving myself the rest of the year to stash away some extra funds to pool in with my payout and make the leap into my first rental property. Are there any other members on here that invest in real estate and can point out some good educational material(books/audiobooks etc), mentorship programs etc?


#2

That is who I work for, and yes I buy Rental Real Estate.

Your finances look really good and in shape. Learn how first then go get you one. Full Disclosure I work for the company I linked. I also did what they teach and retired myself using rental real estate, but went back to work so I could give back. I only work part time so I still have a life.


#3

[quote]dmaddox wrote:

That is who I work for, and yes I buy Rental Real Estate.

Your finances look really good and in shape. Learn how first then go get you one. Full Disclosure I work for the company I linked. I also did what they teach and retired myself using rental real estate, but went back to work so I could give back. I only work part time so I still have a life.[/quote]

You work for a condom company?


#4

[quote]Waittz wrote:
I remember one poster, only I cant remember who(ddmadox?), had mentioned they do this for a living and even referred me to a mentorship program but I cant for the life of me find the post so I figured I would start another one.

Background, will be turning 27 next month and from a financial standpoint I have built a baseline foundation firt. Have zero CC debt, own my home and have 15-20k equity in it. Sitting on enough cash to live off of for 4-7 months and my student loans will be gone by years end. Been maxing out my 401k since I was about 22 and have close to 30k in there. I live off of under 70% and use the other 30 to save/invest/pay off long term debt.

While right now I make good money(low 6 fig), I have a good 1-3 years window here with my comp plan to make a nice windfall at year end and I wanted to now start getting into real estate with that money. I do not want to work in the traditional sense by 30 and want to use real estate as my cash flow in order to free me up to explore entrepreneurship.

Giving myself the rest of the year to stash away some extra funds to pool in with my payout and make the leap into my first rental property. Are there any other members on here that invest in real estate and can point out some good educational material(books/audiobooks etc), mentorship programs etc? [/quote]

I’ve been doing the whole small-scale rental thing for a long time. I just bought empty condos in the unit where I have a house in NYC — basically no obligation for the upkeep, as that is all part of the condo association. I slowly ended up owning 1/2 the building.

Unless you are rather handy to fix all the crap that breaks all the time, that’s the best first step.


#5

[quote]LankyMofo wrote:

[quote]dmaddox wrote:

That is who I work for, and yes I buy Rental Real Estate.

Your finances look really good and in shape. Learn how first then go get you one. Full Disclosure I work for the company I linked. I also did what they teach and retired myself using rental real estate, but went back to work so I could give back. I only work part time so I still have a life.[/quote]

You work for a condom company?[/quote]

Make sure to put Unlimited after because it will take you to a condom website. My wife said the exact same thing you did when I joined as a member.

It is a running joke around here. We have a blast up here. We have 2 kegs, and wine up here all the time.


#6

[quote]Jewbacca wrote:

Unless you are rather handy to fix all the crap that breaks all the time, that’s the best first step.[/quote]

I disagree. I have never fixed anything on several of my properties. I prefer to take a phone call and then get someone else to go take care of the issue, and then I just write a check.


#7

[quote]dmaddox wrote:

That is who I work for, and yes I buy Rental Real Estate.

Your finances look really good and in shape. Learn how first then go get you one. Full Disclosure I work for the company I linked. I also did what they teach and retired myself using rental real estate, but went back to work so I could give back. I only work part time so I still have a life.[/quote]

Knew it was you! Hah thanks again.

Yeah, the plan is right now to educate myself fully and start small and local with condos. Have my first 4 books on the subject on the way and my real estate agent i used for my house has a few clients who she sevices just for rentals so I am going to meet with her soon just to get some ideas on lending practices etc.


#8

[quote]Waittz wrote:

[quote]dmaddox wrote:

That is who I work for, and yes I buy Rental Real Estate.

Your finances look really good and in shape. Learn how first then go get you one. Full Disclosure I work for the company I linked. I also did what they teach and retired myself using rental real estate, but went back to work so I could give back. I only work part time so I still have a life.[/quote]

Knew it was you! Hah thanks again.

Yeah, the plan is right now to educate myself fully and start small and local with condos. Have my first 4 books on the subject on the way and my real estate agent i used for my house has a few clients who she sevices just for rentals so I am going to meet with her soon just to get some ideas on lending practices etc.

[/quote]

I am not a fan of condos for rental properties. You only own the paint inward so really all you own is air.

JewBacca owning more than 50% has a leg up because he controls the condo association, so they can not do anything without his permission. I owned a condo, and the association fee went from $150 a month to $350 a month in one year. You also could get hit with an assessment like my mother did on her condo for $6,000. Also her monthly maint fee went up $100 a month.

The only rental property the founder of my company has ever lost money on is a Condo. You want that type of property like a condo buy an apartment complex.


#9

I need to take that class. I recently purchased a house for my daughter to live in while she attends college, and I had every intention of flipping it when she graduated. But the possible cash flow I would have as a rental has me rethinking.

I would love to own 100 rental units over the next 5-10 years.


#10

[quote]drunkpig wrote:
I need to take that class. I recently purchased a house for my daughter to live in while she attends college, and I had every intention of flipping it when she graduated. But the possible cash flow I would have as a rental has me rethinking.

I would love to own 100 rental units over the next 5-10 years. [/quote]

I love the monthly cashflow. Once you have enough cashflow to meet or exceed you bills you are retired. You work because you want to not because you have to.

My goal is 120k in annual cashflow that would retire my wife. That will happen in the next 5 years.


#11

[quote]dmaddox wrote:

I love the monthly cashflow. Once you have enough cashflow to meet or exceed you bills you are retired. You work because you want to not because you have to.

My goal is 120k in annual cashflow that would retire my wife. That will happen in the next 5 years.[/quote]

How much positive net cash flow, as a percentage of total positive cash flow, should one expect on a rental property?

For example, I just paid 48K for my daughter’s house. I can reasonably expect to rent it out for $650/month. Debt service, taxes, insurance, etc. will run around $450/month. So, I’m expecting to see a net positive cash flow of around $200/month, or around 30%.


#12

[quote]dmaddox wrote:

[quote]Waittz wrote:

[quote]dmaddox wrote:

That is who I work for, and yes I buy Rental Real Estate.

Your finances look really good and in shape. Learn how first then go get you one. Full Disclosure I work for the company I linked. I also did what they teach and retired myself using rental real estate, but went back to work so I could give back. I only work part time so I still have a life.[/quote]

Knew it was you! Hah thanks again.

Yeah, the plan is right now to educate myself fully and start small and local with condos. Have my first 4 books on the subject on the way and my real estate agent i used for my house has a few clients who she sevices just for rentals so I am going to meet with her soon just to get some ideas on lending practices etc.

[/quote]

I am not a fan of condos for rental properties. You only own the paint inward so really all you own is air.

JewBacca owning more than 50% has a leg up because he controls the condo association, so they can not do anything without his permission. I owned a condo, and the association fee went from $150 a month to $350 a month in one year. You also could get hit with an assessment like my mother did on her condo for $6,000. Also her monthly maint fee went up $100 a month.

The only rental property the founder of my company has ever lost money on is a Condo. You want that type of property like a condo buy an apartment complex.[/quote]

That is some solid information, thanks.


#13

[quote]drunkpig wrote:

[quote]dmaddox wrote:

I love the monthly cashflow. Once you have enough cashflow to meet or exceed you bills you are retired. You work because you want to not because you have to.

My goal is 120k in annual cashflow that would retire my wife. That will happen in the next 5 years.[/quote]

How much positive net cash flow, as a percentage of total positive cash flow, should one expect on a rental property?

For example, I just paid 48K for my daughter’s house. I can reasonably expect to rent it out for $650/month. Debt service, taxes, insurance, etc. will run around $450/month. So, I’m expecting to see a net positive cash flow of around $200/month, or around 30%.
[/quote]

That is not bad. I like 20+%. I am averaging about 40% on all of my properties. I also have Equity Capture of about $250,000. Every year I get about $5,000 in principle paydown, and I get tax incentives (depreciation and expenses) of about $10-20k. All added up is I am doing really well. An apartment complex is next.


#14

[quote]dmaddox wrote:

[quote]drunkpig wrote:

[quote]dmaddox wrote:

I love the monthly cashflow. Once you have enough cashflow to meet or exceed you bills you are retired. You work because you want to not because you have to.

My goal is 120k in annual cashflow that would retire my wife. That will happen in the next 5 years.[/quote]

How much positive net cash flow, as a percentage of total positive cash flow, should one expect on a rental property?

For example, I just paid 48K for my daughter’s house. I can reasonably expect to rent it out for $650/month. Debt service, taxes, insurance, etc. will run around $450/month. So, I’m expecting to see a net positive cash flow of around $200/month, or around 30%.
[/quote]

That is not bad. I like 20+%. I am averaging about 40% on all of my properties. I also have Equity Capture of about $250,000. Every year I get about $5,000 in principle paydown, and I get tax incentives (depreciation and expenses) of about $10-20k. All added up is I am doing really well. An apartment complex is next.
[/quote]

How did you get started? Was your first investment profitable or did you have to learn along the way?


#15

[quote]Waittz wrote:

[quote]dmaddox wrote:

That is who I work for, and yes I buy Rental Real Estate.

Your finances look really good and in shape. Learn how first then go get you one. Full Disclosure I work for the company I linked. I also did what they teach and retired myself using rental real estate, but went back to work so I could give back. I only work part time so I still have a life.[/quote]

Knew it was you! Hah thanks again.

Yeah, the plan is right now to educate myself fully and start small and local with condos. Have my first 4 books on the subject on the way and my real estate agent i used for my house has a few clients who she sevices just for rentals so I am going to meet with her soon just to get some ideas on lending practices etc.

[/quote]

What books are you reading?


#16

[quote]Waittz wrote:

[quote]dmaddox wrote:

[quote]drunkpig wrote:

[quote]dmaddox wrote:

I love the monthly cashflow. Once you have enough cashflow to meet or exceed you bills you are retired. You work because you want to not because you have to.

My goal is 120k in annual cashflow that would retire my wife. That will happen in the next 5 years.[/quote]

How much positive net cash flow, as a percentage of total positive cash flow, should one expect on a rental property?

For example, I just paid 48K for my daughter’s house. I can reasonably expect to rent it out for $650/month. Debt service, taxes, insurance, etc. will run around $450/month. So, I’m expecting to see a net positive cash flow of around $200/month, or around 30%.
[/quote]

That is not bad. I like 20+%. I am averaging about 40% on all of my properties. I also have Equity Capture of about $250,000. Every year I get about $5,000 in principle paydown, and I get tax incentives (depreciation and expenses) of about $10-20k. All added up is I am doing really well. An apartment complex is next.
[/quote]

How did you get started? Was your first investment profitable or did you have to learn along the way? [/quote]

My first rental was the first house my wife and I ever purchased and lived in. We lived in it for 4 years and then turned it into a rental and still own it 8 years later. I did a cash out refi on this property in Oct 2010 to get $25k seed money. I then purchased my next 6 houses from December 2010 to March 2012. 2 days before closing on the first of 6 properties I was laid off from my job. My lender told me to go on ahead and buy the property. Got it renovated and leased, and my lender told me to go buy another one. I used the $25k and my unemployment benefits to purchase the next 6 properties and the rest is history. All houses are on a 30 yr fixed rate mortgage.

I am thinking of selling the houses next year to go buy my second apartment complex.

I have done a couple of flips but go lucky that I did not loose any money. I did not make any money but I got experience and knowledge from those endevours. I like rentals, and I have never lost money on them. It is a numbers game to me. It has to make money and not loose money.


#17

[quote]dmaddox wrote:

[quote]Waittz wrote:

[quote]dmaddox wrote:

[quote]drunkpig wrote:

[quote]dmaddox wrote:

I love the monthly cashflow. Once you have enough cashflow to meet or exceed you bills you are retired. You work because you want to not because you have to.

My goal is 120k in annual cashflow that would retire my wife. That will happen in the next 5 years.[/quote]

How much positive net cash flow, as a percentage of total positive cash flow, should one expect on a rental property?

For example, I just paid 48K for my daughter’s house. I can reasonably expect to rent it out for $650/month. Debt service, taxes, insurance, etc. will run around $450/month. So, I’m expecting to see a net positive cash flow of around $200/month, or around 30%.
[/quote]

That is not bad. I like 20+%. I am averaging about 40% on all of my properties. I also have Equity Capture of about $250,000. Every year I get about $5,000 in principle paydown, and I get tax incentives (depreciation and expenses) of about $10-20k. All added up is I am doing really well. An apartment complex is next.
[/quote]

How did you get started? Was your first investment profitable or did you have to learn along the way? [/quote]

My first rental was the first house my wife and I ever purchased and lived in. We lived in it for 4 years and then turned it into a rental and still own it 8 years later. I did a cash out refi on this property in Oct 2010 to get $25k seed money. I then purchased my next 6 houses from December 2010 to March 2012. 2 days before closing on the first of 6 properties I was laid off from my job. My lender told me to go on ahead and buy the property. Got it renovated and leased, and my lender told me to go buy another one. I used the $25k and my unemployment benefits to purchase the next 6 properties and the rest is history. All houses are on a 30 yr fixed rate mortgage.

I am thinking of selling the houses next year to go buy my second apartment complex.

I have done a couple of flips but go lucky that I did not loose any money. I did not make any money but I got experience and knowledge from those endevours. I like rentals, and I have never lost money on them. It is a numbers game to me. It has to make money and not loose money.[/quote]

very appreciative for you sharing this info. I bought the house I am living in now mainly to turn it into a rental when the time is right. I was young, the market was crash and I just got my first real bonus so I figured I should grab it now when most of my friends are still renting and a few years down the road I will have equity and can start renting it or pull the equity to start financing a rental.

I first got the notion when I got hooked on the Rich Dad series of books and wanted to start increasing my cashflow, which is why i never thought about flipping, always wanted rentals for the cash flow and let the renters pay down the mortage and build up the equity to eventually sell all consolodate and move into bigger stakes with apartments/commericial etc and repeat the cycle. Just figure if I do not start now either educating myself and making action steps it will stay on the back burner.


#18

[quote]Steel Nation wrote:

[quote]Waittz wrote:

[quote]dmaddox wrote:

That is who I work for, and yes I buy Rental Real Estate.

Your finances look really good and in shape. Learn how first then go get you one. Full Disclosure I work for the company I linked. I also did what they teach and retired myself using rental real estate, but went back to work so I could give back. I only work part time so I still have a life.[/quote]

Knew it was you! Hah thanks again.

Yeah, the plan is right now to educate myself fully and start small and local with condos. Have my first 4 books on the subject on the way and my real estate agent i used for my house has a few clients who she sevices just for rentals so I am going to meet with her soon just to get some ideas on lending practices etc.

[/quote]

What books are you reading?[/quote]

Wall Street Journal Complete Real Estate Investing Guide
Buy it, Rent it, Profit
The ABCs of Real Estate Investing(Rich dad series)
Advanced Guide to Real Estate Investing(Rich dad series)

Open to any other recommendations!


#19

[quote]Waittz wrote:

I first got the notion when I got hooked on the Rich Dad series of books and wanted to start increasing my cashflow, which is why i never thought about flipping, always wanted rentals for the cash flow and let the renters pay down the mortage and build up the equity to eventually sell all consolodate and move into bigger stakes with apartments/commericial etc and repeat the cycle. Just figure if I do not start now either educating myself and making action steps it will stay on the back burner. [/quote]

I like Kiyosaki’s books, but his program is WAY TOO expensive for what you get $40k I have heard. We have people all the time come into our offices after going to his boot camp and wondered why they did not sign up with us first because Lifestyles Unlimited gave everything and more for $500.

I am not trying to sell you guys on my company’s program, so if I am coming across as such please let me know and I will stop. I am just passionate about rental real estate and wanting people to get educated for a reasonable price.

I will say there are no new secretes in real estate so if anyone tells you there is they are trying to sell you something. You can learn everything you need from books at the public library for FREE.


#20

I have been looking at rental real estate for the last 7 years. I have two very profitable businesses right now which allow me more free time than I deserve, but the prom won’t last forever, and I would love to have a cash flow equivalent to that of one business as an insurance policy against getting left high and dry should said business go belly up.

You are saying you purchased 6 homes over a 2 year period with 25K seed money, correct? Is it reasonable to assume that someone with 100K seed money could have 24 homes in the same time frame?

Geez, DM - this thread just kicked my ADD/OCD into high gear.

Thank you, OP, for starting this thread.