I mean, you're right when you say that residential RE isn't supposed to cash flow immediately. The best way to realistically generate cash flow off it is to put as much money down as possible and get that monthly payment down as much as you can, obviously. Otherwise, it's more of a long term investment that generates equity and appreciates over time. Great stuff!
I’ve got a question.. I just purchased my first investment property. The numbers look like this. ARV $135,000 Repairs $15,000 PP $75,000 It already had a tenant who is paying $1100 per month however the property management company told me we should easily get $1300 in a month when they are gone / new term. HOWEVER I paid cash for the property expecting to have the ability to turn around and refinance it and get at least the majority of my money back if not all of it. My intentions were to take out around 80% of the 135,000 valuation and give me enough extra capital to move on and invest in a couple more properties. However the lenders I’ve been talking to want to loan me a percentage of the amount of money I paid instead of a percentage of the amount of money the property is worth and I simply can’t find a way around this. I talked to local banks, Hard Money and even private firms and all seem to be saying the same thing. although if I wait six months apparently somehow that changes things and then they will look at the ARV but I’m trying to get my money back now to prepare to start buying in the new year. How do I get back a chunk of the ARV so I can reinvest?
I hope to see BP reply to this very good question. I am planning to do the same thing and pay cash on a BRRR, then finance my cash back out. But if that's not possible right now, then the options are wait for it to turn around?
I always look forward to “seeing green” episode. I like the format of having different personalities answering questions. This is a great episode. I learn a lot. Thanks
Agreed. The first year of starting your rental investment will not bring you the profit you've expected, doesn't mean you're doing it wrong just cause you see others have done it. You just have to be patient cause the market is changing, keep learning and taking action.
This was a great episode. I love every format you give, esp the Q&A when you bring people on to ask questions and you answer. I also enjoy your David Green Real Estate videos and live on Fridays. Thanks for being a good guy, you are my absolute favorite person on TH-cam.
For the first guy - instead of convincing his wife to let him buy ads vs doing the work himself, she could pitch in and distribute flyers herself! Then double the work output and be a stronger team
My problem is that I have great tenants that have stayed longer than I expected. I expected 2-3 years would be the norm, then I could make drastic rent changes if necessary. But property tax increases are brutal. I think we underestimate the greed of local governments here and just a couple months ago one of my home's escrow payment on it's mortgage jumped almost $200! The house barely cash flows anymore.
It may not cashflow, but you've still got principal paydown going in your favour. Just don't over-leverage. Have a huge buffer. During the next rate drop and home price surge, it'll work out.
So real. I think @Robuilt started it? His statement in one of bp episodes “cash flow helps quit the job but appreciation creates wealth” or something like that
@@copernicusvanstruselclit9508 Yeah. Cash flow is typically supposed to be POSITIVE. Having a loss or just cutting even ain't supposed to be the name of the game here.
David Greene you do a great job but I liked this format having other professional give advice as well. You did a great job following up afterwards with additional points. Thanks.
Thank u thank u thank u for this episode,I was afraid to watch this episodes because of what you were going to say, I also have few properties and they not cash flowing yet but have increased huge in capital growth,Im pushing forward and loving the process of being a landlord creating generational wealth for my kids.......thank you guys for all the great advise.
I have been doing rentals for 35 years ....I love when people buy stuff because they think its gonna be easy ..Better when they buy at the TOP of the market...
I had properties that cash flowed years 1-3...now in the past two years my taxes have gone up twice and utilities are also up.....the cash flow is much less. In the units i have great tenants...I don't want to raise the rent.
Hi David, Thank you for enlightening with RE investments. When you initially buy rehab property for BRRRR, do you buy under a LLC? After rehab, do you refinance loan as investment loan under same LLC? What’s the normal refinance loan term years you get from the banks? Do you invest with your partners or you invest solely or both? Also how many properties you normally hold under one LLC if you use LLC as the entity? What’s the best number of properties to hold under one LLC? Is better to do one property under one LLC ? What’s the rule of thumb?
With a conventional loan, most lenders won't let you buy under an LLC. It has be under your personal name. I think with DSCR loans you can get a loan under an LLC. Bigger Pockets has many posts about LLCs. One of the comments on BP is that most of time when a landlord is being sued it's for a egregious violation such as neglecting the property (e.g. slumlord) over a long period of time. If you're trying to have an LLC with anonymity, I think having a registered agent helps.I know someone with an LLC and I looked up one of his properties under county records and his name shows up not the LLC so that's not very anonymous, if his tenant or someone on the property tried to sue him they could access this public record. Having an LLC for each property sounds like a huge bookkeeping nightmare to me if I had 10 properties or more for example. I don't hold any of my 3 properties under an LLC. I purchased additional umbrella insurance. My other investor friends who own 1 to 4 properties don't have LLCs. The only investor I know with LLCs has 11 properties (the one where I looked up the property and saw his name). The whole LLC process is confusing to me so that's why I haven't rushed into getting one
I bought a house that has a septic tank and it is on my neighbors property. I bought this house back in March and they moved in next door 2 months ago. My house was built in 65 and there house was built in 74. There septic tank is in there back yard. Can I do anything to keep my septic tank from them destroying it. My yard is to small to put another septic tank in.
I feel frustrated because when I was researching about airbnb business, everyone was selling it like it was a no brainer and I should start NOW and I just closed on my first investments property and as soon as I started, every single channel switched content to "airbnb struggling" kind of content. I'm so scared!! Everywhere I looked, occupancy in my area was 80-85% average. Some properties I saw had documents showing 100% occupancy and now everything changed and occupancy in the area is 65% how did that change in a month?😱 (as soon as I signed) and night prices plummeted and I'm competing with comparable listing now going for half. I just got in and it's already killing me. Did I make the biggest mistake of my life?
This video was perfect timing for me. I am in the process of buying not just my first property but my first investment property at that. My income is very high. So my focus right now is to buy a "good" property and I dont care if it actually makes a profit right out of the gate. I figured so long as 70 to 75% of the cost was covered through rental income I am fine. I am perfectly capable of covering all costs if need be. So long as the principle is being paid down and I am building equity.
Is it a correct hope that I can buy a house now at a higher rate and refinance in a few years once the value has increased and rates have come down? I wouldn’t use this to calculate a deal, but I’m looking for some extra motivation to get myself in the game, and that hope could be like a light at the end of the scary tunnel of buying my first property amidst all this uncertainty.
Love it, you gave me another way to make these rentals work. I can just adjust the offers to make the numbers work, if they dont want that offer then move on to the next one. Some day I will find one that works. Thank you (gold)
You did nothing wrong??? When an investor buys a property at the top of the biggest real estate bubble in US history then I would say they did something wrong. I anticipate investor fire sales as rental rates go down. It's already started.....
You can't have an increase of 40 percent in two years and expect there not to be a crash. I expect 40 to 60 percent decreases in 80 percent of the US housing market. What's kind of sad is how very few of the new investors even know that real estate has boom and bust cycles.
Hey BP. You guys are the best & I love the content. Thank you for all that you do. Will we see any discounts (black Friday or cyber Monday) for the BP PRO package? 😎
At the 7 minute mark you said that you know if you bought a turnkey property that it wouldn’t perform super great out the gate. Why wouldn’t it perform well? I’m wanting to buy my first property in 2023, but I want it to be a triplex or quadplex. Then my thought process was to build a triplex or quadplex…would that not perform well as opposed to buying an existing quadplex?
It's simple! Create a profile with a company name and logo, advertise using that profile and be anonymous. I would say you're doing a while lot better than I. List my shirt this year sold off the house now starting a new. You need to take some time to think creatively, frequently.
😂 like the Batman voiceover! What method do you use to evaluate the home value now (for small multifamily) so now an appraisal can’t be trusted anymore because the market changes so quickly and also the money supply issue you mentioned?
The key to navigating a housing market crash is having a good strategy in place. During the 2008 housing market crash, realtors and real estate investors who embraced innovative marketing strategies with a good Financial consultant grew their businesses even while the overall market declined.*
Investing is akin to sowing a seed. There is one season for planting and another for cultivation. You plant a seed when you invest, you'll be smiling to the bank when it comes to cultivation time. Today boost your net wort by investing with the right knowledge and financial consultant... *
Hey guys love the channel but the past few weeks have been 80% shill content. Please stop, people aren’t dumb. We don’t need a “quick tip” to buy your book 😂 also please pick comments that ask more meaningful questions, not just the brown noses.
I mean, you're right when you say that residential RE isn't supposed to cash flow immediately. The best way to realistically generate cash flow off it is to put as much money down as possible and get that monthly payment down as much as you can, obviously. Otherwise, it's more of a long term investment that generates equity and appreciates over time. Great stuff!
I’ve got a question..
I just purchased my first investment property. The numbers look like this.
ARV $135,000
Repairs $15,000
PP $75,000
It already had a tenant who is paying $1100 per month however the property management company told me we should easily get $1300 in a month when they are gone / new term.
HOWEVER
I paid cash for the property expecting to have the ability to turn around and refinance it and get at least the majority of my money back if not all of it. My intentions were to take out around 80% of the 135,000 valuation and give me enough extra capital to move on and invest in a couple more properties. However the lenders I’ve been talking to want to loan me a percentage of the amount of money I paid instead of a percentage of the amount of money the property is worth and I simply can’t find a way around this. I talked to local banks, Hard Money and even private firms and all seem to be saying the same thing. although if I wait six months apparently somehow that changes things and then they will look at the ARV but I’m trying to get my money back now to prepare to start buying in the new year.
How do I get back a chunk of the ARV so I can reinvest?
I hope to see BP reply to this very good question. I am planning to do the same thing and pay cash on a BRRR, then finance my cash back out. But if that's not possible right now, then the options are wait for it to turn around?
I’m interested in the answer to this quandary.
I always look forward to “seeing green” episode. I like the format of having different personalities answering questions. This is a great episode. I learn a lot. Thanks
Agreed. The first year of starting your rental investment will not bring you the profit you've expected, doesn't mean you're doing it wrong just cause you see others have done it. You just have to be patient cause the market is changing, keep learning and taking action.
That was a great reminder. I'm in year two. And it can get frustrating if you don't concentrate on the big picture.
This was a great episode. I love every format you give, esp the Q&A when you bring people on to ask questions and you answer. I also enjoy your David Green Real Estate videos and live on Fridays. Thanks for being a good guy, you are my absolute favorite person on TH-cam.
For the first guy - instead of convincing his wife to let him buy ads vs doing the work himself, she could pitch in and distribute flyers herself! Then double the work output and be a stronger team
My problem is that I have great tenants that have stayed longer than I expected. I expected 2-3 years would be the norm, then I could make drastic rent changes if necessary. But property tax increases are brutal. I think we underestimate the greed of local governments here and just a couple months ago one of my home's escrow payment on it's mortgage jumped almost $200! The house barely cash flows anymore.
It may not cashflow, but you've still got principal paydown going in your favour. Just don't over-leverage. Have a huge buffer. During the next rate drop and home price surge, it'll work out.
3 years prior of bigger pockets: cash flow is king!
Nowadays bigger pockets: it’s not about cash flow…
🤣 🤣🤣🤣
Lol, so true
So real. I think @Robuilt started it? His statement in one of bp episodes “cash flow helps quit the job but appreciation creates wealth” or something like that
@@copernicusvanstruselclit9508 Yeah. Cash flow is typically supposed to be POSITIVE. Having a loss or just cutting even ain't supposed to be the name of the game here.
Love the different expert contributors answering different questions. Very engaging approach to the podcast!!
Less fluff more facts for me. You guys do a good job, love the content!
David Greene you do a great job but I liked this format having other professional give advice as well. You did a great job following up afterwards with additional points. Thanks.
Thank u thank u thank u for this episode,I was afraid to watch this episodes because of what you were going to say, I also have few properties and they not cash flowing yet but have increased huge in capital growth,Im pushing forward and loving the process of being a landlord creating generational wealth for my kids.......thank you guys for all the great advise.
I have been doing rentals for 35 years ....I love when people buy stuff because they think its gonna be easy ..Better when they buy at the TOP of the market...
" how can I convince my wife?".....
Buddy that's a whole different podcast! Lol
Honestly, if you're managing your own business I don't get why you'd be such a pushover when your wife says that she doesn't want money put into it.
I had properties that cash flowed years 1-3...now in the past two years my taxes have gone up twice and utilities are also up.....the cash flow is much less. In the units i have great tenants...I don't want to raise the rent.
A lot of landlords fail by not raising rents.
Have you considered the binder strategy? Tenants ask for the increase and then thank you.
@@DionTalkFinancialFreedom what is the binder strategy?
So true.
A few years in the e cash flow becomes the problem.
“What do I do with all this money”
Sounds sarcastic but it’s an actual problem.
Thank you, Batman.
This was very insightful!
Batman had me rolling bro 😂😂
Hi David,
Thank you for enlightening with RE investments.
When you initially buy rehab property for BRRRR, do you buy under a LLC? After rehab, do you refinance loan as investment loan under same LLC? What’s the normal refinance loan term years you get from the banks? Do you invest with your partners or you invest solely or both? Also how many properties you normally hold under one LLC if you use LLC as the entity? What’s the best number of properties to hold under one LLC? Is better to do one property under one LLC ? What’s the rule of thumb?
With a conventional loan, most lenders won't let you buy under an LLC. It has be under your personal name. I think with DSCR loans you can get a loan under an LLC. Bigger Pockets has many posts about LLCs. One of the comments on BP is that most of time when a landlord is being sued it's for a egregious violation such as neglecting the property (e.g. slumlord) over a long period of time. If you're trying to have an LLC with anonymity, I think having a registered agent helps.I know someone with an LLC and I looked up one of his properties under county records and his name shows up not the LLC so that's not very anonymous, if his tenant or someone on the property tried to sue him they could access this public record. Having an LLC for each property sounds like a huge bookkeeping nightmare to me if I had 10 properties or more for example. I don't hold any of my 3 properties under an LLC. I purchased additional umbrella insurance. My other investor friends who own 1 to 4 properties don't have LLCs. The only investor I know with LLCs has 11 properties (the one where I looked up the property and saw his name). The whole LLC process is confusing to me so that's why I haven't rushed into getting one
I bought a house that has a septic tank and it is on my neighbors property. I bought this house back in March and they moved in next door 2 months ago. My house was built in 65 and there house was built in 74. There septic tank is in there back yard. Can I do anything to keep my septic tank from them destroying it. My yard is to small to put another septic tank in.
I enjoyed the format.
I feel frustrated because when I was researching about airbnb business, everyone was selling it like it was a no brainer and I should start NOW and I just closed on my first investments property and as soon as I started, every single channel switched content to "airbnb struggling" kind of content. I'm so scared!! Everywhere I looked, occupancy in my area was 80-85% average. Some properties I saw had documents showing 100% occupancy and now everything changed and occupancy in the area is 65% how did that change in a month?😱 (as soon as I signed) and night prices plummeted and I'm competing with comparable listing now going for half. I just got in and it's already killing me. Did I make the biggest mistake of my life?
This video was perfect timing for me. I am in the process of buying not just my first property but my first investment property at that. My income is very high. So my focus right now is to buy a "good" property and I dont care if it actually makes a profit right out of the gate. I figured so long as 70 to 75% of the cost was covered through rental income I am fine. I am perfectly capable of covering all costs if need be. So long as the principle is being paid down and I am building equity.
Ok, yes. More Batman impressions. Good touch of levity.
That was hilarious!
I liked this new format!
David , why haven’t u gotten into the commercial space /apartments? Pros/cons
Lending.
Fixed rate debt is amazing.
Batman killed me 🤣 but the information was valuable and simply stated 👌🏾
Is it a correct hope that I can buy a house now at a higher rate and refinance in a few years once the value has increased and rates have come down? I wouldn’t use this to calculate a deal, but I’m looking for some extra motivation to get myself in the game, and that hope could be like a light at the end of the scary tunnel of buying my first property amidst all this uncertainty.
Anxiety is real but what they say focus on the long term and buckle up along the way
3 years later and my pockets are drained. OMG!!!!! It’s getting ruff. Waiting to see the green
This was a great episode!
Loved this. Saved to favorites
The bar has been raised in this video. I expect to hear more commentary from special guest star, Batman.
I like the mix up. Thank you
Enjoyed the format!
Love it, you gave me another way to make these rentals work. I can just adjust the offers to make the numbers work, if they dont want that offer then move on to the next one. Some day I will find one that works. Thank you (gold)
You did nothing wrong??? When an investor buys a property at the top of the biggest real estate bubble in US history then I would say they did something wrong. I anticipate investor fire sales as rental rates go down. It's already started.....
You can't have an increase of 40 percent in two years and expect there not to be a crash. I expect 40 to 60 percent decreases in 80 percent of the US housing market. What's kind of sad is how very few of the new investors even know that real estate has boom and bust cycles.
@@sterlingpaul3004 man I'm starting to realize how much I despise living in America
@@Hkouggbmha Umm, you do? Why?
Hey BP. You guys are the best & I love the content. Thank you for all that you do. Will we see any discounts (black Friday or cyber Monday) for the BP PRO package? 😎
At the 7 minute mark you said that you know if you bought a turnkey property that it wouldn’t perform super great out the gate. Why wouldn’t it perform well? I’m wanting to buy my first property in 2023, but I want it to be a triplex or quadplex. Then my thought process was to build a triplex or quadplex…would that not perform well as opposed to buying an existing quadplex?
The cost on new building very high permits,labor materials, compared with something built several years ago
According to Wikipedia, it is pronounced Gurnville, not Gurneyville. But, yes, Brandon was incorrect. Great program, per usual.
It's simple! Create a profile with a company name and logo, advertise using that profile and be anonymous. I would say you're doing a while lot better than I. List my shirt this year sold off the house now starting a new.
You need to take some time to think creatively, frequently.
Hello David Green
How can I get to receive my book in East Africa(Uganda), if I purchase it from bigger pockets. Thanks
love the facts... having other experienced people works too!
😂 like the Batman voiceover! What method do you use to evaluate the home value now (for small multifamily) so now an appraisal can’t be trusted anymore because the market changes so quickly and also the money supply issue you mentioned?
Loved it!
Will doing a cost segregation trigger an IRS AUDIT?
Lol! Batman has spoken!
He could make a business page on facebook, where it's not attached to his personal identity.
Good show.
We do miss you Brandon
Think first guy , should just keep buying good deals .. whatever space it’s in
If they can hold out for ten to fifteen years should return to break even.
“It’s hard for me to understand your perspective bc im not married”
Struggle of life lol
This guy went from working two jobs and having no time to only working a part time job with plenty of time. All in the same interview.
😂my thought exactly.
Batman knows his economics!
Lol fun episode
Batman came in clutch
Fun fact: Guerneville is pronounced Gurn-vil
In for the long play. More🥦please 😁
The key to navigating a housing market crash is having a good strategy in place. During the 2008 housing market crash, realtors and real estate investors who embraced innovative marketing strategies with a good Financial consultant grew their businesses even while the overall market declined.*
Investing is akin to sowing a seed. There is one season for planting and another for cultivation. You plant a seed when you invest, you'll be smiling to the bank when it comes to cultivation time. Today boost your net wort by investing with the right knowledge and financial consultant... *
Just david and batman
Hey guys love the channel but the past few weeks have been 80% shill content. Please stop, people aren’t dumb. We don’t need a “quick tip” to buy your book 😂 also please pick comments that ask more meaningful questions, not just the brown noses.
W Manipulation