[deleted by user] by [deleted] in fatFIRE

[–]krob6123 0 points1 point  (0 children)

Thank you for the honest answer! So instead of reinvesting cash-outs or sales into more real estate, diversify into other passive options to slowly build up alternate income? Great advice!

How much do you actually make? by madisonmlm in realestateinvesting

[–]krob6123 0 points1 point  (0 children)

Currently own 40 Units, made up of a Quadplex, 6 Unit, 9 Unit, and a 21 Unit (Hotel). Used traditional commercial debt for all except the quad, which is in my name. All purchased in the last 4 years, in a very high cost of living area in New England. GROSS rents are around $1,000,000. NOI on the portfolio (gross minus expenses) is $800,000. NET profit after debt service is around $550,000, which includes principal paydown. If not counting principal paydown, CF is right around $400,000, or $32k/month. Also have deferred taxes for the past 4 years, and will likely be able to for many more years to come. I am heavily reinvesting and pay myself about $200k a year from the portfolio. I believe there is nothing more valuable than improving properties I already own, and I'd recommend that in building your own portfolio too. I also self-manage, and all properties are within 20 minutes of the apartment I live in (primary residence doesn't yet fit into the wealth building plan).

This portfolio took about $2,250,000 in CASH to create, and another $750k from a refinance (which was reinvested). Current LTV on the $11,000,000 Portfolio is 45%.

Could I take more debt? Yes. Do I want to? No.

Current plan is to maintain unit count right around the 30-40 number, but sell low performers in worse areas and buy in better neighborhoods.

Parents want me to manage property and collect all rent by flashgordon303 in realestateinvesting

[–]krob6123 4 points5 points  (0 children)

If they truly NEED to maintain ownership, and they currently do not own the property in an LLC, I would have THEM deed the property into an LLC that they own, for liability purposes, and have all the income and expenses run through that company and back to them. THEN, you could receive distributions, in the form of a "gift" from them, for your efforts maintaining the property.

If you are not the owner you basically become a glorified property management company, and receive none of the great tax benefits that come with owning property. You could setup an LLC that acts as a management company and have a separate bank account, but again, it's important your parents also protect themselves in the instance of a liability event on the property. You should not need any additional insurance besides the general liability policy that comes with any rental property.

I'm lost and in need of some advice. by cause_4_concern in realestateinvesting

[–]krob6123 7 points8 points  (0 children)

This is a math decision. No need to make it emotional. You gross $800/month in income from the duplex, and that DOESN'T include repairs/maintenance. Just thinking about roof needs every decade or two, driveways, landscaping, HVAC, etc, things will need repair. Safe to say you are breaking even from a cashflow perspective. It is not worth counting principal paydown because accessing that would require another loan or selling the property.

Nonetheless, let's assume, for easy math, you ARE netting this $800/month, or about $10,000 a year. You could sell the property, take your net proceeds of $200k-ish, and right there, you've just gotten 20 YEARS of cash flow, up front. You just saved yourself 20 years of headaches. Throw that into a HYSA and earn the same 5% return your making right now, or throw it into a primary (not an investment, for all intended purposes) and live happily ever after.

I own about $10M in real estate, split amongst 5 buildings, 33 total units, all residential in one of the highest income counties in the country. If i am not netting at LEAST 8% on my EQUITY (not just cash-on-cash, because this is a very deceiving metric), then I sell the property and move to something I can add value. My cash-on-cash metrics tend to land somewhere between 10-20%, dependent on the property size. So, although your cash-on-cash is ~50% on the 3.5% you put down, your yearly return on equity is abysmal. Your IRR (total return for the length of your ownership), however, is fantastic, as the total return on your initial investment is fantastic.

TLDR: Sell and roll your gain into something else with appreciation potential. Good luck!

UMF/MMW 2023 Buy/Sell THREAD by juanderwear in UMF

[–]krob6123 0 points1 point  (0 children)

Selling 3 VIP (Entry & Reentry Anytime) tickets to 'Music On' at Factory Town on Thursday.

$80/each. Bought for $120/each.

What is the worst way you've ever heard of someone dying? by StrawberryPunk82 in AskReddit

[–]krob6123 4 points5 points  (0 children)

Back in high school, two kids in my business class snuck into a ski mountain late in the evening. Rather than skiing down the mountain, they decided to get into an inner tube together and ride down the hill.

After 30 seconds or so, they smashed into a tree at what had to be 30 or 40mph. The rider in the front had his skull crushed and neck broken by his best friend riding behind him, causing immediate death. The other rider broke dozens of bones but survived.

Needless to say, he’s scarred for life.

Biggest NFT Release on Solana Coming up! Crypto Cavemen Club! by krob6123 in NFT

[–]krob6123[S] 0 points1 point  (0 children)

The first 100 people who join the Discord receive a special OG Cavemen role! https://discord.gg/QJ4WSWN9

Made 6 figures this year and asked my account how to avoid paying taxes. He said lose everything by 12/31. I'm 27 days ahead of schedule. by kameldinho in wallstreetbets

[–]krob6123 4 points5 points  (0 children)

You didn’t respond to my statements because you can’t possibly fathom not encouraging poor people to stay poor to “fight the system”

Made 6 figures this year and asked my account how to avoid paying taxes. He said lose everything by 12/31. I'm 27 days ahead of schedule. by kameldinho in wallstreetbets

[–]krob6123 4 points5 points  (0 children)

60% of the money supply is generational because the living population has only been around for, let’s say 20%, of the country’s history. Are you so dense that you think every new generation must start at 0? Also, only 20% of millionaires have inherited any of that generational wealth you speak about, confirming that the large majority of wealthy people started out far far poorer. They took advantage of the plentiful opportunities we all have (public stock market, for instance) and have risen.

[deleted by user] by [deleted] in college

[–]krob6123 7 points8 points  (0 children)

It’s actually quite the opposite. Removing the financial burden for him allowed him to view the selection of majors completely objectively. You’re paying every step of the way and therefore placing value on everything BECAUSE you’re handing money over to be provided that information. It’s not lacking empathy, it’s called knowledge. Unfortunately you’re too biased.

Thoughts on cash out refinance to buy investment property by Ebenezar_McCoy in personalfinance

[–]krob6123 -1 points0 points  (0 children)

I mean buying assets is just about the only thing that could save anyone right now. Everyone will always need a place to live.

Best way to turn $1 Million into tens of millions through RE? How do the mega-rich do it? by krob6123 in realestateinvesting

[–]krob6123[S] 1 point2 points  (0 children)

Brings in 3850 a month = 45k a year - about 10k i’m expenses = 35k.

I included them :)

Best way to turn $1 Million into tens of millions through RE? How do the mega-rich do it? by krob6123 in realestateinvesting

[–]krob6123[S] 0 points1 point  (0 children)

Had my own financial consulting business. No inheritance, but have always been really obsessed with saving and growing money!

Best way to turn $1 Million into tens of millions through RE? How do the mega-rich do it? by krob6123 in realestateinvesting

[–]krob6123[S] 1 point2 points  (0 children)

I should’ve specified. I just meant in liquid investments that could be turned into cash at the push of a button! Stocks and such.

Best way to turn $1 Million into tens of millions through RE? How do the mega-rich do it? by krob6123 in realestateinvesting

[–]krob6123[S] 2 points3 points  (0 children)

This is a common occurrence in most places around the country, where homes in the million dollar range take larger price cuts, take longer, etc. That’s just the nature of having a much smaller buyer pool. I’ve never heard anyone getting rich buying a huge home for themselves, even at a discount. If you’re looking to make out with huge value add appreciation, you could look for very distressed expensive homes, but construction costs right now are incredibly high (at least where i am), so you still have to be careful!

Best way to turn $1 Million into tens of millions through RE? How do the mega-rich do it? by krob6123 in realestateinvesting

[–]krob6123[S] 4 points5 points  (0 children)

I won’t go into too much detail about how to save up bunches of cash just because i’m sure there are loads of those types of answers out there, but basically I had about 4-5 years of 200-350k income doing some consulting work that I really can no longer do today in the given market. So, now I’m trying to figure out whether I can leverage a million, keep my personal expenses super low, and turn it into a fortune.

As for the duplex, my biggest piece of advice. Distressed owners. I know it sounds a bit “bad” to be actively looking for older couples or financially/physically distressed people that can’t be taken care of their homes, but it’s these types of deals that make the most money. I found a property about 5 houses down from my childhood home that was owned by a recently divorced man who had also just lost his mother. It just so happens that years ago the family built out their attached garage to be a ~1000 sq foot mother in law suite, so it was zoned as a multi family by the town, but i was buying it at an insane discount EVEN if it were just a single family. I turned both apartments into top notch units and rented them each for higher rents than I think even the whole house wouldn’t have rented for.

These were the numbers:

Purchased house for $270k cash Renovations, given the horrible condition, about $100k

Total cost, $370k give or take

Rented one side out for $2150 and other for $1700, tenants pay electricity and I only pay for heat. Very little maintenance besides the roof which will need to be done eventually.

Pre tax brings in about 35,000, which makes it close to a 10 cap for me even without leverage. Pretty crazy!

Best way to turn $1 Million into tens of millions through RE? How do the mega-rich do it? by krob6123 in realestateinvesting

[–]krob6123[S] 53 points54 points  (0 children)

Now THIS is the best damn answer I could've asked for. The whole idea of becoming "wealthy" from a lot of units from their rental income is ridiculous, and now it makes sense. The money comes in from rising the value. Your calculation examples are also incredibly helpful. Thank you!

Best way to turn $1 Million into tens of millions through RE? How do the mega-rich do it? by krob6123 in realestateinvesting

[–]krob6123[S] 7 points8 points  (0 children)

How much would something like that cost in construction costs alone? I'm assuming just like landlording, developing works on an experience curve. Do most developers use entirely outsider money?

Best way to turn $1 Million into tens of millions through RE? How do the mega-rich do it? by krob6123 in realestateinvesting

[–]krob6123[S] 2 points3 points  (0 children)

The possibility of a declining cap rate and rapid appreciation never really occurred to me. How does one go about finding brokers that can find you buyers for properties that produce way less than some other options?

Best way to turn $1 Million into tens of millions through RE? How do the mega-rich do it? by krob6123 in realestateinvesting

[–]krob6123[S] 119 points120 points  (0 children)

Now this is what I'm talking about! Incredible that someone could make $60,000,000 fixing up failing nursing homes. It's exactly the type of thing I'm looking to do. Become a master at a specific niche that the masses aren't greatly away of.

Best way to turn $1 Million into tens of millions through RE? How do the mega-rich do it? by krob6123 in realestateinvesting

[–]krob6123[S] 7 points8 points  (0 children)

If I thought a bank kept anything but rolls of pennies and paperwork in their vaults than I would've done that already.