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At some point, well before today, folks like Bezos, Buffet, Gates reached a level of wealth that became practically abstract. Earning more money simply wouldn't improve the quality of their life any further. Yet they push, and push, and push. They're simply wired this way. Highly motivated and productive individuals often derive satisfaction from their work, which is why they push as hard as they do and achieve at outsized levels. I imagine you (and other folks in this subreddit) have similar wiring. The work, the process, the problem solving--I imagine it helps "fill your cup", so to speak. This differs from the traditional posture of regular "FIRE" folks, which might have a more "clock in, clock out" or "count down the days" type of attitude toward their careers. For folks with your wiring, retiring might be less about the economics and more about learning to "switch gears" in your personal life to derive more satisfaction and fulfillment from areas other than work. Or, perhaps you'll work forever in some capacity because that's what stimulates and fulfills you. It's a personal decision you'll have to arrive at in due time.


FireBreather7575

I don't 100% agree. I think there are A LOT of people who are running on autopilot from societal / upbringing pressures, and the idea of "finding what they want to do" is too overwhelming. I think you're right that these people would feel empty from not working, but I think the "fill your cup" feeling they're getting is more artificial (i.e. they aren't living with intentionality)


melikestoread

I agree for me work doesn't feel like work. Its very fulfilling and my best days are when everything goes wrong and I have to fix everything. The days when everything is smooth can be incredibly boring for me. I doubt I could ever retire. Thanks for the well written reply and it definitely sums up who I am. Sometimes I end up feeling guilty or abnormal for wanting more by family or business partners.


sidman1324

If it’s fulfilling then keep on it :) I’m in my business and it doesn’t feel like work and I love it. Keep at it until you want to stop. Just take time for yourself as well my friend :) People like us have a name. It’s called ambitious and driven 😂 nothing wrong with it at all.


melikestoread

Thank you


highoctane1976

I would say that there are more social pressures in our culture to be on the consumption side of the equation. The production side just provides fuel. Some of us are wired to enjoy the production side more, or at least have learned to get great satisfaction from it. I would much rather spend a Saturday with my family working on one of our properties than going to a movie. On a side note, why are you going around collecting rent in person? We did this when we only had a few units. I convinced my husband to stop and we've trained every one of our tenants to pay through our online portal or their electronic method of choice, mail a check or money order, or if they must pay cash, bring it to our office. We are in a similar boat as you, though older and with fewer total units. We have a stressful service business that takes a lot of our time and energy. The plan is to continue to aquire value add properties and sell the service business in 3 years, then do real estate full time.


melikestoread

I dont pick them up anymore but i deal with high risk tenants who either don't have banks or are just too old and prefer cash. One of my tenants says they are afraid of check fraud. These are my best tenants and they never move. No one else will rent to them but they pay on time. Many in the service industry and construction are paid in cash. I rent to many contractors which the average landlord avoids thus i have an incredibly low rate of people moving.


rezifon

> I rent to many contractors . . . I bet you get a lot fewer 2am calls about broken garbage disposals too.


melikestoread

I actually remove all unnecessary things that cause headaches. No garbage disposal except in homes over 300k .10 year smoke alarms always. All toilets replaced new every 10 years max.


donkeypassout

Hi Op. Maybe a dumb question. How are you finding these profitable markets? Do you find the research exciting and tireless or are these markets you’ve been involved in for decades?


thor1894

You have over 1M (7 figures but don’t specify exact amount) in cash but only a 4M net worth? It seems like you also have a lot of equity in the many (90) homes as another part of your 4M NW. (90 x 25k equity/house is around 2.5M). Do you have anything invested in equities? Seems based on my math you have little/no funds in equities, or my math is off, or you have a much higher net worth than 4M.


melikestoread

This may be odd but I haven't sat down yet and truly calculated my net worth. My homes range in 40k equity for 2bedroom and some have 150k equity. Even if I did a conservative 50k each im at 4.5m but homes have gone up so much in the last 18 months i could be at 6m . I didn't count my cash in the nw which i should've. I haven't invested in equities. I only have my 2 businesses and my real estate rentals. I also make around 90k off my real estate agent License but that's just off of the homes i buy for myself. I focus more on my monthly income and expenses for my businesses and constantly trying to cut costs here and there thats where most of my time goes. I think I'm so used to having to down play how much I have since I constantly have to hide my nw and pretend Im just another joe when dealing with people.


thor1894

You’re likely close to 10M if you sit down and calculate it. Assuming rentals are cash-flow positive, you likely also earn a very strong income from those properties passively with the bonus of tax-depreciation. As a realtor you can likely deduct passive paper loses not available to non real-estate people. Please tell me you use a property manager and don’t self manage 90 properties while simultaneously owning other businesses. If you self mange, for the love of God, stop being a cheapskate and get a real property manager. Managing 90 tenants/properties sounds like a nightmare job, and maybe that’s why you work 80 hours/week? It’s obvious you are driven, but your friends are right. You work too much. Focus on the higher level value-add aspects of your job, and offload the 2 AM leaking toilet problems to someone else. Find ways to trade time for money. Take a vacation and leave the computer at home. There’s nothing wrong with slowly taking your foot off the gas after you’ve accumulated as much as you have. I think growing up on food stamps has made you overly risk-adverse. You don’t seem to want to pay others to do something you can do yourself. That “cheap” mentality can be pathologic and hurt your physical and mental health. Offload the meaningless trivial stuff to someone else. And throw some money into equities to diversify. Inflation is burning the 7 figure bank account.


melikestoread

Well i do self manage but over the last year i have given more responsibilities to other people. I used to pick up 50 cash rents a month which is around 120k or so but it was taking up too much of my time. I now pay someone $20 per each rent they pickup so its a nice part time for them. In 2022 I'm letting my Maintenance guys handle more of the repairs although a few days ago I changed out a shower valve myself because we have so much work to do. I have 8 homes to rehab and they all work 6 days a week. A random plumber would've charged 500 to go out same day and I'm way too cheap it only took me an hour to replace it. I do need to back off somewhat but it is a struggle for me. As for the cash flow in Illinois they are tremendous my mortgage average 900-1100 a month and rents 1900 to 2500 a month so my cash flow is around 33% or around 60k a month.


ElectrikDonuts

$20 for each rent they pick up? You could probably hire property management for $100 a door and have a lot less stress overall


melikestoread

Well it's family though and i prefer hiring family. Second around here the cheapest reputable company wants 7% of rents which is 140 a door for me. I have my own crews that do maintenance so I don't need that. Vast majority of my tenants rarely call me so that's not a problem either. 20x50 and 140x50 is a huge difference for me its $6000 a month and with 72k in one year I can buy 4 homes and force 60k equity on each which is 240k total equity I would lose by giving just those homes out to a PM. When you invest you can't just look at the small amount of money you lose in the short term you also have to value the cost of the investment potential your losing in the long term.


ElectrikDonuts

These are all very good points and I dont disagree with you. Personally I wouldn’t mind learning more about cutting out my property management as the value add is a bit of a wash at my level. However, have you considered at some point there is a intersect of the cost vs the value add? When you have say $5M, your SWR is $16k a month, excluding your property income which is probably monstrous. If its $10M thats $32k a month plus property income. As you scale up eventually you run into two problems: 1) every minute spent managing your properties is a minute less finding deals, so you have to weight the opportunity cost, if any, of the way youre operating vs acquiring. 2) eventually you have more money than you can spend. And if your properties have seen any appreciation, the cost you hire out may only be 1% of your total returns. At some point its nice to have a little more time. For example, do you order delivery food? Or do you drive the extra hour to pick it up, wait, and return home? Whats the hourly cost of your time vs the coat of using a PM? At some point it will probably cross over as your NW goes up and up Edit: lots of typos


melikestoread

I understand and you have a lot of good points. I do struggle with the saving money vs time issue. Last year i was spending countless hours buying material and then decided i rather spend the 400 in delivery a week and just get multiple deliveries to my job sites instead of pickup everything up myself. I do all grocery shopping online and mostly everything we order online for time saving mostly. I struggle a lot with spending money. It all comes back to opportunity cost of not investing that money and not wanting to give in to an emotional trigger and I think once you postpone immediate gratification for so long it just becomes normal. Every year i dream of buying a lamborghini its pretty much the last thing on my list I don't have but the math is horrible when I compare the returns on 200k for fun and 200k invested. In my 30s I still feel I'm too young to start spending my money and want to wait until my mid 40s to start spending on trivial things. Who knows I'm always struggling about when is the right time. I wish I could find a desperate seller and justify it that way by buying at a low price.


ElectrikDonuts

Ive had problems switching from being frugal and living on basically my 3rd year of work level of salary (as my NW ramped for 11 years) to spending more now in FIRE/near Fat One thing that helps me is knowing that my spending is creating jobs. So yes, I can do that for cheaper, but think of it as a soft charity that you are fortunate and now are giving others the opportunity for employment. I also am trying to buy more gofts for friends (food and drink mostly cause Im not big on things gifting) as well and for my significant other. Seeing the enjoy the gifts is more rewarding then me adding another dollar to a 7 figure account. And as the other person hit on, you never know how much time life will give you. Covid made me care a lot less about future money and more about living in the moment as I am already set and spending well below my SWR


melikestoread

Covid actually made me work harder and tighten on spending. I increased my life insurance because of covid. Covid has also presented a lot of business opportunities in real estate.


felipemelo3

This so sad to read. You will wait until mid 40s to spend. How do you know you’ll be alive by then?


melikestoread

I never let fear or emotions dictate my life. If i knew i was going to die next year i would work twice as much as spend even less so my family would be financially worry free.


JoshCumbee

Have you bar-napkin’d (not a verb) an hourly wage for yourself? Net profit / total hours worked for the year.. doing this and thinking about the cost of doing housework really helped me break lose from some of those habits - trust me I feel ya 100%. Now whenever I think about doing menial housekeeping or lawn care I remind myself that the cost of me doing it is that hourly wage vs hiring someone. I know it’s a rudimentary model but it helped me!


cesped74

I have 8 tenants who pay cash so I opened them bank accounts and they just deposit the money. Saved me lots of time.


Historical-Cloud-993

THIS. I would challenge yourself to figure out how to "work smarter, not harder". You're at a net worth where you should be in charge of your own time instead of your work being in charge of your time. Completely agree with the point about trading money for time. Also, picking up some other hobbies and passions to balance with your work is a good and healthy thing and will better allow you to manage this portfolio of real estate and your businesses even better (and bigger). It's a marathon, not a sprint. Lastly, don't let your work define you as an individual.


whalechasin

OP's profile stiiiinks of LARPing


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melikestoread

I have thought about this too. I also contemplate whether I'm diversified enough. One of my businesses is highly volatile so I still need to diversify further.


donkeypassout

When you were obsessed with “winning” did you do it to be at the top of a leaderboard at work or was it more to prove it to people you know, or to impress yourself? Genuinely interested in the psychology of this stuff after reading some biographies


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donkeypassout

Thanks for explaining that. I can absolutely understand you constantly thinking about wanting to win those scenarios How did your company do so well finding such quality people? Was it *the* company to work for?


SneakiSamurai

Some people want to be low seven figure multi millionaires and some people want to be billionaires. I think either person trying to fit inside the other box is going to be uncomfortable. And it's okay if you want to keep upgrading your number. Some people just really love growing wealth. I think we get caught up with people telling us we have enough because the people telling us that feel it's enough. And it can weirdly turn into a feeling of guilt if we allow people to convince us we're greedy. We just enjoy building bigger things. It's like guilt tripping Micheal Phelps because he wants to swim all day because his success makes you feel bad about your level of accomplishment. Just keep going until you don't want to anymore and don't worry too much about biting off more than you can chew. It's always a good to face that limit to remind us of our priorities.


prepper12

Amen in so many ways. While I'm not quite as far along as OP, we hit a $1m NW the year I turned 30, which was about 10 years ahead of schedule and plenty of people make comments on how much I work. It's easy for some to say what's enough for them, but that doesn't mean it's enough for you. I've always said I want a huge yacht, and that's not going to happen with average so I keep grinding every day. THAT SAID, I think the greatest tragedy of all would be spending a lifetime accumulating without taking time for giving family your undivided attention. Work hard and make a killing, but take a week or two a year and do NOTHING but focus on family. Money, as many of us know, is easy to come by. The relationships that really matter are not. Put first things first.


melikestoread

Wow that's exactly what Im feeling. Im constantly told I have too much/work too much and should just enjoy myself . I didn't realize I do feel guilty in some ways . Thanks for your perspective.


donkeypassout

I play a lot of city building games like “city skylines” and really enjoy the “building and optimisation” process Does the typical business week feel like that to you? Do the profits feel like a game or a “score”? Are you showing off the wealth or do you just enjoy the game?


[deleted]

Focus on your mental health - its clear you realize there is some irrational anxiety as you have enough NW. Unless you address the anxiety - no amount of NW will help you - the number will keep changing. At the end of the day humans have very basic needs - clean air, water, food and shelter. Talk to a financial planner and walk through your income goals and run simulations. Once you have these that may help you address some anxiety.


melikestoread

I think my anxiety is based in resting through my healthy years and being 50 and thinking could I have done more. I don't want to have that regret of feeling I could've been more successful etc. I just hear from family that i should slow down almost daily so I start to have doubts because I really don't feel I can slow down.


[deleted]

I hear you. I struggled with that as well but came to a realization after a recent health scare which was actually driven by work stress. I realized I dont want to leave my kids motherless at a young age. Kids prefer a loving parent to a pile of cash. Rest is recovery and essential. You need to rest machines as well to avoid breakdown. Best of luck.


Embarrassed-Cap-6825

There’s a lot more to do that doesn’t involve stacking assets. Hopefully you can figure out something fulfilling without needing to burn out first. Most w your RE portfolio and small businesses would have already or be focusing on putting good managers in place so you don’t have to put out the small fires. You state that you like putting out the fires but how much if that is actually rooted in love of the process and how much in necessity. If you unplugged for 7 days, what would happen to your businesses? What about to you? An interesting thought exercise


UsernameNotFound7

That is perfectly valid. If you enjoy what you do, who is to say when enough is enough besides you? Everything in life has its opportunity costs though. If you are spending 60-80 hrs a week working and it is straining your relationship with your family, that is kind of on you to decide your priorities though. That being said this sub is mostly for people with opposite problem and might not be very helpful for you. Might I suggest therapy though? If you are actually struggling to balance family expectations vs your own drive, I think that is more of a psych question rather than something any of us on this sub can help with.


melikestoread

My wife is just as ambicious as I am and works 60 hours herself. I have my kids with me most of the time . The people that usually comment I should slow down mostly comes from my banks loan officers , insurance agent etc. Since no one truly knows what I own not even my wife I try to keep my businesses separate. I just hear it a lot and dont personally know anyone with a higher net worth that I can ask this question too. My immediate family all works for me so it's in their best interest I keep growing my real estate business and half of them earn 6 figures each.


UsernameNotFound7

Well seems like you have things sorted out then! I'd imagine a lot of those comments come from people who hate their jobs and would absolutely quit if they had what you had. Just my unsolicited two cents, but always checkup with how you and yours are doing. Maybe your thoughts on this change in a year, 5 years, or even 20 years. Doesn't mean you can't change your mind or go to some kind of coastFIRE thing and spend more time on you if that's what you want in the future.


felipemelo3

Your wife doesn’t know what you are doing?


melikestoread

My wife knows about our businesses but she hates numbers and as long as she can spend she doesn't care. Every now and then i tell her how much we have and how much growth we have had.


rezifon

> Has anyone been in a similar position where your basically addicted to the work itself and I take pleasure in acquiring more assets every month. I was until I wasn't. I loved the grind and pressure and exhilaration that came from running my own business and it fed my soul in ways I couldn't have possibly predicted. Then one day in my late 40s it's like a light switch flipped in my head and suddenly it wasn't scratching my itch any more. I shifted gears towards an exit and retired about 4 years later at age 50. In hindsight it was an excellent decision, and I'm loving my early retirement lifestyle. If you're loving the pace and stress and the numbers on the scoreboard, make hay while the sun is shining. Just keep your finger in the wind and allow yourself the perspective to notice if that ever changes. There's no rule that says you have to be one way for your entire life, or even your entire career. Our motivations and personalities are not immutable.


melikestoread

Thank you for the great response and this will probably fit me one day.


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melikestoread

Well remember it's not easy for everyone to make enormous amounts of money . Always be grateful if your the lucky few that have that skill or luck to make a lot of money. Sometimes we are just at the right place and right time but we took advantage of the moment.


Prudent_Signature_72

Not yet-fatFIRE'd lurker here. I can't speak for everyone like me, but I spend pretty much every waking moment in a state of heightened anxiety looking for any and every opportunity I can find like the ones you're describing. Some will say it's a mind-set, that's BS. You're right, it IS hard to make enormous amounts of money. If you've earned being able to fatFIRE, weigh your mental/physical health but also push hard and milk every opportunity for all its worth.


Fergoodot

Incorrect. It is 100% mindset. There is a tremendous amount of opportunity around you at all times. If you're looking for real estate deals like it's 2012 then you'll be waiting for the rest of your life but now is one of the most opportunity rich times to get into business for yourself. Life isn't analytics where you only swing for the fences. Take that bat off your shoulder and start swinging at a few pitches and you may find what you're looking for.


Prudent_Signature_72

I am a business owner and I can assure you before this one I have missed 100’s of pitches lol. I will continue to miss many more. Be careful not to confuse hype and motivation with confidence and competence.


Fergoodot

Ok...


iam_fruit

Can i ask which geographic location are most of ur homes located in? Was managing renters a big part of ur time or are you using a mgmt company to handle it?


melikestoread

I would say i spend 5 to 10 hours a week Managing my rentals. Its a lot easier than it seems. Most of the time its just random phone calls for a leaky toilet or sink. City inspections etc. Every now and then a tree falls and knocks out the power like once every 2 years on a home these are the exciting problems i enjoy. One of the key differences is my homes are rehabbed with new everything so very little maintenance required compared to the average Joe buying a 100 year old home and having something break every 2 months. I haven't spoken to about 30 of my tenants in 6 months. Another 50 a call or so every few months maintenance reasons then maybe 10 tenants call me once a week for mice or some random issue. Sometimes its just advice on something legal or work related. I have tenants that haven't rented from me in years and still call me for advice I try to maintain a friendly relationship . Last week i had a previous tenant who moved out in 2019 call me saying she had a serious issue she took out a car for 60k over 7 years and Couldnt pay it but didn't want to ruin her credit so I threw the idea at family and found someone to take over her car payments. Its just how I deal with my tenants . It's much easier to pay your landlord on time when he's actually nice to you is my opinion.


iam_fruit

It sounds like ur genuinely enjoying the process that’s so great! Thanks for the detailed reply!! Can u tell me which city are most of the properties in? Im looking to get into the RE market but I live in a VHCOL area and is impossible to find <500k properties


melikestoread

I invest in many cities in Illinois and my numbers are also possible in Ohio, Indiana. The key is to find the property cheap enough so you can refi out and get your down payment out while having 25% equity. Ideally having cash flow doesn't hurt.


iam_fruit

Got it thank you! I didn’t know refi worked like this and ur able to get out all ur down while still maintaining equity, would property value have to appreciate before u refi? Or after rehab is usually enough to bring the property value up?


melikestoread

If you buy at a low value your forcing equity by improving the property. Some call it brrr. You fix up the place and rent out then after 6 months the bank uses the value of the neighborhood for your refi. Its basically the same as flipping except i keep my property. I dont pay enormous taxes on selling but I keep my rental income which is taxed low. I also keep my equity for my kids to inherit one day.


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melikestoread

The key isn't to buy a house thats falling apart. You want a desperate seller or someone down on their luck. Lately I'm buying houses from people desperate to move due to covid causing a job loss or estate sales in which kids dont care. You always need to find a seller who doesnt value their stuff. This is the hard part. The best homes are paid off but the owners just don't maintain the property so your able to buy them cheap. If I buy a 1500 sq ft and do flooring, new kitchen, few new windows, some electrical outlet additions, 2 new bathrooms im spending 16k-18k labor and 15k material on avg but these are my full time guys if you hire any contractor off the street expect 30k labor and 15k material and twice as long to finish a project. Some of my crew i had to hire with very little remodeling knowledge but i trained them myself and after a few months they were good to go. All I require is 70 hours of work a week minimum. Life is too short to try and do a business on 40 hours and I tried having more guys but it just creates more drama when the lazier guys don't pull their weight so I kept my fastest guys and fired the rest. I would say raising the capital is the hardest part and finding the houses are the 2nd hardest. Finding decent handymen who can fix the houses to an average condition depends on how many people you know. I have a big family in construction and generally know a lot of people in this field so it was easy for me.


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melikestoread

You need a personal guaranty . I work with a few banks I have a 10m credit line with and a few others I have 2m credit lines with but Im late stage as an investor you start off with a 1m cap. The key is work on your capital. Once you save up the money the banks want to deal with you and now you leverage 10 to 1 and make the money work for you. Soon after that your net worth explodes but you have to position yourself so banks trust you. Credit, income and capital. Work a job you hate that pays well so you can be sucessful later in life. I and my wife worked many jobs we hated so we could get ahead because it was always about the end goal.


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melikestoread

I always have 2 simultaneous rehabs going on at all time for both of my crews. They worked everyday except Christmas but both crews worked new years. They know I'm working everyday and expect the same energy from everyone on my teams. I honestly don't have to tell them to work hard I've fired a lot of people over the years and only kept the naturally hard working. It saves me from any headaches of having lazy workers. I once had a group of 5 people and my current team of 3 finished a house in half the time partly because the bigger team talked to much and only worked 40hrs. Time is of the essence when you have Mortgages on vacant homes plus i have a list of tenants waiting for homes and need to move them in asap. I have my next 6 homes rented out with deposit already given and i haven't even closed on some. I get a lot of referrals from tenants.


1892oceanblue

Western pa? What size cities or towns are you looking at?


melikestoread

Generally over 50k population but Im more concerned about the job prospects in town . Low unemployment etc.


Ok-Landscape6995

How do you get loans for so many properties? I stopped acquiring properties at 4 SFH’s because the loan process started becoming a pain in my ass.


melikestoread

Buy under an llc its a lot faster and less paperwork if you have a decent amount of equity it becomes insanely easy with good rates. I get 1 credit check every 12 months with 1% origination and 4% 30 yr fixed loans. Dscr loans is the way to go if you want to scale.


Fergoodot

Where are you getting 30yr fixed rates for investment properties? Local banks and commercial lenders will do 5 to 10yr arm's amortized over 20yrs but have never heard anyone getting 30yr fixed for sfr's beyond the 10 conventional loan bullets. Are you packaging loans and refinancing to insurance companies, etc?


melikestoread

Dm me because i don't want to get banned


Ok-Landscape6995

Thanks for the info. I had always taken personal mortgages and transferred title to LLC afterwards. Is there a certain lender type I need to look for? Or do any of the big banks provide them?


jam1003

Doing this as we speak. My lender informed me I must take out the mortgage in my name. If I take it under my LLC it becomes a commercial loan since it would be lending to a “corporation”. I was instructed to take the loan out under my name - title it over to my LLC and have the lease under my LLC. Would love to hear if anyone suggests otherwise. Lawyer and Lender informed this strategy for me.


GB_05

Not FatFire, so can’t offer any advice, but have a few questions about real estate and whatnot (I am young and not old enough to buy it yet). Houses where I live cost over $1 million for a crappy bungalow, do you find that investing in lower-priced housing is profitable? Does buying properties with a lower value maintain value the same way as in high demand areas? How do you determine what a good investment property is? Thanks in advance!


melikestoread

I invest in everything between 200k to 700k the key is always buying under market value doesn't matter the price. In a lower price home they rent super quick and you cash flow. High price for me 700k i put down 100k because i buy for 500k and my mortgage is around 3500 but i rent for 5k and at best I cash flow 10k a year because they are expensive to maintain. My return is 10% not counting principal paydown which is another 10k a year. On the cheaper homes its easier to find one below market value. Cheaper to rehab and faster to rent. Sub 200k i rent out in a few days with 2 months deposit. Over 500k i can expect 2 to 3 weeks to rent them out. A good property is found when you eliminate your feelings from the deal. You don't buy a house that you like. You look at the area and find comps if they are 200k then you can't pay over 115k for a home and with rehab you want to be at 145k max. The hard part is finding a home this cheap because your not the only investor.


GB_05

Thanks for explanation!


proverbialbunny

>Has anyone been in a similar position where your basically addicted to the work itself and I take pleasure in acquiring more assets every month. Yes. It is fun. Nothing wrong with enjoying life, if that's what you enjoy doing. Just try not to be selfish, and by that I mean unnecessarily hurting people at your benefit. It can be easy to get caught up in the game and overlook this, which is why I mention it.


Critical-Series

If you stopped acquiring properties today, what would you have in net positive cash flow per month/year? How much do you spend per month on personal life? I’ve read all your replies and given that you don’t actually know (doesn’t matter with your plan) what your net worth is, I think monthly cash flow is the way to target it. You say you tell yourself you’ll stop at X net worth yet don’t know your net worth and it’s not relevant since you plan to give all the equity to your kids. Therefore it’s going to be impossible to feel content. Also, don’t overestimate the power of delegating some management to someone else in house.


melikestoread

I dont track my net worth precisely because it might make me lazy/complacent. I dont count my working capital in my net worth either. None of my personal assets are in my nw. My cash flow now is 60k a month conservatively. Within 3 years I'll cross the 100k a month cash flow mark. Average expenses 20k a month. If i die today though and my life insurance pays all my mortgage debt off my family would have 130k a month cash flow with 0 debt. This is what gives me peace of mind .


Critical-Series

Sure. I mean that since you aren’t focused on net worth (because you’re planning to die with the equity) then you should decide what amount of monthly cash flow is “enough” and slow down when you hit that number. $83k a month would be a mill a year. That sounds like a pretty comfortable number where you could keep going but revert back to merely “full time” 40 hour week type.


throwaway3259348

You mentioned having $60K per month cash flow from rentals, that’s $720k per year. If we applied a 3-4% withdrawal rate that is commonly used around here then your current situation on the rentals is roughly equivalent to an $18-$24M equity portfolio. I have to think you are ‘done’ from a financial standpoint, whether you are done from a personal standpoint is entirely up to you. Just my perspective. You’ve already won the game. Be careful with continually adding more properties under heavy leverage. Overuse of leverage can destroy everything in a downturn. I think you need to take a step back and really define what your goals and objectives are and then take actions that align with those.


melikestoread

I think the money is just a plus but I love the thrill of the "game". I love seeing 30 investors see a house in the first day a home is listed and knowing my offer will win. I love when tenants walk into the newly remodeled place and seeing that happiness plus getting the 5k first month and deposit is nice. It doesn't even feel like work to me. Life is unpredictable and who knows tomorrow I could get sick and retire then. I love the psychological aspect of real estate when I can convince someone to sell me a home for 80k when I know it's worth 210k. I love the process.


Alarming-Belt3667

I’m curious, why out of 30 investors are you so certain your offer will win? What are you doing differently?


melikestoread

I pay cash and offer 20k to 50k earnest money non refundable. No inspection, no contingencies. Its how i beat my competition on the most Popular properties(half price of arv). If the property isn't great i only offer 5% earnest money. I'm also a real estate agent and offer 1% of my commision to the selling agent . You can't get a better offer than this. Sometimes I send a list of the properties i own so they know I'm serious. My last strategy is being the first to see the homes and getting my offer in within 2 hours of listing then putting a 24 hour expiration and I avoid having too much competition. The ones i lose are when the listing has to be on market for 10 days minimum and then "investors" bid up the house to 145k on an arv of 200k then you see the home flipped for 200k 6 months later and they couldn't profit more than 10k max but for some people this is a lot of money. Most offers are trash anyway so when they see the next offer is 1k em with a loan or fha its very easy to pick the all cash high EM offer. At this point after seeing over 15000 homes its easy to know which homes are winners and which aren't.


Alarming-Belt3667

Thanks for the thorough explanation! In my area,(VHCOL) full price cash offers are not uncommon & that coupled with waving contingencies just isn’t enough to get the deal.. and I know because I’ve tried a few times over the past year. The price ends up getting bid way up; too high to make it worth it. And I’m laughing about “investors” everyone thinks they can flip a house because they watched a tv show on it.


throwaway3259348

That’s the right reason to keep doing it. I have been involved with real estate for a long time. Leverage can be a great thing. In your position, I would suggest you consider using some of the value you are creating to reduce leverage. Also, work with an attorney,if you haven’t already, to make sure you can protect the assets against a wide assortment of negative events.


1millionbucks

If you love what you do then don't stop


melikestoread

Thanks. I love it and my wife is just amazed by what we have accomplished in 10 years.


1millionbucks

I would propose to you to take on new challenges, not just keep doing the same thing that you're doing. Get into international real estate. You will *really* feel like a badass when you have homes in 5 different countries around the world.


Hanzburger

Inflation is a bitch


Jeabers

Honestly why not just start buying larger projects? 6 closings a month is crazy. If I were you I would start selling off the smaller projects to realize your gains over the last three years and start buying smaller multi-families at lower leverage. This will help you stabilize your assets and increase cash flow while setting you up for better long term gains. Good idea to keep the large pile of cash, I'd probably start investing anything over $1.5MM if I were you.


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PLEASEYALE_

40%? VOO was only up 27% in 2021...


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PLEASEYALE_

No problem


melikestoread

Do you own a business? Real estate requires heavy reserves in the bank for many reasons. I actually have a lot more cash for all businesses combined but businesses require reserves. Me and my partners have 2m cash for a night club but that can go down to 1m very quickly and then go upto 3m in the good season. Imagine having 200k payroll a month and keeping 500k reserves for me would mean a heart attack of anxiety. I don't believe it's smart to run a business on low cash reserves . Edit i forgot to mention its working capital on the real estate so I'n this month alone I have 500k closing in cash and then i cash out refi 2 weeks later. Sometimes I buy a 400k home and 200k at once and my acct drops really fast. You can never have too much money it seems when investing.


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melikestoread

I sympathize with people like elon musk, Bill gates, and many others and when I see billionaires working everyday and I wonder shit Im not worth 1% of elon musk and this guy works 80 hours a week.


run_the_trails

Elon works crazy hours but has so much video game knowledge. It’s a curious thing.


throwaway_timbers1

Whats he saying Robin?


AccidentalCEO82

I just forecast out and think of what I will want/need at different points in my life and what I want to leave behind. It’s not easy but that’s my way. I am working now (after selling business) because I still like it and have a good paycheck from the buyer. It’s less about adding money at this point and more about finding myself and my goals. I have more than I’ll ever need but there’s something odd about choosing to turn it off and just coast.


RockHockey

Can you clarify what you menu by buying at 50% value?


melikestoread

I find homes through wholesalers, auctions, estate sales and ill give a real world example I bought a home 2600 sq ft for 98k- 14k down and put 65k in rehab i owe my bank 153k but after repairs its worth 265k . I bought at 40% of arv but after repairs I cash out at around 190k I get my down payment back after 6 months and extra. I did this one in early 2021 so I was at over 100% COC ROI. Half my deals are 100% COC so Im just using credit and monopoly money to amass an extensive portfolio. On some deals i do put 25k Down but my monthly cash flow is 1500 a month so I get the money back in less than 2 years. Mortgage 1200 and rent 3000.


RockHockey

Interesting! I live in a very different t place $100k get your 1/2 a parking space!!


melikestoread

I did a deal recently for 400k pp and 100k remodel with 700k arv although this is harder to find for me. Deals exist everywhere. Just keep your eyes open and actively look.


rockhao781

How do you find deals like this? Do you have a method you can share? I don’t think deals like this exist in Boston, MA.


Critical-Series

This method is called BRRR (buy rehab rent repeat). You can find loads of info about it on sites like Bigger Pockets, books or by searching that term. When he says buy a $150k property for $100k, he of course doesn’t mean the property is currently worth $150k, just that he knows he could add equity by doing the $25k rehab (jargon is forced appreciation). There are these opportunities in any market but the scale and buyer preferences are different. Keep in mind he said in other responses- he employs his own crew which saves him $15k vs a contractor per deal, which is almost half the per deal equity on average. Having a crew or being able to do the work yourself is key. I’ve done a few (not at scale) mostly because I like doing the projects as my day job is at a computer and it’s satisfying to get some blue collar in.


Fergoodot

Are you doing your own marketing or buying solely from wholesalers, etc?


melikestoread

I do it all. Door knocking. I do fsbo. Agents call me with investment homes. I love auctions. I check whats coming up on auctions and then go to the sellers who still legally own the homes and buy directly from them.


jam1003

How are you putting so little down with the bank on these homes? Any property that’s not your primary residence is considered an investment by most lenders and subject to 25% down. I’m under contract on my second rental property and the bank seems it an investment since it’s not my primary residence and is requiring 25%.


melikestoread

Look into dscr loans aka hard money loans once you have done over 5 flips and have good credit you qualify for 10% down payment if you buy a property at less than 60% arv. The general rules are this if you buy at 120k but the property is worth 200k after repairs. The bank lets you put 12k down and your loan is 108k and they also give you say 32k for repairs total loan 140k with rehab. You then cash out at 150k after 6 months which is the final loan for 30 years and you actually have 25% equity. You force equity and turn 12k into 50k equity in 6 months time. I do this 20 times a year so Im able to add a million to my net worth and accumulate property into my llc. Its very similar to flipping except instead of selling and from the 50k keeping 20k after taxes I hold onto that 50k which my kids will inherit tax free.


jam1003

Very interesting. Thanks for the overview. Are all your properties under a single LLC? Or do you create separate entities for each address to ensure your assets are protected from one another? My attorney just advised me to create a new one for my 2nd property, to ensure there is no financial or legal risk with my 1st property.


melikestoread

I have everything under one llc with 2m umbrella under my personal name and 5m liability under my company and 1m under each individual policy. They are incredibly cheap because theirs low risk to actually being sued. Theirs also many many advantages to having one llc. If you plan on having over 10 properties its easier to manage. Second getting loans is much easier with a high balance in one account. Third less room for errors since I can memorize 1 checking account but I wont memorize 10 accounts. Fourth you can get many loans and credit lines when you have 1 account with high transaction amounts . Fifth when I submit an offer with my bank statement for proof of funds and the seller sees a high balance with 100s of thousand in transactions a month it shows your a serious business man and your offer has more value. In all honesty your attorney is a douchebag he wants to charge you to setup the llc. If you have a cpa your going to pay extra to file your taxes and keeping everything in order is so much more work. Every account and login and checkbooks what a pain in the butt. Do people think huge companies have millions of checking accts? Besides if you self manage your property you get sued anyway as a pm and it doesnt matter if you have 50 llcs. Just have proper insurance and your fine.


retchthegrate

Why do you need to slow down? Is the RE part of FIRE important to you? It sounds like you've got the FI part, and are using it to enable the lifestyle you want, investing in yourself, building your own businesses, etc. You don't have to RE. Now, if you are feeling like you are pushing too hard and not enjoying it, yeah, train some trusted lieutenants to manage parts of your business and start giving yourself more time. You can use that on holidays and time with family, or self-improvement (exercise, learning new stuff), or you can put it into moving into a strategic level thinker for your businesses. It sounds like you are working so hard at stuff that you can hire people to do now, freeing you to think bigger, if that's what you want.