What is the 2 rule? Please explain

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  • Real Estate Investor · Cebu, Philippines · Member since 2008 · 297 posts · 5 votes
    17y

    Ya Rapid may be an option.

    Jon whaen you said " Max Payment: $420
    Max loan: $63,000" Were You talking PITI?

  • Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
    17y

    No, just P&I. Taxes and insurance are part of expenses, even though you pay them with your monthly payment (usually).

  • Real Estate Investor · Cebu, Philippines · Member since 2008 · 297 posts · 5 votes
    17y

    OK that makes sense. Jon do you ever get to Sturgis?

  • Real Estate Investor · OH · Member since 2008 · 4k+ posts · 1k+ votes
    17y

    Travis,

    What is your goal with respect to rentals? Do you just want to own one in hopes that it will appreciate and you can sell it later? Do you want to own enough of them that you can quit your day job? Are you looking for additional income?

    The answer to those questions will determine what you should do with respect to cash flow.

    For example, if you're wanting to quit your day job, then you CERTAINLY can't buy a bunch of properties that lose money! If you just want to have one or two rentals and build some equity for retirement, then losing a little money each month could be considered a forced savings program. Just keep in mind that being a landlord is a pain in the butt. I can't imagine dealing with rentals without making a significant amount of money doing so.

    I also wonder what you have done to find a good deal in your area? How do you know that there aren't great deals out there? Great deals don't simply fall from the sky in ANY market.

    Good Luck,

    Mike

  • Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
    17y
    Originally posted by Travis Elliott:
    OK that makes sense. Jon do you ever get to Sturgis?

    I don't think they allow us Triumph riders in Sturgis. :D

  • Real Estate Investor · Cebu, Philippines · Member since 2008 · 297 posts · 5 votes
    17y

    Lol Jon you would be fine. You just have to hang with the Honda crowd. Well if you ever get up here, during the rally or not, I would love to buy you a beer or soda and talk Real Estate.

  • Real Estate Investor · Cebu, Philippines · Member since 2008 · 297 posts · 5 votes
    17y

    Mike I just saw your thread.

    As far as what I would like to do...All of the above I guess but mostly I would like to quit my day job.

    As far as where do I find my deals...All over. I use Real tors, I ask at garage sales if the house is for sale, I talk to complete strangers if they know of any homes for sale that arent listed, I have sent a letter or two after someone has died, Craigs list and so on.

    Do you have any other suggestions? I am open to ideas

  • Real Estate Investor · OH · Member since 2008 · 4k+ posts · 1k+ votes
    17y

    Travis,

    If your goal is to quit your day job, then you MUST have significant cash flow from every rental, using ALL of the real world expenses, including management. Jon's rentals are based on appreciation for the future and therefore he's doing something completely different than what you need to do if you're going to quit your day job. You need cash flow!

    I think you're on the right track. Talking to everyone you know and people you meet will certainly result in deals - it just takes time. I would also suggest joining your local REIA, and making friends with the successful investors in your area. If there isn't a local REIA, you might consider starting one.

    A small classified ad in the local paper also will generate results over time. It takes a LOT OF HARD WORK to find great deals, but it is certainly worth the effort.

    Have you been going to auctions and foreclosure sales? Consistency is the key with auctions.

    Keep at it and you will succeed!

    Good Luck,

    Mike

  • Real Estate Investor · Cebu, Philippines · Member since 2008 · 297 posts · 5 votes
    17y

    [b].Have you been going to auctions and foreclosure sales? Consistency is the key with auctions.

    No I dont know much about that.

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