All Forum Posts by: Aaron Taylor

Go to realtor.com and search for houses for sale only for Stilwell, KS. That will show you exactly where the urban area ends...tons of red dots? Urban. No dots anywhere around? It's out in the country.

0 Votes

What size of units, 1 or 2 bedroom units? It also kind of depends where in Stilwell it is, like if it's not actually in Stilwell and is basically part of the urban area it would be worth more than if it was in Stilwell or south.

Rural 1 bedroom units outside the KC area don't rent for much (nobody has any money). For instance, there's an 8 one bedroom complex in Olathe that went up for sale yesterday and the rents were $495 to $625 on it ($625 is market for it). They were asking a 6.5% cap rate on that, fyi. And that's in the city. So it would really depend on the unit type and location.

0 Votes

For me it was picking an area and then trying to get something before it disappeared. When doing your first property, it's hard to buy something that needs lots of work (unless you have lots of free time), so you're stuck looking at undervalued nicer properties that don't stick on the market long.

What made it hard for me is that both myself and my wife needed to look at the property before buying, and with kid events every night the time to go look was super limited. Deals that lined up with those times were also limited, so it took good fortune for both of those to finally line up for us and make a deal.

1 Vote

Originally posted by @Joseph Beazley:

@Aaron Taylor Thank you for the information! Any particular books or podcasts you would recommend?

Books are above, for Podcasts:

Bigger Pockets (both shows)

Rental Income Podcast

Cash Flow Connections

Real Estate Investing for Cash Flow

Cash Flow Guys

The Bigger Pockets ones are the ones you should hit first though. They're all very high quality with lots of good information.

1 Vote

Set For Life

Rich Dad, Poor Dad

Cash Flow Quadrant

The Book on Rental Property Investing

Millionaire Next Door

The ABC's of Real Estate Investing

Finding and Funding Great Deals

Build a Rental Property Empire

Tax Free Wealth

Tax Strategies for the Savvy Real Estate Investor

Real Estate Note Investing

The Book On Negotiating Real Estate

I have others, but those were all pretty good.

2 Votes

Education. Read, read, and read some more, and listen to a ton of podcasts. Start analyzing a ton of properties in different areas, learn where you want to invest. Get yourself educated so when a deal does pop up, you're ready for it.

0 Votes

Originally posted by @Justin McFarland:

@Aaron Taylor Federal Housing Administration (FHA) loans were created to promote homeownership. These loans have lower down payment requirements and more liberal underwriting standards than most conventional mortgages. Because of their stated purpose, FHA loans are, for the most part, restricted to buyers who intend to occupy the houses they are purchasing. An FHA loan typically cannot be used to finance a second home, a rental home, a vacation home or investment property. However, there are a few exceptions to the general rule.

People are not going out and buying investment properties with a FHA loan in mass. While there Is little equity it is also there primary residence and without this option most people could never afford the down payment.

Read more: Can FHA loans be used for investment property? | Investopedia https://www.investopedia.com/ask/answers/112515/can-fha-loans-be-used-investment-property.asp#ixzz5OgHoTez8 Follow us: Investopedia on Facebook

Oh I totally understand that, the one post just mentioned that we aren't overleveraged and I was just pointing out that 25% to 40% of the loans made today are at a high leverage point. Not that it means anything other than maybe people are being stretched a little thin possibly, and if housing dropped you could have a large number of homes under water mortgage wise.

2 Votes

Originally posted by @John Kunick:

@Kraig Kujawa, totally agree about resting easy via cash flow.

Here are other key things perhaps many on this thread will consider about how different we are now vs. 2007:

1. The real estate bubble in 2007/2008 was primarily based on government-induced loans that were then backed by government via taxpayer. In short, due to government intervention in the market place and the consequent greed, money was too easy to get. There were people getting loans that had no business getting loans and the house of cards fell. This is not currently the issue. While loans are easier now than they were five years ago, they are nothing like it was in the early-to-mid 2000's. No comparison.

2. Those people that were getting loans that shouldn't have, are now renting and that has propped up the rental demand and thus the cash flow for investing.

3. Savings rate - In mid-to-late 2000's, the savings rate was 1-2%. It is now almost 7%

4. Not all markets are like California - Like many have commented on this thread, CA seems to be out of bounds. Perhaps there are other markets like that. But, there are still many markets where real estate has acted normally the last ten years. Even in Tulsa, where I own a significant portfolio of SFH, the prices still have room to run up. Sure, they are not as attractive as they were after the crash, but there are still bargains to be had - and rents have increased as prices have gone up.

5. Equity - In early 2000's there was very little equity in most rental properties (and real estate in general). That is not the case now perhaps due to loan requirements. This will curb panic selling should a recession hit.

So, all in all, I see a lot of differences between now and 2007. That is not to say that a recession or correction might not take place (they are usually psychologically driven), but I do believe the fundamentals are significantly different now

For #5, the equity thing, there are a large number of FHA home buyers who have very little equity. A couple websites mention 25% to 40% of the home purchases are FHA, that would seem to imply that there are a large amount of homes with low equity. I'm not saying that it's like 2007 or anything, but people are buying a large amount of houses with very little down.

1 Vote

It feels to me like people are chasing gains because of how low the interest rates are. Stock market, housing, heck even my collectible items are accelerating up as people search for somewhere to park their cash that might make something over normal interest rates.

It doesn't seem like it's ready to slow down yet on anything. Earlier this year it felt like it was until the tax cuts kicked in. The one thing makes me a little uneasy about this cycle is how everyone is buying outside their area. Internationals are buying California, California is buying the midwest, the midwest is getting too expensive, etc. Like when I talk to an agent in KC and he tells me that two buyers from Cali are buying up all his properties, that seems like behavior that isn't sustainable longer term, as the economics from one area are going to price out the economics of the other.

6 Votes

I have to admit, the title of this thread made me laugh a little. Let's hope that it was pet and not a person responsible, lol.

0 Votes

All Forum Posts by: Aaron Taylor

Aaron Taylor has started 3 posts and replied 148 times.

Post: Guidance for Multifamily in Stillwell Kansas

Post: Guidance for Multifamily in Stillwell Kansas

Post: #1 thing that prevented you from doing your 1st deal?

Post: Early steps to take before investing?

Post: Early steps to take before investing?

Post: Early steps to take before investing?

Post: It's Feeling a Lot Like 2007

Post: It's Feeling a Lot Like 2007

Post: It's Feeling a Lot Like 2007

Post: Fleas in an apartment: Who's responsible?