All Forum Posts by: Account Closed

During last recession, some people had their houses forclosured because they could not afford the mortgage payment, but not all of them.  I knew many people (some of my friends, friends' friends, or friends' relatives) didn't lose the jobs, they were able to make the mortgage payment, but they still chose to walk away because the debt they owned the bank were much higher than the the market value.  They thought it "was" a saving.  For an example, they bought the house at $500k with $480k loan, the house price dropped to $200k, they chose to forclosure or short sale it.  They thought it "saved" them $280k loan debt.  Ended up with a bad credit, lost the house that the equity could have been come back today, flushing the rent money to the toilet instead of paying the mortgage many years after it.  I don't think that was a smart choice.  

Looking forward for the new topics of “how do survive the next downturn?” instead of crash coming weeks. :)

I purchased those 20 additional properties using hard money loans a few years ago.

@Manish A I had a similar negative cash flow situation a few years ago. A few years ago, originally I had about 10 rental total positive cash flow $2000 to $3000 per month. Then I purchased 20 additional properties using leverage, each of those 20 properties was $100 negative cash flow per month. 20 properties means $2000 negative cash flow per month. But my original first 10 properties was about $2000 to $3000 positive cash flow per month. Overall, all 30 properties was about zero (break even) cash flow a few years ago. I had my W-2 income at that time. Today, a few years later, rent have been raised a lot, all 30 properties are positive cash flow. Positive income coming in each month now. I quit my W-2 job one year ago.

I started everything from zero, from scratch. I didn’t get any help from my family, relatives or friends. Since I got my college degree at 22 years old, I was working one full time and two part-time professional jobs, more than 70 working hours each week, made 6 figures income salary since I was 22 years old in the 90’s. I could save money easily from my 3 jobs (6 figures yearly income) and used it as down payment to buy houses.

Real estate is a game that, you can speed up the progress if you have money. Money makes more money. If you have no money now, Do you like studying? Do you plan to get a college degree? At your age, one way to prepare to get into real estate is get a college degree, try to get a high W-2 paying job, keep excellent credit score, save down payment from high paying job, it will get you the first, second, more and more properties pretty soon. What if you don’t like studying and don’t want to go to college? Another way, be a carpenter or other real estates related job, but it may take longer time to save the down payment for multiple houses if you don’t have a high paying job.

Last cycle, I heard people said houses were expensive since year 1998, the bubble last 8 years, peak in year 2006. People started saying housing were crazy in year 2000, but more people buy crazier houses the next 6 years. We saw record breaking every quarter since the bubble talk last cycle.

Yes, housing is crazy right now. But it is just the beginning of craziness, will have more and more crazy record price before a correction come. Many people are still very conservative today. Many people are not crazy today yet. At the time everyone is crazy about that housing, that’s the time of the correction. The craziness will last at least 2 to 5 more years. Enjoy the housing party and make more money for a few more years.

1/2000 property is a good deal, does not mean all the other 1999/2000 properties are bad deals. The 1999/2000 properties include bad deals, acceptable deals, market price deal, higher price renovation deals for owner-occupied etc. :)

Wait until 2019, vacant the unit, rehab to sell for big cash. My past experience: 1. Hard for showings with tenants in place. 2. Limited to Investor with tenants in place. 3. End user - Owner occupied is willing to pay higher price than investors. 4. Housing market is still on the rise, will rise for at least 12 to 24 more months. Too early to jump off the train now. House price will be higher in 2019 than 2018. 5. After rehab, sell for top dollars.