All Forum Posts by: Chris John

@Nathanael Tinaya

This is a total guess based on the numbers presented, but I think you'd be pretty exposed if you purchased a million dollar property that generated 8k a month with 100% financing (between the first and the HELOC). Rates are pretty high right now (based on the past couple of years, not historically) and I don't think you'd have a ton left over each month to cover the BS that occasionally arises with being a landlord.

Also, arguably, prices might be dropping and interest rates might continue increasing, so you might find yourself in a worse financial position in a year or two with being upside with higher payments.  A tenant or two skips a couple of months payment and the wheels might come off if you don't have proper liquidity.

Again, this is just a guess and I'd definitely kick the tires on it to satiate my curiosity if I were you.  If the numbers aren't good enough, don't be afraid to keep looking though.

Good luck and best wishes

@Austin Smith

Commiserations from CA.  I could've written a nearly identical story out here.  Lesson learned and my new money is going to Florida.  To heck with these states making the owner financially responsible for themselves and the tenants while the tenants don't even have to be responsible for themselves.

Good luck and best wishes

I have a family member that is a well enough known YouTube personality that he's making insane money (at least imo).  He's friends with a lot of these influencers.  The ones he's friends with are extremely smart and savvy.  They know their value, negotiate incredible product placement fees for their videos, etc.  They are a brand and a business and they know it.  I can't speak for the other personalities outside of this circle though and I know that "birds of a feather", but I suspect there's a lot that are like them.

@Scott Mac hits on a great point in terms of tax avoidance though.  It's definitely a consideration that this group considers and many of them will absolutely turn this into generational wealth.  Again, can't speak for those outside my family member's circle of friends.  I can confirm that they do discuss these types of things though and it's remarkable how much they make...

@Matthew Swearingen

If you insist on overpaying the mortgage, I hope you at least put the overpayment into a liquid,side account in case things go south for you instead of sending it to the mortgage company every month.  If you overpay your mortgage by 30k, lose your job and quit making payments, you'll get foreclosed on.  If you keep the 30k in a side account and lose your job, you'll have some money to buy time with. 

Most likely, the side account will make a higher return than your mortgage rate, so you'd probably have enough money in the side account to pay off the mortgage before 15 years anyway.  Win-win.  You keep liquidity and can probably pay it off even earlier than overpaying straight to the mortgage company.  Just a thought in case you are sending a check each month directly.

@Daniel Fuentes

If you can find an amazing deal (seems really unlikely as much as everything is being picked over right now) I'd pull the trigger.  Most likely I'd dollar cost average into equities and wait for the market to become more hospitable.

Good luck!

@Kyle Curtin and @Eliott Elias

Interesting perspectives on inspectors.  I feel like I've had both kinds of inspections depending on the inspector. 

In the end, I love Kyle's attitude though.  I've learned so much from just speaking to people in the trades that it's ridiculous.  I'm dumb as a box of rocks and have found that if you engage them in a friendly and respectful way, they'll drop so much free knowledge that it's ridiculous.  Having said that, that knowledge is probably ubiquitous and I'm probably the only person that doesn't already know it.  haha.

For instance, my tile guy talked me through subcontracting my kitchen and bathroom renovations by myself.  He even gave me contacts to other guys in the trades whose work he respects.  Saved me tens of thousands of dollars off of the estimates I'd received just because we started small talking over some beers after he came out and bid a project.  I love that guy!  haha

@Bruce Woodruff  I'm not sure we're in 100% agreement on how bad this market will get, but you're right on with the "buy when people are scared" philosophy.  Sadly, it looks like my next year of cash flow will be going towards renovating units, but if it wasn't, I'd be all over dollar-cost averaging into equities right now for that very reason.

@John Carbone  I think you just laid out my future strategy for me, thanks!  I'm beginning to equate buying real estate with working around the actions of the Fed in the same way that I equate buying stocks with working around the actions of the mutual funds buying and selling them.

The Fed and mutual funds create the waves and I just try to surf them... if only I could actually surf.  :(

@John Carbone

Can't argue there.  I'm just glad that I came across BP early enough to take advantage of the equity when it was there. 

Or am I?  haha.  Maybe I drove off a cliff and just don't know it yet...

:(

@John Carbone  I agree with the sentiment, but not that the equity was mythical.  Maybe it wouldn't have spawned into existence without government intervention, but spawn it did.  Even if all the gains go away, it was here and it was real.

@Jon Kelly hit the nail on the head.  There was nothing mythical about the equity.  It was real equity that many of us are thankful that we refinanced out and used as down payments on other properties at insanely low, fixed rates.

@Mike Dymski hit the nail on the head too (like always).  It's a sick game, but in today's world, working hard and saving is for saps and suckers.  It's all about borrowing and redeploying.

I loathe the game, but I'm so thankful that I game across BP during the pandemic so that I could learn to play it as I can honestly say that I don't think I would've figured it out on my own. 

Truly, I owe this site and many of the members that are so willing to share their wisdom and knowledge a huge debt of gratitude.