All Forum Posts by: Craig Curelop

@Kody Brown - It all depends on what your current mortgage rate is?  Paying off a loan whose interest rate is below 5% is only getting you a 5% return on your investment. Now, this is a GUARANTEED return. But even still, that's not enough to get me excited. 

With real estate, you'll ideally be buying cash flowing properties where your tenants will be paying down your mortgage all while you build equity in the property. This will likely get you a a much higher rate of return than paying your mortgage off will. 

You can use the cash flow from your new properties to pay off your mortgage. 

Hope that helps! 

@J. Martin - I'll be there this year! 

Lots have changed since last year. I moved to Denver, started working at BiggerPockets, and am now house hacking a duplex. Met some real awesome people last year so definitely looking forward to it again this year. 

@Jorge Jimenez - a 1031 exchange allows you to sell your property and use the proceeds to buy a larger property while deferring the taxes. 

There is a lot that goes into it and you'll need to talk to an accountant or someone with experience doing it, but that's the gist. 

@Jorge Jimenez - You have an interesting situation. It kind of depends, do you want to live in the condo for cheap or do you want that lump sum to invest in a property elsewhere? From the sound of it you could: 

1. Buy the condo from your brother. Take the next 6 months to a year to fix it up with value add renovations (if the HOA allows?). Then maybe you can sell it fully and 1031 exchange it into a bigger investment?

2. If you want to get into the rental game sooner (as in NOW), then it make sense to sell it with your brother, take that lump sum and do a house hack somewhere else. Which then you'll likely have to fix up and rent out (BRRRR strategy).

Personally, I think I would do the first option. Buy the condo at a relatively cheap price from your brother. Do some value add renovations (fix some things). Then, in 6 months if you have the opportunity to buy another property, do it! Maybe you house hack a duplex and rent out the condo. If you can't buy another property in 6 months, 1031 exchange the condo for a larger property. 

@Susan Brown - I like the idea of holding on.  With only ~$400 a month of expenses (maybe ~$600 after reserves), it sounds like you'll be cash flowing at least ~$300 a month. Not to mention, you'll be paying down your mortgage as well. 

I wouldn't worry too much about a high end multi-unit development that's 2 miles away. Sure, it will take some of the people. But all you need is one family. Many times families do not want to live with a million people in a large development. They want the privacy of their own home. It sounds like you offer a dramatically different living experience. 

My suggestion would be to try renting it out for either a 6-month or year lease? Then if it doesn't work, you can decide to sell it then. 

@Felix Yam - It is silly to try to "time" the market. If you do that, you're just gambling, it's not investing. 

If you have the capital to get started, my suggestion would be to call a few lenders, call a few agents and start searching for a property that works for you. There are deals out there, they may just be harder to find in your market. Maybe you go a little bit outside of San Diego where properties are a little more affordable?

Either way, my suggestion would be to purchase a property (maybe a house hack?) for your first one. Save, save, save so you can purchase another one next year and the year after. If you purchase a property every single year, you will buy when the market is up, when the market is down, and everywhere in between. That way you mitigate your market risk. 

As long as the property cash flows and you can cover your debt payments, you'll be fine. My suggestion would be to stop trying to look for THE BEST deal and get a deal that works for you. You'll be searching for THE BEST deal for a very long time. And when it does come along, what makes you think you'll be in a position to get it over the next guy? 

If you find that property, where you can service the debt payments, you will be in a much better position than if you sit on the sidelines and try to "wait" until the next crash. 

@Thao Kieu - I am in the process of getting my license and am using the Colorado Real Estate School. If you're looking for a higher quality education, this is NOT for you. 

If you are looking for a very inexpensive way to pass the test and get your license, this one is for you. 

If you want your license to be an agent as a full time job, I would not recommend this program. But if you just want access to the MLS and want to be your own agent, I'd recommend these guys.

@Chelsea McDuff - I live in Denver and the market here is also HOT. Though, my strategy is not to try to speculate on the markets and invest in whichever area I deem is "HOT." I think a wise strategy is to pick a market that you enjoy living in and purchase a cash flowing property every year. That way, you buy at the top of the market, you buy at the bottom of the market, and you buy each year in between. Now you're mitigating any market risk. 

The key here is buying a property that cash flows. Then it really doesn't matter what the market does. 

@Desmond Price - you bring up a great point. The returns on the market this past year have been incredible. However, seeing 16%-25% returns on the market is not going to continue. Seeing those returns in real estate are absolutely possible year over year as you have the 4 wealth generators working for you:

1. Cash Flow - Receiving rent from your tenants irregardless of whether the market goes up and down. 

2. Appreciation - While year over year, housing prices may fluctuate, in the long term, they will increase. Companies could go out of business leaving you with little or no return. Not to mention, you can always force appreciation into your property. You don't have that type of control in the stock market. 

3. Loan Paydown/Leverage - Your tenants are paying down your mortgage AND you can buy a property with as little as 3% down (0% if you're a veteran). That's a very high (or infinite) cash on cash return.

4. Tax Advantages - Uncle Sam rewards homeowners with tax breaks. I am not a CPA, but I know that one of the biggest benefits is being able to deduct depreciation. So your property could actually be cashflowing you month over month, but to the government, it shows that you are losing money. So you will not be taxed on your gains. Those losses carry over to other forms of income as well. 

@Jo Rut - Have you tried using postlets? 

The site allows you to create one advertisement and then export it to all of the major listing sites (i.e. Zillow, Hotpads, Trulia, and Craigslist). This worked for me perfectly.

I would also recommend getting professional photography if you don't already. The ~$100 you spend on that is well worth it and you can reuse the photos for next year so long as there are no significant changes to the property. 

If all of that doesn't work, it maybe makes sense to lower the price by $50-$100 per month?