All Forum Posts by: Stone Jin

Flipping is a job and stocks is passive.  If you don't know what you are doing they are both risky, if you know what you are doing then either can be less risky.  

@Vik P. some of those are pretty rough zip codes.  I'd be cautious buying anything there.  

The one thing we can be certain of is that the past is not an indication of the future.  Neighborhood with massive growth in the last 5 years may not have massive growth the next 5 years.   You probably don't want to buy in A neighborhoods because if there is a downturn you don't have a large tenant pool, if you buy in B neighborhoods you have people moving up and moving down.

We only buy houses we would be comfortable living in ourself, not just the neighborhood.  Works for our strategy.

I'm not a tax guy, but my understanding is the flipping is active income and not passive so it's not capital gains, it gets taxed as normal income.

100K may not be able to buy something in the markets you want, but 100K can buy something in a B+ neighborhood in a tier 2 tier 3 city.  Sounds like you are looking to invest outside of the area you live in anyways.   Also if you have 100K cash, then you can buy 3 130K houses, for 2 200K houses, if you only have 20-25k cash, I would try to figure out how to get more cash before plowing into a rental.  You will need some reserves for when the AC goes out.   Lastly when starting out set your expectation on cashflow, you will not get rich on your first property or second or third.  However if you keep at it, one day you will be pleasantly surprised at the cashflow and debt pay down and appreciation and your net worth.

I would agree with @Russell Brazil that real estate is super forgiving over time.  We bought primary homes in 2005 and 2006 in Phoenix, got pounded in 2008.  The one we bought in 2005 went from 235 to 290 from 2005-2007 and then from 290 to 160 by 2011, but now in 2018 it's around 250.  My mortgage on it went from 170K to 125K over the 12 years, it doesn't cashflow great, but when the mortgage is paid off I will cashflow 13K a year from it for the rest of my life. 

The one we bought in 2006 was a condo conversion, so we paid 160 in 2006, went up to 240 in 2007-2008 and then down to 110K, we sold it last year at 180.  The moral of the story is that even if you buy high after some period of time, the damages are either not so bad or you actually come out ahead, but if you keep waiting on the market to drop like 2008 you may not have enough time left to take advantage of time

@Kellen King, in the east valley and SFH?

@Chad Pinchot Are you finding houses that are at the 1% rule in Phoenix on MLS? I'd like to see how you are doing that as I haven't seen the 1% rule in quite a few years.

I give out my cell phone number, if I'm self managing I want to know if a water pipe burst at 2 am so I can address it.  Most tenants are reasonable and do not text me unnecessarily.  At end of the day the houses are your responsibility and you need a way for your tenants to get ahold of you.

The way I look at it is that it makes life easier for me not to have an extra email or vmail I have to monitor.   

@Shiloh Lundahl looks great!!