All Forum Posts by: Justin Buckner

I'm wondering where the usual ACTIVE contributors are on this post. I'm also wondering how some of the ones that are posting here, are ignoring the ignorant posts on this thread.

Any person who enjoys the luxuries of America must accept that they are eating the fruit of the FREE labor TAKEN from enslaved people. So, for any of these people to complain about America wanting to help disadvantaged citizens because it is 'taking away from other citizens through taxes' is delusional and ignorant.

And the thought that comes to mind is how MLK Jr's 'Letter from Birmingham Jail' still rings true:

"First, I must confess that over the last few years I have been gravely disappointed with the white moderate."

"Shallow understanding from people of goodwill is more frustrating than absolute misunderstanding from people of ill will. Lukewarm acceptance is much more
bewildering than outright rejection."

"all too many others have been more cautious than courageous and have remained silent behind the anesthetizing security of stained-glass windows."

"We will have to repent in this generation not merely for the vitriolic words and actions of the bad people but for the appalling silence of the good people."

Thanks for sharing! It'd be great to learn more about how you financed the deal (savings, 401k, loan, partnership, etc). How much did it cost to buy into the deal (down payment, closing costs, etc)? How did you finance it?

The info you provided already is very helpful! I think these additional details would be even more helpful for aspiring investors - as financing the deal is often where people get stuck.

 I really wouldn't waste my energy on them

Do you have any advice for a new investor, who works a 9-5 and has no other income streams, on how to offset the risk of a bust? I am considering a househack on a duplex as my strategy. I'm looking for ideas on how to handle a potential bust cycle and prevent it from blocking my progress towards acquiring a second property. In the worst-case scenario, I might have to deal with negative cash flow and stay in the property longer than planned, delaying my second investment until I find a good solution. I would appreciate insights from experienced investors on potential exit plans or strategies you'd leverage if you found yourself in that situation.

My favorite part of this post was how you finished with: "I won't rub your ego", after paragraphs of attempting to rub your own. That was great. I understand supply and demand. My second favorite part is how you never addressed the actual question and main point of my post. Which is, 'yeah there's a small (or if you prefer NEGATIVE 100% ) chance of a 40% price reduction, but WHAT IF it does happen? What type of situation would a first time investor be in? And what would be your strategy for making the most of it?"

So regardless of how ridiculous it is in your mind that I believe prices could drop by 40%, please, step off that horse, place your ego on the special shelf for special things, pull out your 'crayola font' for this one and explain as if you were explaining to a '3rd grader'.

'it just blows my mind' how people have so much energy to attempt to share how smart they are and ridicule the question without answering it. I don't mind you insulting the question or me for the question, but if you do that, at least answer the question. 

I am new and do not have experience in RE investing. I have been reading and trying to make sense of how to invest in real estate. I see red flags and my gut says the market will start tanking by this time next year. However, I meet experienced investors and some say "wait, now is not the time to jump in", and others say "you can't afford to NOT be in the market now".  I look to the biggest companies in America and see that they are setting records in the amount of cash they are hoarding. I see headlines of successful investors selling stock to stockpile cash. Then I meet lenders and realtors that say "now is a great time. You need to get in the game"

I see people are bending the 'rules' of the game to make the current real estate market make sense. For example, I've been told that the 1% rule is unrealistic these days and was only relevant in 2016 and earlier. I see in this thread people suggesting that the negative cashflow doesn't matter and to instead focus on appreciation.

Then I read The Book on Rental Property Investing by Brandon Turner saying the exact opposite (quoted below).

All of that to say, I want some help lol. And please don't go crazy about me asking a what if/hypothetical and get on a soapbox about all the long lists of what ifs that we could come up with. I'm talking about one what-if here in hopes that we can do some risk management and think through a potential worst-case scenario.

The scenario: I am purchasing my first property - a big SFH or duplex, with an FHA and I plan to househack the property the first year, make minor improvements, rent it out, and refinance, and then repeat.

What are the obstacles/cons that I will face IF at the end of year 1, my property has a market value of 60% of what I bought it at and the market rents are 60% of my monthly mortgage payment? How would this impact my ability to get my next property? Again, I am inexperienced and am just trying to understand the situation I'd be in if that were to happen, and brainstorm potential strategies to use in that situation to make the best of the situation.

The quote mentioned above. Quoted directly from The Book on Rental Property Investing by Brandon Turner: "Great wealth has been built through appreciation, of course. I know numerous homeowners who bought a simple home in California 20 years ago and are now millionaires because of that one purchase. Appreciation is a powerful tool and something investors should seriously consider.

However, as great a generator as appreciation may be, it does have a dark side. In the early 2000s, the real estate market across the country was “appreciating” like crazy. People bought terrible properties and made a killing just on the appreciation. They began losing sight of the math behind an investment and simply bought whatever they could because they could always sell it for more later. “Who cares if the property loses money every month?” they thought. “I’ll just sell it in a few years and make so much more!”

This “greater fool theory” of investing eventually caught America with its pants down.

Prices stopped climbing, unemployment grew, and individuals sud denly realized that they were no longer holding on to investments but rather playing in the world’s largest game of legalized gambling—and they had just lost. This plunged the world into the greatest recession most of us had ever seen and caused more than four million completed foreclosures.

There’s no denying the incredible role appreciation has played in investors’ lives, but there’s also no denying the risk involved in relying on appreciation to make a profit. I recommend that, instead, investors view appreciation as icing on the cake, a bonus that will assist in the investment but is not the basis of that investment. Investing in locations where appreciation is likely is a wise move, but I don’t recommend investing in a bad or marginal deal in hopes that appreciation will bail you out. This is known as “speculating,” and it isn’t much better than getting in your car, driving to Vegas, and betting all your money at the poker table.

Will prices continue to climb because of inflation, scarcity, and greed? I have no doubt they will. Appreciation will make millionaires (and billionaires) out of certain people reading this book, but your deal analysis should not assume it. Treat appreciation for what it is: a possible reward for an investment done right."

Thanks in advance to whoever took time to read all of this and reply.