All Forum Posts by: Michinori Kaneko

what about vacancy and repairs? any upfront fixes needed? who takes care of the yards?

@Peter Fennig what kind of property do you invest in that gives you 7% rent increase per month? lol jk 

which zip in FW do you invest? I am looking at FW area as well!

@Mandi Martinez you're welcome that's what BP is for :)

glad i could help :) cheers!

@John Kim nice job! I used to live in Jersey City, now i'm in queens. I bought my coop around end of 2014 (around same time you purchased!) and the property has nicely appreciated too, so I actually was thinking of similar line but here were things I considered:

1. your current interest rate is probably much lower than what you can refi for. 

2. Can the cashflow from your new investments outpace the reduction in your cashflow from your current property (not sure how much you are trying to refi out, but if you got 75% refi your interest payment every year more than doubles, would you still positively cashflow on that property? even then, with that kind of equity you can probably easily beat the decline in cashflow from your first property with new cashflow from your new investments).

3. I would invest out of state.  you and I enjoyed a great appreciation in our property, but that means all the properties in the area also appreciated.  In other words, all the properties in NJ/NY areas are expensive.

4. if you are going to take the HELOC route, make sure you get a fixed rate one. rates are about to go up more.

5. be ware though if you leverage too much on your primary resident and IF the housing crashes in the area then you may get into trouble...

Hope that helps!

Seems fair to me, except maybe for younger people credit score may not be as applicable.  For younger people who are still building their credits, if they have a higher score it probably just means they were on their parents account anyways. 

One of the things PM that i spoke with did was assigning points to criteria.  you give them score of 1-5 based on each of your criteria (e.g. 5 points if credit score above 700, 4 if 650+, 3 if 600, etc. ) and have like a minimum score you have to reach to qualify. Just a thought. 

To John's point, you want to check about utilities. Also is 7% vacancy a good estimate? typically MFH has higher vacancy than SFH. more CapEx and repairs as well.

5% interest might be a little tough to get right now.  Check your property tax numbers too, you pay $1400 in a year which is only 0.6% of your purchase price, which may be reasonable for TX but i'm not sure....?

I think if you are living there yourself you can still count is as a "income" because you are basically not paying rent for wherever else you would be living if you didn't live there. 

One other thing is description says one side of duplex is fully updated.  I assume your $25k upfront fix is for the side that's not updated? Maybe there are foundation problems or something that's keeping other investors away?

If all of these points are validated i think its a good deal! 

Ok Patrick, your opinions are your own, but world is a zero sum game.  your profits are someone else's loss.  your deals are someone else's loss. you would not invest in a property that breaks even or hold onto it.  You can call me child like and laugh at what I say, but you and I are doing the same thing, which is maximizing profiting for our own financial success. You aren't being a landlord out of your kindness to provide housing to your tenants lol you can choose to call that whatever you'd like.  

Anyways, that's not what I wanted to discuss.  If you are only here to provide negative comments feel free to drop out of the conversation. 

@Mandi Martinez it depends right? you are not investing all your $65K into one property.  you can probably buy 2~3 properties with that amount of money (unless you want to go into even riskier investments). so think about $600~$900 a month.  that's a whooping $6000 CASHFLOW on your $65K investment.  that's almost 10% return, which doesn't include property appreciation and repayment of your principal.  Note a 2% appreciation on your property is a 8% return on investment to you if you only paid 25% for your down payment.  

here's the best part, once you cash refi out, you will get your initial $65K back (hopefully).  at that point, you still own the properties that generates $600~900 a month (maybe a little less since your mortgage will be higher now).  you get to use that $65k to buy another 3 properties, not to mention you probably saved up some of those cashflows.  

investing in rentals is not get rich overnight.  if you want quick money, flip is probably better (although there are good and bads - flip is a one time gain where as rentals are more of perpetual income or like an annuity). both requires time and lots of work to make it happen.  but that's why we get ahead of everyone else right? because we put the work in that others are unwilling to :) 

Mark in my original post I did not mention AI at all.  like i said, you don't need an AI to replace most jobs.  maybe i said "robots" and that made you think i was referring to AI.  

if there were true artificial intelligence, then i don't think any of us would have a job anymore, except for very limited number of people. This is not what I'm talking about though. i'm saying even without an AI, most of the low income jobs can be replaced by simple machines.  and if that happens, those people who are currently renting will no longer be able to afford rent and we will have no tenants.  that's all i'm saying.