All Forum Posts by: Joe Villeneuve

Quote from @Polat Caglayan:

How much do I need to invest for a house and a thousand dollar income?

That's like asking how much it costs to buy a car.  You seem to be asking a lot of questions, looking for quick shortcut answers.

First, all properties that appreciate the appreciation is based on the property value, not the equity.  The equity is actually what you are paying for the property.

In this case let's look at the numbers that count,...the current numbers.

You have about $500k or more in equity, which is buying you a property that's worth about $700k (I went with the lower PV.  At the higher PV, you have $5k more in PV and equity).

Your CF is around $20k/year, which sounds great, except when you introduce the equity into the discussion.  IF you cashed out you'd walk away with around $400k.  If you kept the property, and accumulated the CF/yr, it would take you 25 years to get that same equity that's sitting, frozen in your property.

Also, if you cashed out and used that same equity as a DP on different RE, at 20% DP, that equity would buy you $2M in PV, not just $700k,...and, I'd be willing to bet, you could find new RE that would have a yearly CF well over $20k/year.

On top of that (remembering my initial statement above), any appreciation applied would be applied to $2M, not just $700k.  Assume a 5% appreciation, and the new PV would be $2.1M vs. just $735k.

I answered this on one of your other posts looking for the same thing.  It doesn't work like that. Every Market (Detroit) is made up of a series of Micro-markets (neighborhoods) of which they are all different in cost, value, cash flow, rents, etc... On top of that, all of these things have micro-markets (1000 sq ft houses) within the micro-markets. All of these things change over time. Some get better, some worse.
The answer isn't a quick "go here" an invest. To get the answer, you have to learn how to analyze markets to find those micro-markets...like every other REI has done in the past, still does today, and will do in the future.

Quote from @Polat Caglayan:

Can you give me a few examples of where and what kind of investments I should not make?

Not really.  It doesn't work like that.  Every Market (Detroit) has a series of Micro-markets (neighborhoods) of which they are all different in cost, value, cash flow, rents, etc...  On top of that, all of these things have micro-markets (1000 sq ft houses) within micro-markets.  All of these things change over time.  Some get better, some don't.
The answer isn't a quick "go here".  the answer is for you to learn how to analyze markets to find those micro-markets...like every other REI has to do.

Excellent...but you have to know where to invest.

How much cash have you put into the deal so far?

Quote from @Ryan Cousins:

Quote from @Joe Villeneuve:

None of what you mentioned answers your question.  You left out the most important number.  How much equity do you have?

 @Joe Villeneuve around 300K of equity in the house

Sell the house, take the equity, spend it or use it on your next house where you are moving to.

None of what you mentioned answers your question.  You left out the most important number.  How much equity do you have?

Quote from @Bruce Reeves:

Geez, I'm just trying to get a second look at my math for the current situation. The other non-math issues I'm good handling myself. 

OK.  The math tells me you should have sold the property a long time ago.  Here's a big "math" you overlooked for quite a few years.
Right now $388k in equity, minus (let's go all out) $100k in closing costs, gets you a walk away of $288k in equity.
Use that $288k as a 20% DP, and you should have $1.44M in property value,...not $415k.  Now, what kind of CF do you think you could have with that much in PV?
What REI don't get, is equity is actually what you are paying for a property. The higher your equity gets on a single property, the more you are losing money. Equity is actually what you are paying for a property.

Quote from @Jenna Schulze:

Quote from @Joe Villeneuve:

Quote from @Jenna Schulze:

Hi! I am starting to become involved in real estate investing and I am looking between two cities in Ohio to purchase my first property (hopefully a duplex). Through my research, it says that Cleveland and Toledo are both good options for real estate investing. Which one is better? Is there a city that's better than both of these in Ohio? I do need a property that is not very expensive, which is why I have been looking into Clevland due to their low selling prices and high appreciation rates. 

Specifically, what research results told you these were two good cities to invest in?

 I read it on realestate.com and Ark7. Are these good sources?

Ark7 looks like a partnership platform.  I see no value in it for evaluation.
Realestate.com has always been a good site for accessing properties, but they do a poor job of evaluation.  They evaluate mostly as a RE Agent would, selling to a homeowner.  Those are very different evaluations for what a RE Investor needs.