All Forum Posts by: Jonathan Stone

Quote from @Steve Morris:

Well, there are more Sec 8 voucher than LIH properties with LURAs, so the rents paid do need to be close to market-rate, hence the annual HUD studies on what is FMR for their part of the payout.

 Steve do you intentionally rent to any Voucher holders in the Portland Metro.

A few questions:
Did you save the 10k and are you able to continue saving a some consistent rate? Do you have any special skills you can utilize? Is there an end goal when you get to 100K? Are you looking for quick cash and a full time job? 

Assuming this is a 1 time lump some of 10K you received and you have no other money to invest. I would begin by reading 3-4 books a month for a cost of maybe $500 and a library card you can gain a ton of knowledge in a year or less. Asking questions here on BP and running numbers through calculators to analyze deals. If you are planning to invest local to you, which is my only experience, ask a real estate agent for a copy of a purchase agreement and start reading through it. Deal analysis and selling skills are the two primary drives I see in the REI space. As you grow your ability value add is a very high level skill that relies on both of those skills.

Your signature calls out the state of Washington. I am in Oregon and understand that real estate on the West Coast is very expensive and likely 10K wouldn't work as a 3.5% down FHA but I would suggest looking into those type of loans. The option of buying a property as a house hack with a low down payment loan is likely the best use of your capital as the return is so high and the barrier to entry so low.

Niko,

There are a ton of great books out there on this subject. For number crunching and a first book I would strongly recommend ... Frank Gallinelli's What Every Real Estate Investor Needs to Know About Cash Flow ... And 36 Other Key Financial Measures. As a new investor new in the work force I would also Strongly recommend Scott Trench's Set for Life  Which is not about the numbers but the mindset, you may already have the mindset but I think it's worth the read. There are also a few local meet ups that you may want to check out in South Western Washington and the Portland metro. Those folks do talk numbers and sometimes do deal analysis at the meet up.

Quote from @Tim Ryan:

Buy a rental property first and keep renting for you. It's not true that renting is just "throwing away your money". That rental will help you qualify for a better house in a couple years. So much more I could write about this, but think about it and really run the numbers.  I want the new "American Dream" to be "Owning Rental Property".  Your primary residence should NOT be your largest asset (it's a liability actually). Read Kiyosaki and listen to Cardone...

 I have heard you say something similar in a few posts. I do agree that adding rentals to your portfolio is better than buying newer or more expensive personal residences. But the option to buy a personal home with a low interest low down payment government backed mortgage can allow people with limited cash available to buy properties on a recurring basis and move out after the minimum time for loan conditions and add it to their portfolio that way. 
Fo you see. A problem with using a 3.5, 5 or 10% loan for buying a personal residence with the intent to move in 12-24 months and repeat?

Quote from @Joshua Leal:

I am looking to purchase a home for myself. Do you think the market will crash and I should wait till then, or should I purchase now because prices will keep increasing?

The debate about the market conditions and future is always alive. People will tell you the market is going to crash. Others will tell you it’s about to jump again. You really need to examine each deal in the context of your life and financial position and make decisions from there. If you haven’t read Set for Life or considered house hacking, I would strongly recommend it. If you are looking at a single family home I would still run the numbers as a rental and see where the deal fall in terms of return. If the deal makes sense now it will likely be a good time to buy. You may have to sift through 50 or 100 deals to find one that makes sense. Also don’t be afraid to offer below asking even in a hot market. If you know your numbers and what you need from the deal, offer it and work from there. 

I can’t see so much why you chose the numbers you did.

What is the basis of the 50k$ rehab?

Are you sure you can get materials fast enough to complete in a 90 day turn? Meaning a 60 day rehab and 30 day closing.

How many days on market are houses in this price range seeing in your area?

Without any additional details that’s all I have. 

Quote from @Joe Villeneuve:

Not even close. There are many reasons why REI is much better than the SM.

1 - Leverage
2 - Exponential returns on investments
3 - Owning RE for free
4 - Using same money to buy an infinite number of deals.

...and more

Joe is on it as always…. But let’s not leave out the big one for many high income/high net worth individuals:
The ability to save on taxes 

@Greg

I won't say the housing market is going to continue to climb at the crazy rates it has been however as is typical of large data sets and headlines, less than 100k foreclosures per month would be abnormal in a slowing market.  Considering the lack of ability to process foreclosures in the last couple of years seeing that activity tick up and normalize should indicate that the housing market is stable or stabilizing. Housing prices dropping and people not paying tens or hundreds of thousands over asking seems correlated to the spike in interest rates.  Maybe we finally slow down and see housing do what it has historically done and grow at 3 to 5 percent.  Maybe we see monetary policy shift again and slow things way down into a real recession.  Maybe we see another 2,3 or even 4 trillion dollar budget addition to "keep the economy going". Any of it is possible, my dollars still say that over the next 10-20 years (my personal investment horizon) real assets, especially cash flowing ones in the US will beat most other opportunities to earn a return.

This info is why median prices are gibberish.  This data is key to understanding what is selling in the market and to some extent why. Thanks for the data Jay!

@Dong Yan

I’m conservative and works use a long term fixed rate loan. Rates today are still quite low historically and if your plans change as @Kushaal Malde pointed out you have the safety of holding the property with a known expense vs a variable rate. 

It's my understanding that a HELOC home equity line of credit is a loan utilizing your home equity as the security/collateral. A Home Equity Loan is another name for a second mortgage. Or second position loan typically amortized over the length of the loan often at a fixed rate.