All Forum Posts by: Account Closed

@Gene Hacker excellent point and excellent strategy!  Thanks for both of those.

@Account ClosedMy investing market, Bakersfield, CA can't seem to put inventory up fast enough.  That's what's pushing up prices here.  Simple supply and demand, but we will hit the ceiling soon enough.  @Andrey Y. I think Neil is talking about the devaluation of the dollar due to the US Federal reserve printing trillions of dollars.  If you compare the 1950's with today, the dollar has lost about 98% of it's purchasing power in dollar denominated assets.  You're good fortune with the Yen is because the Bank of Japan is going for broke with their money printing, what central banks call Quantitative Easing.  Japan has horrific structural problems in their economy.  However, they are about 10-15 years ahead of us with their policies, and we are unfortunately on the same path.  But yes, since they've printed gobs of Yen, and we have a very strong dollar internationally right now, it's good for exchanging currency.  Even with the EU right now, which the dollar is almost at parity with the Euro.  Bad for the EU, but good for us.  Unless, of course you export things from the US.  Strong dollar makes your exports more expensive and harder for foreign buyers to purchase.

Sorry for digressing/hijacking the forum.  Anyway, Prices in CA are insane anyway especially in the large metros.  @Account Closed  keep in mind it's always about supply & demand, but demand is a composite of people's ability to afford the mortgage payment and how scrupulous or un-scrupulous the banks get with their lending practices, i.e. the lending practices before the last crash.  Do I expect a crash in the next 5 years?  Yes, I see it coming toward the end of this year or early next.  Just my thoughts.  Happy investing both of you, @Account Closed @Andrey Y.

I can't see prices continuing to rise.  Nationally, there's a big issue right now with appreciation out pacing the rise in income.  This can only go on for so long before things become unaffordable, especially in large metros like LA, San Francisco, New York.  In California, the 3% down thing is back, which is helping to push up prices more.  

There's not a doubt in my mind the market is setting up for a big crash similar to 08-09.  We're planning on waiting the market out, and learning learning learning until the next crash, then hopefully swoop in and buy a couple of properties for very little.

There are many factors that affect price appreciation, especially depending on where you're looking in LA.  Too many industries/job sectors to analyze without a lot of work.  We are sticking to the financial rules for buy and hold outlined here on BP and other places.  Until we see a deal that works, we're on the sidelines.

@Raymond B. Thank you for that, I've been trying to figure that one out for a while now!

Excellent strategy.  We are planning on executing that very plan, and are in the process of building up the down payment that starts it all for the first one.  After the 10th loan, I suppose we'll have to go to hard money lenders, or investors otherwise.  Any other options after 10 loans with Fannie Mae?

I like the idea of owner financing.  I'm investing in California, so the numbers will have to work to cash flow properly, i.e. purchasing the property at a discount due to 95-100% financing.  We are working down this road as well.  Another suggestion I haven't seen here just yet is taking some of your savings and putting it an investing club.  There's lots of them throughout the country, but a very ambitious one is in Bakersfield, CA.  They're called Bakersfield Investing Club, and last year, they returned 33% on shares.  If you re-invest, it will compound even faster.  We're in the process of reading BIC's contract right now.  www.bakersfieldinvestingclub.com.  We're thinking of putting a substantial amount of our savings in this account for about 2-3 years, and let it grow so we can purchase (hopefully) two properties.

Anyone have experience good/bad with purchasing mobile homes in mobile home parks? How do they cash flow generally? Any problems with the HOA's? How are renovations different in a mobile home than a regular house? Permitting issues?

I hear the 2% rule tossed around, i.e. buy for $100k, rental rate should be $2k per month.  Unless I go to the parts of town I don't want to have a buy-and-hold rental in, I'm looking at more the 1% to 1.25% range from what I can see.  

Any advice on this?  I hear the Bay Area and LA/San Diego don't cashflow much.

I want to get some experience under my belt in places I know first, then branch out to other states.  Thanks for your help.

Awesome job @Brandon Schlichter!

I am starting out myself, and am planning to use the BRRRR plan myself. You're an inspration and a great example for how this can accelerate investments quickly. I ahve two questions for you:

1. Where did you get your first down payment from?  How long did it take to get the down payment amassed?

2. Are you taking much in the way of profits or keeping them in the business/purchasing new properties in a 1031 exchange?