All Forum Posts by: Chad C.

I'm somewhat new in this game as well but I agree with Brian Garrett on this front, I'd love to buy some rentals in my back yard but cash flow can almost be negative if you go with .95/.5 rules to run some initial figures. Case in point is a Duplex for sale near me that needs rehab but is listed for 425K and will likely rent for less than 3K per month. Homes like these are typical, but I'm sure there are better deals to be found. 

In my research I've found that appreciation should be looked at more like icing on the cake rather than the main factor on buying. KC might not appreciate as dramatically, but I like the slow steady cash flow over a long period of time. That said, I'm kicking myself I wasn't buying more properties 10 years ago and it's possible that 10 years from now I'll kick myself for not buying now. Denver is kind of an anomaly and it very well could be the next major American city years from now. I'd love for someone to tell me I'm dead wrong and buying in Denver can work as a cash flow method, I just can't seem to make the rental numbers work.

Now for fix and flips I do think there's a lot of potential in a few neighborhoods. The market is so hot it's a great opportunity to turn around a distressed property and sell very high. Competition can be tight but as a flipper you can't beat this market for selling. 

@Adam M. I think my math was roughly on 15 year mortgage at 3.x%, sorry I didn't do the exact calculations, but you get the idea. My point is not to spitball and say 'I can make more than 4% so invest there.' Making the exact calculations on expected return vs. the Mortgage cost is exactly what the OP should do.  Not every investment will net you more than your mortgage costs. 

Love the ideas here, I am a huge proponent of the home as a liability rather than an asset, but like many others I agree that if your cash can perform better for you than your mortgage costs, it might be worth investing.

Keep in mind that your mortgage may deceive you, what looks like 4% on paper will likely cost you 25% or more of the original loan to borrow for 15-30 years. Very few investments will earn you better than 25% ROI, so something to consider. I like steadily paying more than my mortgage to upset the amortization while setting aside another chunk for investments.

Just a heads up that I looked into this as a family member wanted me to manage their property for them. In my research I found that Colorado is one of the few states where you need to be a licensed real estate agent in order to pm a property that you don't own yourself. Not sure if you are licensed, and my information may be outdated, but I thought I should mention it just in case. Good luck!