All Forum Posts by: Charlie Nghiem

@Ujwal Velagapudi That's amazing the 180 that city has done. Great deal on the building. Those are killer returns.

 Still trying to get a grasp on the market, so forgive me if it is an odd question. And I know you were just giving an example, but wouldn't a Class A cap rate stay the same or get lower in year 5? Especially in a strong market like Austin. The only answer I can think of is that as interest rates rise, cap rates have to follow.

This strikes a cord with me because I've been through the same situation. I also made many stupid decisions when I was young. I bought a car, a motorcycle, and spent the rest on nothing that was important. What I can remember is selling the car, the motorcycle, and everything else that was unimportant, while working 3 jobs at the same time. Any remaining debt that I had to settle on was at best 60%, but on average 80%. I did was a few thousand using "debt relief" services that offer an extremely small service for a very expensive price. Good for you for taking that situation in your own hands at least. The amount you got written off is unheard of, considering the fact that my wife use to work for the "debt relief" company. 

Good luck!

 Is this the same Detroit that Brendon talks about in most of the podcasts??  I am also curious what investments are available. I am guessing the commercial space?

To your question if we are at the top of the market. My opinion would be that the market always dips and peaks, but overall average home prices usually always rise. So even if you bought at peak prices today, after the subsequent drop, the next peak should be higher than the previous. If you plan to stay in this house for a decade or so, everything should be okay. My opinion only, with the trends that I have read about so far. Good luck!

Also new, but here is my opinion. To elaborate what @Nick C. said, I believe that financial position and risk tolerance are on top of your list of factors. 

I am a fan of multiple doors and the speed of obtaining them through leverage. If I had 300K I would either spread it out as the downpayment between 2-3 houses and have a reserve for emergency repairs. 

To me, the more doors, the less risk. Just make sure that it cash flows in a good market and at least sustains the mortgage in a bad market (this lowers your risk). As long as you have a reserve to mitigate your financial risk either with cash or a line of credit, you can purchase as many properties as you want.

Being over-leveraged is bad. Say you use your 300K to make a downpayment on 7-8 properties and have to evict a tenant and lose 6 months of rent, can you cover that? Not if your spread out too thin. You have to know what you can handle and find balance. 

I am impressed with people who have 50 or so properties free and clear, but the thing that stays in the back of my mind is what they could be doing with the equity in those properties? Purchase more, loan it out, or purchase notes. 

@Brian Adams

Thanks for your input. You are an awesome person!

@Brian Adams  

@Account Closed says, there is a part of town I should avoid because it is not so good. The area that I've been concentrating on is the area around Condor Park just south of the BUS 190, which looks like the line dividing the city, or I could be right above it, I'm not sure. Do you have any thoughts about this? 

I use Trulia to view a crime map and it seems pretty bad north of BUS 190. I'm not sure if this is too close to be next to all that or if it is necessary to have a buffer zone of a quarter mile or so?