All Forum Posts by: Donny Frusciante

@Donny Frusciante Do NOT take advice from strangers on the internet who know nothing about your personal financial situation or goals. It is irresponsible at best for someone to say ‘ you should …..’ without knowing your entire situation, unless perhaps suggesting to be very conservative if you are an uneducated investor.

Quote from @Donny Frusciante:

Quote from @John Morgan:

@Donny Frusciante

If you want to build some serious wealth, I'd take that 160k and buy as many cash flowing SFH below the median price with 20% down as you can. You will generate a ton of cash flow and RE appreciates 5%/year historically. But you reap the rewards with 100% of that appreciation with only 20% down. Not to mention your tenants are paying off your mortgages and the gains are all tax free due to write offs. You'll be set in 5-10 years. Good luck!

 Thanks for this...do you have any tips of finding these type of properties besides me just browsing on Redfin, Zillow, etc. Houses around me aren't going super cheap, unless they are run down or not desirable.

I’ve bought 14 houses off Zillow. Some in good condition and some in bad. I’ve bought a few off market. And one from a wholesaler. Rehabs end up going WAY over budget most times and it’s a hassle trying to find good contractors and make sure everything goes good. I prefer to buy homes that don’t need much. Maybe 10k or less to get them rent ready. And I target working class neighborhoods. I don’t care about school districts or the fact that everyone’s front lawns look like weeds mowed over. These people are low maintenance and just want a place to live. Plus they appreciate more since builders stopped building starter homes for 15 years or so in most places. These rentals are in highest demand in good times and bad. So I’ve been able to raise my rents quite a bit over time. And my turnovers are zero. None of these people can afford to buy or qualify for a home. So that saves me a ton of $. They’ll be with me forever. Lol 

@Donny Frusciante

If you want to build some serious wealth, I'd take that 160k and buy as many cash flowing SFH below the median price with 20% down as you can. You will generate a ton of cash flow and RE appreciates 5%/year historically. But you reap the rewards with 100% of that appreciation with only 20% down. Not to mention your tenants are paying off your mortgages and the gains are all tax free due to write offs. You'll be set in 5-10 years. Good luck!

If you can get a good interest rate locked in for 25-30 years, I'd do a longer term mortgage. I'd also do 20% down to avoid insurance (not a problem in your case).  Find out where the money will give you the best return.  This doesn't mean easy or quick money, but if your mortgage rate is 3% and you can get a 5% return on a low risk investment (eg savings account-no they don't give you 5% on those, but as an example); then don't put the money to your mortgage.

Many mortgages allow you to increase the payments or do lump sum payments, so down the road if you want to put more towards your mortgage, you can.

If you don't know about investing, I suggest reading pages from NerdWallet, Motley Fool, and investopedia. I used these years ago and they helped.

There are several roads to take here but it solely depend on what you are interested in. As Warren Buffett stated, “Never invest in a business you cannot understand.” 

Would you want to go into the real estate business as a landlord/owner of properties, an individual who flips homes, or as non-accredited investor for real estate?

As far as lowering the down payment, that also depends on how comfortable are you with the monthly note now. My impulse would tells me to put 20% down to remove the PMI on my primary home and lower it even further but hold on that.

Learn how to invest, identify what certain terms mean, invest in the business you like, and diversify your portfolio (i.e., some in more risky areas, others in less risky areas).

I'll let others jump in on this.