All Forum Posts by: Dustin T

I would like to see more emphasis in responsible saving in young people. I think high school, and possibly even back to Jr High and Elementary needs to increase the amount of money education they are pumping into the schools.

Everyone is relying upon no-money-down these days. I know there are good creative financing opportunities, but of all my home owning friends I know of none other than my wife and I who actually put 20% down on a house or bothered to pay off cars. People need to get control of their debt and quit this instant gratification crap.

So when you are looking at such deals, you make sure that it jives with the 50% rule at full price, and then do you still make a down payment?

another thought I just had. using the 50% rule, the first thing I could look at is:

1/2 of rent = mortage + cashflow.

so if rent is $850, I have essentially $425 to spend on mortgage + expected cashflow.

would you consider that correct?

I was just looking at another property which I thought may have potential. But comps rent for about $800-875. the house is a asking price of $72k. even with 20% down, 50% of the rents would be the mortgage which means zero cashflow after expenses, vacancies, etc. Only thing I'd gain on this property is maybe a tax write off.

to be clear, our 660 sq ft was 1bd 1 bth, so a 2/1 may be easier to sell.

Our first house wasa 660sq ft. Very difficult to sell as it has a niche market of younger people with bad or no credit, older people who want to rent, or middle aged single folks who don't know where they are going to be in a year.

however, for that same reason, it has been a great rental. We got 2bedroom rates out of our 1 bedroom (although it was very nice, new pergo, paint, roof, windows, counters, we lived in it for 2 years.

I was never able to sell it at market value privately, but my father in law bought it for a good price and he has never had a problem renting it out. never goes a full month vacant. All of the tenants have been middle aged or older women. they love it because it's actually a cute little house.

Thanks Jon and Josh (ane Mike and everyone else too) for the replies.

in summary then, on paper of course without looking at an inspection report, would you say this is the type of deal you look for?

Thanks Josh. Enjoy your dentist :P I'll check back tonight!

ha! Jon that's a great post, thanks! :)

Those numbers are exactly what I wanted to see. I've been reading through more of your's and Mike's posts elsewhere too and picking up what I think are good numbers. While MIke posted above that I wouldn't cash flow at the number I mentioned, I think applying the 50% rule tells me that $650/month rent on a $45k asking price is a decent deal. And with 11,250 down(25%), I'm looking at $101 postive flow, or a ROI of 10.7% on my $11k down... correct?

i started investing in stock at 15-16yrs, and used those profits to buy a rental when i was 20, but my wife moved into that house, sold it at a large profit to buy our current place. Aside from that my investing has been left to mostly the stock market (i'm 27 now). Looking to get restarted in REI though.

question on the 2% rule.

means that rents = about 2% of loan, or 2% of total purchase price? The house I'm looking at I could pay cash for, but I don't want to put all of my cash into my rental, just enough to get the loan down, the PMI gone, etc and leave myself with cash to handle repairs, unexpecteds, and to build a downpayment for the next one.