All Forum Posts by: Dylan Barnard

Here in Texas, even though locals are extremely reluctant to admit it, we are very similar to California. This is mainly due to two different factors: the demographics and the mere size of the economies. If the state economies were ranked against that of all the countries in the world, California would be the 5th largest and Texas would be the 10th. One in five people in America live in these two states, and one in four children are educated in these two states. 

It seems the main reason for California being much more expensive is because of the excessive regulation. Texas naturally has very little red tape and is much more lenient with businesses involved in construction of new property. 

Another main reason that Texas is much less expensive is because it has higher tax rates on property. When you are paying 2 - 3% of your property's assessed value every year instead of .79% like in California, investors are disincentivised to speculate on property because of the cash drag in the form of a higher tax. Investors have to clear a higher percentage per year in rents to make up for the higher tax. Property taxes are not popular, but they are proven to be highly effective to reduce speculation.

The third reason for the inflation of property values is extremely low interest rates. When interest is a minimal portion of your mortgage payment every month, your buying power will be naturally higher. 

There are many more factors involved than the three that I mentioned, but to me, there is ample evidence that those are the most influential. Since The Trump administration seems to want to lean on the Fed to reduce rates again and is extremely opposed to higher taxes no matter what - all in the shadow a giant trade conflict with the entire rest of the world which is pushing up input costs - I have very little faith that property will become more affordable. All signs point to the opposite. 

It seems to me that we will be taking one step forward but three steps back.

I would get in touch with your bank or even shop around with different banks and see who can offer you good rates. However, be careful if rates look too good to be true. If a bank is offering you 5% on a savings account or a CD, that means that they need to offer exorbitant rates to attract capital (that actually means it is much riskier than other banks, risk = reward). But that won't really be much of a concern to you because if it is FDIC insured, you will be insured up to $250k. Don't listen to the other people on this thread who think the stockmarket is a good investment right now. It is eye-wateringly expensive for most stocks and that's all in the face of a massive trade war our country is waging with the rest of the world. There is a lot more risk than people think. Just my take on it anyways.

Hey Michael,

Orlando is right. You always want to have cash for emergencies. He is also right to put it in something that has some sort of yield. However, I would ask yourself if you really want to contribute to an IRA. I understand IRAs can be advantageous for tax reasons, but it is locked up and you cannot use it for real estate unless it is set up properly with companies like EquityTrust. I don't know what the fees are for their services, but I've read about people being charged thousands for converting into the right type of IRA for real estate. No offense to Orlando, but financial advisors will always tell you retirement accounts are the best because they can make more money when your money is locked up for decades.

I would encourage you to do more research before locking up your money until you are 59 1/2. If you withdraw before that age (and it doesn't fall under one of the exemptions, like first time home purchase in which intend to live in, education expenses, etc.), then the government will automatically charge you a 10% penalty. So be careful with retirement accounts. They can be beneficial, but you have to make sure it will benefit your specific situation.

DO NOT put it in the stock market. I work with idiots that gamble in the market as my full-time job, and I've seen people do some crazy stuff and lose piles of money in days. Just look at December: that is a 23% drop from where we are now. Do you really want to potentially lose over 20% of your money in a matter of weeks? If you are going to look into the markets for an investment, I would recommend short-term debt instruments, like Treasury bills or CDs from creditworthy banks, like Orlando was saying.

Also, CRYPTO IS A SCAM. There is no value in it being a currency, and it's just a repeat of Tulipmania type groupthink and everyone spreading their crypto-propaganda will end up holding the bag.

Feel free to reach out if you have any other questions or concerns.

You are the assignor, and the buyer is the assignee. And yes, listen to Dave as well. You need to find a trusted title company. They will act as a clearing house, making sure both sides fulfill their obligations and making sure you get clean title with no strings attached.

 Hey Joel,

We ended up passing on that property. And the wholesaler selling it to us is no longer in business, so we probably dodged a bullet... but now you have me curious. I'm going to see if they ended up selling it to another investor lol

You can also look into more creative strategies like subject-to financing, where you just take over the existing financing and put cash down for the equity if there is any. 

A lot of people think this is a dangerous strategy because the bank can technically call the full amount of loan due at any time, but in practice, if you are making payments, the banks don't usually care about who is paying them.

Good morning!

My wife and I came across a lead from one of our social media campaigns, but the seller has property in Lamar, Arkansas. It is a highly motivated seller, and we would like to partner with someone who is closer to the property and knows more about the Arkansas markets. We are based in Dallas/Fort Worth and aren't ready to venture out of state yet without some help.

Email, call or text if interested!

 That's what we are in the process of doing. We have letterhead stationary to make it more professional with our logo and brand. 

 Definitely not quitting. I am not made for this corporate life that I have to put up with right now. It would be a lot easier with more money to spend on ads though. We put what we can into the business, but my $50k salary doesn't provide for many ads after paying bills and stuff. 

 Since we have no previous sellers for our wholesale business, none. But we have been working some referrals for my wife's agent business. It's just the wholesaling part that we haven't had a deal yet for.