All Forum Posts by: Nicholas DeLouisa Jr

Hi,

I would love an official long island meet group.  I'm in Nassau so if you have any questions about locations feel free to ask.  I'm not sure I could make a weekly thing in Lake Grove, but I would definitely like a regular place to meet and talk.

Unfortunately, though, I am a beginner, having virtually no knowledge and actually no experience.  So, while I would like to participate (you can read that as "show up"), I know I would not be able to do much more than ask questions, shake hands, and laugh appropriately.

This Friday is a bit close for me to be able to plan to be there (I'll try), however I believe next Friday would be fine for me, and if it goes, I will be there and try to bring a few people.

@Bryan Hancock,

Ok, so what you're saying, from the POV of a beginner, is that investing in rental properties, from the standpoint of RENT alone, is not a wealth building vehicle (due to long term issues), and must instead be coupled with another strategy (or more) that will produce greater capital growth - such as "exchanging up," as you say.

Would be nice if more buy-and-hold articles/posts/books included this little truth (or maybe I just don't read closely enough).  Thanks for the clarification!

@Elizabeth Colegrove,

I don't understand the last part of your post:

"A lot of these cheap houses, are cheap because they don't appreciation. So if you buy a 20k house and its rents out for $600 (3% rule), you probably will make no money over time."

Why is this?  I live on Long Island, NY, and, to be honest, the idea of buying a house for $20k seems like a fairy tale (unless you mean distressed beyond repair).  But, that aside, if one were to buy that house for cash, why do you say that the buyer probably won't make any money in the long run?

@Elizabeth Colegrove , @Bryan Hancock , @Franklin Romine 

Ok, so if I'm understanding this, capital growth is the build up of capital, whether in the form of cash or the value of an asset?

I saw an article on BP that was trying to "debunk" a buy-and-hold myth.  I don't remember the author or the name of the article, but he was saying that for buy-and-hold, capital growth is more important than cash flow because by the time the property has no mortgage it will be outdated and in need of major repair.  So, he advocated trading up at opportune moments to avoid the issues that may arise from the buy-and-"mold" strategy.

However, he called the 'trading' strategy capital growth and contrasted it against buy-and-hold.  Maybe I didn't understand the article completely, though, because I didn't get the concept that buy-and-hold would be considered capital growth.

Ok, I think I understand now.  Thanks!  I will be sure to post when I have more questions 8~)

Ok thanks everyone, I got it. Will scratch that idea. 

I really wasn't trying to do anything dishonest or unethical. I Just wanted to know if there was any kind of wording in the rules that allowed something like this. 

I see, so it really does come down to a person's specific intention. I would have to specifically intend to live in the unit and if I wasn't, then I would be violating I guess the spirit of the loan requirements, if not the actual letter of same. 

Ok, thanks for the info, I appreciate it. 

Hello,

I am having a little trouble understanding the nuances of a capital growth strategy, as opposed to, say, strict buy-and-hold. I guess I don't quite see specifically what IS capital growth and what is NOT capital growth, with respect to income properties. The way I'm reading it, capital growth is about increasing value. But doesn't paying down a mortgage increase value? Or is it only appreciation and/or repairs/updates/etc. that would be considered capital growth? Is it all about taking properties and trading up to increase value? Is it some combination of these? Or perhaps some of the above is and some isn't? 

I'd appreciate any clarification, thanks!

Nick

Hello,

I have a question about FHA loans. Let me preface this by saying I am not looking for any kind of "permission" or advice on how to break the law and not get caught. I guess what I'm looking for is a loophole.

So here's the question. I know that there is an intended residency requirement inherent in the loan. If I were to buy a duplex (or tri- or four-), I know I could live in one of the units for a required amount of time (366 days, I think; I live in NY) and satisfy the residency requirement of the FHA loan. However, I am wondering if it is possible to leave one unit vacant, change my legal address to the vacant unit, and yet not actually live in the unit. It would be far cheaper for me to absorb the vacancy for a year rather than to move in.

So does anyone know the specific rules regarding the residency requirement? Is it a minimum portion of the week, or perhaps some other minimum proveble standard?

Thanks. 

Nick

@Tim G.,

Beautiful job. Congratulations!  It's stories like this that keep all of us motivated to move forward.  We all benefit a little bit when we hear about a success.  Thanks for sharing yours.

Just curious, did you ever happen to take a moment and figure your hourly wage from the deal?  I mean taking into account all the physical labor of construction, the searching, finding people to work with, etc.  If you added all of that time up and figured your hourly wage, where would it fall?