All Forum Posts by: Hideaki Yen

Anyone know any good ones out there? There are so many real estate investing books but I can't believe there are almost none when it comes to this topic (as far as I can see). 

How much accounting do we need to know to start in real estate? Do we just need to know the very basics like keeping track of net worth and balancing assets, liability, equity? Or do we need to know more advanced topics like debit and credit?

This is assuming you have an accountant, which is highly recommended according to my research. 

Hello! I'm currently attending university outside the U.S. and am panning to buy my first home when I get back. However, I don't have a credit card, and thus no credit score. Will this effect my chances of getting an FHA loan as a first time home buyer? There are so many conflicting answers online; some say I need some and some say I don't need any at all for your first home.

Thank you!

Thank you so much for the replies!

I recently watch a youtube video by Kris Krohn about rentals vs lease option (rent 2 own). 

Some things he mentioned where lease options are better than rentals.

- charge higher monthly rent 

- tenants tend to trash the place less since they are going to own the home 

- tenants are responsible for paying the repairs which save money 

- no property management (tenants self manage)

- no realtor fees

The only pro I can think of for a rental is that you hold the property longer so you get more cash flow over time, but I feel like the pros for the lease option outweighs the the pros of a rental, especially because you can buy more houses and do the same thing after selling it, and much faster. 

And according to my research from other sources (sorry if I'm totally wrong, just noting I'm a complete noob), what he is saying is true. 

So this makes me question why everyone does not do lease option instead of rentals. I also read somewhere that lease option has a bad rep for ripping people off. Is this the reason why it's not more widely used?

Thank you for the responses! They really helped!

Thank you! May I ask what is over leveraging and how that is considered risky? I'm guessing because you will lose tenants during a market crash and the large amount of debt can lead to the mortgage coming out of your own pocket (ie negative cash flow), and you can't sell the properties either since the prices dropped so low?

Hello! I recently got into real estate and was learning about a few things and I want to make sure I understand the concept of leverage. Recently I have been researching about whether to use cash or use leveraging when buying real estate in the future, and I just want to make sure that I clearly know the difference between the two strategies. I wrote the two statements below and was wondering if these are true statements. I thought writing these statements was easier than defining leverage. 

If I am planning to only buy one property, it is always better to buy with cash. This is because you won't have to pay the extra interest when paying back your mortgage. 

You should utilize leveraging when you are planning to buy multiple properties, since you will have a much greater cash flow (if done correctly) with multiple properties (even if you have a mortgage on all the properties) than having one property with no mortgage. 

Is this the right concept? 
Also, I hear in multiple forums about how leveraging can be risky, and the extreme is called "over leveraging"? I'm guessing this means when you are too deep into debt due to buying too many houses with loans, but what is the risk? Every time there is an economic crash, people say that investors who are overleveraging get hit the hardest, but what do they mean specifically? How does that work?  I tried looking everywhere but I don't get a clear answer. Sorry if this is a stupid question. I'm not an adult yet so I don't know much about basic finance and how the economy works.