All Forum Posts by: James Ma

@Ishmael Johnson You need to just run all of the expenses. Don't forget to include a vacancy rate (I like to use between 3-5%) and a maintenance reserve to cover things like paint, appliance repairs, etc.

If the property pays for all of your expenses to hold and doesn't run you negative, it's never a bad property to look at analyzing further and how other areas compare.

Purchasing properties where it is negative cashflow forces you to hope for appreciation in order to make any decent returns.

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Credit card interest is higher than usually any investment you can do - remember their interest is compounded DAILY

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never chase the money, chase your passion. If you love doing real estate then go after that. If you're just more passionate about doing more transactional sales or selling tech etc. then focus on those avenues. The money will always come when you find your passion as you'll do your best work.

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In Canada its been that way for a long time. 200K for a house is dirt cheap, you can't even get a 1bd condo here for that price in most of BC and Ontario. With the recent appreciation of the CAD or downfall of the USD, its looking even more tempting to pick up some properties in the US...

Everyone wants to own a detached home but most never will be able to afford one here and have accepted condo or townhouse living as a standard

Originally posted by @Jim K.:

Guys, I'm getting the feeling that we're all just totally screwed. I've proven to my satisfaction that a new homeowner simply can't buy a functional starter house for under $100K in the Pittsburgh area without battling well-funded investors tooth and nail for it. I have an old high school friend in Chattanooga who's a broker and says the ceiling is $200K there.

Under these conditions, there are going to be multiple cockamamie ideas out of statehouses across the country and Washington that will be listened to and acted upon until we have another housing crisis. It's inevitable. The government will do anything to protect "the American dream of homeownership." They'll act and they'll act until they sink the whole thing.

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bare trust corporation

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Usually it comes down to location for most investors in my area. Nothing within an hour drive of Vancouver, BC will cash flow much.

Here most properties will negative cashflow but that has not deterred many investors who don't run numbers and just buy because real estate keeps going up and up in their minds and the most common reason for buying a place is "its a good location and should go up". With housing starts behind immigration numbers, everyone with any capital loving real estate investments here, increasing build costs, and inflation on the rise, it actually does build a nice appreciation picture for at least the next couple years still.

But to get back to the original question, even if a property doesn't cashflow much, you do still get the mortgage paydown and on average 4% appreciation per year historically. So buying something closer, that's easier to self manage, can make sense for some people who don't mind a bit less ROI in exchange for a location that is in a highly desirable area with higher appreciation potential.

Personally I prefer to go for a property that at least cashflows a little and definitely not negative, but I don't think its a deal breaker to pick a property that breaks even on cashflows if it makes sense for you for other reasons.

Originally posted by @Taylor L.:

Putting more down isn't really increasing the cash flow of the property, it's just reducing the cost of debt. Why buy a negative cash flowing property betting on future appreciation, when there are positive cash flowing properties out there?

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I'm from Canada so I know the rates are a lot lower but I just got 1.45% on 5 year variable, 30 year amortization.

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I only do 30 yr terms if possible

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All Forum Posts by: James Ma

James Ma has started 3 posts and replied 274 times.

Post: Cashflow still exists even with high BC real estate prices.

Post: Anyone Ever waive inspection contingency?

Post: How to Determine a good market to buy rentals?

Post: Pay off all Credit Card Debt Before First REI Deal?

Post: Becoming a Real Estate Agent?

Post: California ramps up the crazy, wants to own 45% of your home

Post: Investing as a group

Post: Is lower cash flow a deal breaker?

Post: What's the avg interest rate for 30yr mortgage loan 2021?

Post: 30 year loans for investment properties?