All Forum Posts by: Jeff Ronningen

@Brandon Metz. You get what you pay for. In other words, there’s a cost associated with the numbers looking better for C properties. If you buy one you’ll learn and it won’t be fun or cheap. I suggest for your first you consider dialing back your cash flow requirement and getting your feet wet with a B property.

@Keith Smith. Buy low, sell high. Before you jump in build your knowledge of your market. When you’re an expert at knowing your market you’ll recognize a good deal.

@Matthew Layne. You don’t have a business model yet or you’d know the answer. Somewhere between buy everything cash versus leverage everything to the limit is the right model for you. If you developed financial criteria on which you base your analysis of which properties to purchase and how, you would have target financial metrics. It’s probably safe to assume you’re not in the business of investing at 4% or 4.5% to build cash flow, since that’s essentially what you’d be doing by making extra down payment.

@Nathan Braithwaite. Points are essentially prepaid interest. Whether they’re good or not depends on the situation. Do the math. How many months is break even? What’s the present value of the savings? How long do you plan to own the property? In general I’m not a fan.

@Sadrud-Din Williams. Many people pay for these seminars for the same reason people buy lottery tickets. People like the idea of getting money, but that doesn’t mean they’re willing to do what it takes. A beginning real estate investor can gain vast knowledge without spending money if they’re willing to invest effort. That’s the rub.

@Deavin Cox. I agree with this advice. Immediately you should prepare yourself to qualify for a loan. You can purchase a property with up to 4 units with less than 5% down payment and finance closing costs so long as you live in it as your primary residence. Investigate your credit and income qualifications to see if you can get financed. Call lenders until you find a loan officer who understands these programs and is willing to invest the time to help you. If you do it right you can live rent free or maybe even cash flow a bit positive. Then save money, work on adding value to the property, and start working on a plan for the next one.

@Chauncy Gray. Basic finance principles should be taught in high school. Financial illiteracy is a huge problem. The sum total of payments for a 30 year mortgage only requires multiplying the monthly payment by 360. This should not be a surprise. After 5 years of payments the principle is only paid down about 8%.

@Mark Page. If 45 is too late I’m in trouble. Do the math and back into how you get there.

@Andreas W. Federal tax receipts increased after the tax cut. The tax cut is not the problem. Spending is the problem. Debt service on the huge national debt and entitlement programs increase every year faster than inflation, GDP, and tax revenues.

@John Moorhouse. Finish school. You're too young and inexperienced to know what you don't know. Real estate investing involves many unpleasant tasks and requires finishing projects once they're started. Suck it up and see it through to completion. In your spare time you can educate yourself about REI. Better yet get a job and save $20K by graduation. You'll do much better in REI if you have funds to invest vs not.