All Forum Posts by: Jenning Y.

 Ooh, yea, as long as the numbers make sense :)

6 months for a short sale in California in 2012, 6 months for a HUD property in Florida in 2013

 Unless you manage by yourself, good cash flow on paper will disappear in practice.  Management fees and costs related to PM will eat away your cash flow.  People like to say that only cash flows are real, and appreciation is gamble.  Well, when one of my supposed cash flow $200/month property replaced a new roof and replaced a new AC and eat away almost 8 years of my cash flow,  then I ask, is the cash flow really REAL?

I am in the process of getting rid of some of my properties in Florida, property  taxes range from 2.0~2.4%, because with the the property prices increase, the cash flows are becoming WORSE and WORSE, even with the rents increase.  If  2.0~2.4% can bring that result, what will 3% property tax rate bring? 

In the 10 years since I bought my primary in 2002, the appreciation is 0, so I made up mind I will invest primary for appreciation on the condition that cash flow can at least break even. As long as the cash flow can break even, I am fine with that. If SFR can not achieve that , try 2~4 unit. So far, my appreciation vs net rent(include loan paydown) is about 11:2. And the cash flow that I actually got is far less than pro-forma data. So far I am pretty happy with that.

San Antonio as a city, considering all aspects like population and economy, I do not think its potential is better than Houston.

As a Texas resident living in Houston Metro for over 20 years, and also as an investor with properties across five US states, here are my takes on this:

The only Texas city worth to invest is Austin - yes, it is a little bit of expensive.

Forget about Houston and San Antonio. Take Houston, property tax close to 3%, historical vacancy rate is about 10%( right now is a little bit of over 10%, pretty close to historical average), if unfortunately you are located in hurricane zone, hurricane insurance over $1000, did I mention flooding? Why do you want to bring so much trouble to yourself?

I do not think San Antonio's potential is much better than Houston.

You may say, all Texas cities have decent appreciations in the last 10 years since financial crisis. Yes, that's true, but that's only because the 10 years before that period we have near zero appreciation. So the total appreciations ( not annul appreciation) in the last 10 year and 20 years are almost the same.

You see, there are lots of nice states like Utah, or Colorado, their property tax rate are only about 0.6%, about one fourth or one fifth of Texas's property tax rate. Why should you choose a state whose property tax rate is 4, or 5 times the others?

If you are an OOS or remote investor, here is my suggestion:

1) if you must invest in Texas, invest in Austin.

2) If investing in Texas is not a must, choose other states like Idaho, Utah, Colorado, or North Carolina

Note: I am only talking about 1~4 unit, not large apartment buildings, also, many people like to invest locally then they do not have other choices, I understand that.

Last unpopular statement: if you are an OOS or remote investor and you only focus on cash flow, you get the wrong idea!

There are losers and winners for both local and OOS investors. The most important thing is to know what you are doing.

I am an OOS investor who have properties across several states, and majority of them I have never seen them personally; including ones had already been sold. The only property that I bought locally last year I am a little bit of regretting bought it.

Real estate is just a number game. I do not love any property but I DO love money (numbers). When my realtors sent me lots of pictures of the potential properties, I said I do not care, please just let the contractor give me the rehab cost. I only care about the numbers. Of course we should conservatively take those numbers like rehab cost, vacancy rate, rent rate etc.

I invested in OOS mostly for appreciation, because I am living in a non-appreciated place and I hate it.

Personality is also a factor. I do not like to manage the properties by myself, even if it is sitting in my next door. If I do not manage them by myself, what’s the difference between invest locally and remotely?

Still, know what you are doing!

It is never too late to learn.

It is never too late to start a new business.

It is never too late to start a new life if you are no happy with your current life.

It is never too late to do anything that can positively change your life.

Use it as down payment to buy five new built fourplexs with each value about $800k, with five 30-year fixed conventional loans. 

What is risk? Obviously it means different thing to different people.

To a certain degree, we are all just tenants, to THE government (even if our loans are all paid off), otherwise if you stop pay property tax see what will happen. Residents in lower property tax states probably will not feel that way, but in super high property tax states like our Texas, I never feel our primary home are ours: so far half our of expense goes to pay the mortgage, half goes to other expenses (property tax, HOA fees, insurance including expensive hurricane coverage), total of about $2000/month. Do you think I should feel safer if I just pay $1000/month (suppose loan paid off), rather than pay $2000/month ( with loan) but at the same time I can earn much more with that loan? NO, I do not feel that way.

Personally, I think the threat from hurricane is a much bigger than the risk of carrying mortgage.

Should I move to place without hurricane? So far I do not have this plan either.

In less than 9 years, I increased my equity by 14 times, just using conventional loans, with down payment at least 20%( most 25% except primary home). The main reason: leverage.

Financially-free is more important than debt-free!

Personally, I only buy turn-keys if they meet the following conditions:

1)  brand new build

2) in a above-average appreciation market

3) at least break-even REAL cash flow after all costs including PM fee etc.