All Forum Posts by: John Ford

I've heard Navy Federal will do mortgages as low as $25k. Someone even said they'd do under $25k with a 1% premium on the rate. 

I'm a fan of the "hybrid" cashflow/equity plays and that's what I'm currently in and looking for more. What @Eric P. said. Pick a market and look for news about transformative projects on the borders between high-/low-end neighborhoods. In Atlanta right now, it's easy: just follow the Beltline. Find the hot neighborhoods where people (Single professionals, DINKS, and maybe young families) want to live now then look for cashflow in neighboring neighborhoods. Especially if there's one bad neighborhood bordered on 2 or more sides by hot neighborhoods with major development. But beware of physical barriers between neighborhoods like highways, train tracks, etc... Also, beware of school boundaries if the hot neighborhoods are more "established families" oriented. Childless adults will cross borders into bad neighborhoods just to be next to the "new hotness" and begin to turn it around, but families...not so much. Ultimately, it's all speculative so the deal must cashflow at least enough to pay all the bills (vacancy, capex, etc...) because the appreciation may be 10 or more years out even without a correction and you've got to be prepared to ride that out.

I just send a link to this video: https://www.youtube.com/watch?v=-K7fCQlUhj0

I have an incomplete degree. I'm just getting started in REI (own one rental and my current home) but the topic of degree has never come up and I've never asked anyone about theirs. I've also been working as a software developer since 1999 (dropped out of college to cash in on the dot-com boom and never went back). Real Estate seems a lot like the software world: Some fundamental education goes a long way but ultimately, what keeps you progressing in the business is your continued personal learning, whether self-taught, through workshops and classes, conferences, etc... School curriculums are necessarily generalized. They'll teach you the underlying theory, but they can't teach you "how to maximize profits on a flip in X neighborhood in Y city." You're still going to have to learn the particulars of your market, strategy, etc... Ultimately, in REI as in software, once you get started all that really matters is what and how you did on your last few jobs/deals. If you can show success in your past, people will believe in you to be successful for them. Just my 02c.

I think you're fine. Just keep on trying to get it rented. What the guy is really scared of is that you'll kick back and say, "Sweet! free rent!" until the end of his lease. The guy's argument is standing on wobbly legal legs, but that doesn't mean it won't cost you to win if he does press legal action. The best course of action is to just get the house rented ASAP and this all goes away.

Also, this guy is not moving because of the hike in rent. He's just using that as a convenient excuse. As he said in his email, his real concern is rising rates vs the timing of his home purchase, which would have happened whether you raised the rents or not.

Welcome! I was just chatting with a friend of mine about what the prospects for investing in Louisville look like. I grew up right across the river in southern Indiana. Good luck on your REI education.

I think maybe you misinterpreted the idea of the "funnel", which basically means at every step of the process, you wind up with fewer houses after weeding out the losers. ie: it doesn't seem unreasonable that an investor looking for a deal may look at 100 houses online, drive by 30, analyze 20 in depth on paper, look at 5 with an agent, make an offer on 2, and buy 1.

How well do you like your job / how secure do you feel in it? The reason I ask is that in many cases, when you borrow against your 401k, the loan is called due in full when you leave your job. If you can't pay it back, it gets reported as an early withdrawal and is subject to all the penalties and taxes as such. 

Now, I'm not saying don't do it. I borrowed against my 401k before and it worked out OK. Just be sure to read all the fine print and know all the possibilities going into it.

Yes, rates have gone up since the election.

@Thomas S., I assume you mean opportunity cost. Yes, I'm not maximizing the use of the equity and I'm fine with that. I'm also not taking on a crap-ton of risk being over-leveraged on cheap properties, which I'm also fine with. To each their own.