All Forum Posts by: Joshua Michael Hauman

Hey BP Community,

I've got a friend who is a veteran and asked for my help to get into investing and I'm more than happy to help him out however there a concern that came up. He's on SSDI (Social Security Disability Income) at just under $1,500 a month and he wants to do some wholesales to make some extra income.

Lets say he does a deal or multiple deals and makes any assignment fee on it/them and the profit exceeds 1.5k which is higher than his disability per month. And in fairness, not worth doing if you're not making more than that anyway.

If he does something like this and it exceeds the SGA (Substantial Gainful Activity) limit he would lose his disability right? 

I want to help but also don't want him to do something that jeopardizes his income so its a tough situation. I'd appreciate any advice from members who have personal experience with this.

The flip side is he really gets going and just makes more money from real estate than he would ever from disability. He has no safety net so I don't think its wise to take the risk because if he did a deal, lost disability and then since hes brand new to REI lets say it takes a while until he gets his next deal I just want to help advise him best!

All advice is appreciated.
-Josh   

What stories a house could tell if it could talk? What if you could discover these stories without digging through old records or talking to past owners or locals in the area? With Google Maps, you can! 

When you're thinking about investing in a property, knowing its history is helpful. With Google Maps, you can see how a property and its neighborhood have changed over time. 

Seeing how an area has evolved can give you insight on what might happen there in the future. This can help you estimate repair costs for the property itself and get a feel for the neighborhood. For example, a quiet neighborhood that used to be a busy factory area might have hidden issues, like pollution. Or, a place where lots of new houses are being built might give you an indication that its an opportunity zone or in high demand.

1. Look Back in Time: Use Google Maps to flip through images from different years to see how things have changed on and around the property.
2. Spot the Signs: Keep an eye out for things like construction activity, nearby abandoned areas, traffic velocity to understand how things have developed over time.
3. Predict the Future: Knowing what’s happened before can help you guess what might happen next. How is the neighborhood trending? 
4. Consult Historical Zoning Information: Combine what you see on Google Maps with historical zoning data available from local city planning offices. This can be found on the county auditors website in many cases and will help you verify if the changes you see are in line with broader urban planning strategies.
5. Engage with the Community: Sometimes, the best insights come from local residents. After your virtual historical tour, connect with local investors and agents to hear their views on how the area has changed and what they expect in the future.

Understanding a property's past helps you see its potential future. With Google Maps, you can explore these stories easily and make smarter decisions about where to invest.

With Discipline,

Josh

There's some pretty interesting international property markets out there where you can find a lot of opportunities significantly under 250k. Bogota Colombia is a primary focus for me this year and we have a client who bought a Villa in Bali Indonesia last year for 110K USD which generates him over 30K NOI a year. Pretty sweet deal since he purchased cash so no debt service.

I'm also in Ohio so I can agree with @Brian Mineau as well.

Paying off a house completely is a trap. You should avoid it if you want to amplify your wealth.

Here’s what to do instead:
Successful investors own nothing outright. 

They sit back and wait as their properties go up in value and their tenants pay off loans for them. This builds equity. Then they extract this equity to invest in more wealth building assets instead of paying it off completely. All that extracted cash isn't a taxable gain. It's simply a loan against growing equity. When you refinance, banks look at your property's value, not your personal credit. You can use this equity over and over to get more cash to buy more properties. 

Why pay off loans when you can use your property's value as leverage?

Counter argument:
Paying off a house reduces risk by eliminating mortgage payments. This makes it a safer bet than unpredictable market investments. This strategy improves cash flow, allowing more freedom in financial planning and personal spending. Plus, the emotional peace of mind from owning a home outright is significant, offering both psychological and financial benefits. It also simplifies estate planning by ensuring properties can be passed to heirs debt-free. Despite the appeal of leveraging debt for wealth expansion, the security and certainty of a fully paid home offer compelling advantages for many.

Pro tip:

I look at the metric ROE, Return on Equity over ROI, Return on Investment.

ROI = (Net Operating Income/ Total Investment Cost​) × 100

ROE = (Net Operating Income/ Equity​) × 100

For me, what is best for you is dependent on what stage of your investment lifecycle you're in coupled with your risk tolerance and personal financial goals.

With Discipline,

Josh

Let's compare a $250,000,0 loan today versus two years ago.

In America, the average person has a credit score of around 715 you’re looking at around 6.6% on a conventional 30 year loan.

Excluding taxes and insurance, your monthly payment is roughly $1,700 dollars a month. 24 months ago that same loan of 250k, with a 715 credit score on a 30-year fixed was hovering around 4% meaning you’d pay just under $1300 per month. Thats 400 more, per month, every month, for 30 years… an additional 144,000 in just interest payments alone.

But check this out, not only have rates shot up over 250 basis points, 2.5%, from 4% to 6.6% but what else has gone up?

Home prices increased in the same period nationwide by over 13%.

Taxes are based on the state, county and property value so what do you think happens to taxes when property values go up? So do your taxes.

Insurance costs as well have risen on a nationwide basis by over 25 percent and if you’re in states like Louisiana, Nebraska, Colorado or Arizona it's over a 50% increase.

So the average person sitting there saying how am I supposed to afford to buy a house today? My incomes not going up? Enter the funeral of the American dream.

I've had too many rings stolen to buy those again, I'm sure they work for some people but has cost me more than its saved me. Floodlights are always a good idea. I use these:


LEPOWER LED Security Lights Motion Sensor Light Outdoor, 38W 4200LM Light, 5500K, IP65 Waterproof, 3 Head Detected Flood for Garage, Yard, Porch (White) - Amazon.com


When flipping out of state I go Simpli Safe.

When it comes to local flips I have a home security contracting company that has their own alarm system and app that I really like so I use them but they are local to Cleveland. The systems they have can't be detected, cut or turned off, unless the perpetrators use bullets.  

@Shawn Parsh cheers Shawn! Knock on wood you keep up the track record! 

I do flips in different states and countries, so it makes it more difficult to keep an eye on the properties but sharing all the lessons I've learnt the hard, and expensive way.  

I've flipped property worth over 1.5 million all the way down to 50,000. Every area and every deal brings different risks. Higher price points present more risk from a capital allocation method but in really low-price points typically a higher crime rate. Regardless it's important to protect the asset and yourself.

Heres 9 things I’ve learned to do to prevent getting robbed.

1. Airtags are devices developed by apple to track things like keys or bags, I use this to airtag items most susceptible to theft like hot water tanks or furnaces and provide this data to the police to track the perpetrators.

2. Trail cams are small cameras typically used by wildlife photographers or hunters but I use them to capture license plates.

3. Get steel reinforced deadbolts on all exterior doors

4. Call the police - Get ahold of the OIC (Officer in Charge) of the division of the city where you're renovating the property. You can then ask for special protection.

5. Make connections with your neighbors and ask a neighbor to park their car in the driveway overnight to give the appearance someone is living there.

6. Get floodlights installed on the property beaming out front. Well light properties are less likely to be approached by burglars.

7. Leave a light on in the property facing the street overnight

8. Get one of the units turned and rented out quickly as possible.

9. Get a security system installed. Do not skimp on this, it could save you thousands.

Let me know in the comments below what else you would do to prevent break ins. Would love to hear from the community!

If I wanted to get into real estate but had no clue where to start here is the first thing I would do. I’d find someone killing it and get them to show me the ropes by giving them value.

5 ways you can bring value to someone you want to learn from:

Raise them money 

Bring them deals

Manage their properties

Introduce them to connections

Pay them for their time

The question is what assets do you have that you bring to the table that’s valuable, to them?

If nothing right now, what could you do or learn, who could you meet that would benefit someone that’s worth learning from?

You have to learn from people that know.

Find a professional, complement their strengths, and profit together.

Step 1: Increase income, decrease expenses. I started with nothing and aggressively saved for almost a year until I had 10k for a downpayment on a cheap house.

Step 2: Join online platforms like BiggerPockets, Eventbrite, Meetup, and Facebook groups to connect with investors and get an idea of what kind of properties to look for as investments.

Step 3: Use Zillow to find agents and communicate what you’re looking for.

Step 4: Analyze at least 5 properties a day in your target market for six months to understand what it would take for you to make positive cashflow.

Step 5 Get pre approved from a bank. They will tell you how much house you can afford.

Step 6: Work with your agent to make offers on properties that fit your criteria.

Step 7: Do this until an offer is accepted, conduct due diligence and proceed to closing your first deal!

The market has changed from years ago but the framework is similar, I hope my experience helps you.