All Forum Posts by: Logan McKay Zylstra

Yes, but title companies do not handle contracts.

I would reach out to a realtor you already have a connection with and ask for the one they use. I think using the state-approved form could save you BIG in the long run. Some may not be willing to share, but if you ask a few realtors I'm sure someone would be willing to share.

Couple things:

1. I would ask for a higher interest rate. Rates are at or above 6% for investment properties.

2. Are you sure that is the market price for the condo? Seeing list vs. sold prices are very different. (Where an agent would help with putting it on the market, creating competition)

3. Most loans have some sort of due on clause sale. Meaning that you will need to pay off the loan when you sell the property. If the downpayment doesn't cover that amount you may need to come out of pocket to cover the remaining balance of your mortgage.

4. While you are in a lower tax bracket it may be advantageous to sell and pay the capital gains this year if you are not utilizing a 1031 exchange. (And given your timeline, I don't believe you have lived there 2 of the last 5 years to avoid that capital gains)

As mentioned, you won't need a realtor for this transaction. If you aren't comfortable with the paperwork, I know that some agents (maybe title companies as well) will take care of the paperwork for a couple of hundred dollars.

I don't know if lending requirements are different in Texas, but you don't need an inspection. Inspections are only helpful when trying to understand the condition of the property and how much in repairs you might have to pay. (I would skip an inspection, and save on cost as it sounds like you are getting a pretty sweet deal from your parents gifting you the downpayment and selling it to you for appraisal value).

The only potential issue with financing your deal is your DTI. I'm not sure if you have any other debts, but from my perspective I don't see you running into any issues except for potentially that one.

I think what he is trying to get at is that waiting to buy real estate will only delay wealth creation and more than anything trying to get people to take action.

Goes back to the concept:

The best time to plant a tree was 20 years ago, while the second-best time is today.

I think as a newer investor, everyone should try their hand at a few types of investing. Once you get exposure to multiple types of investing, I think most people will be able to see what you enjoy and are naturally gifted at and then have a better idea of what to niche down to from there.

@Kevin Sobilo

I agree with most of your points. However as I mentioned, I don't recommend taking negative cash flow purely to lock up a property. I also noted that I see what cash flow does for people in terms of giving them that income "now." While placing your bets solely on the appreciation of that property.

 Also, market appreciation is not pure speculation as some make it out to be. While you might have no control of making your property appreciate, you can certainly put in the research to see where developments are planned to happen and purchase in prime locations in the path of development.

My reason for posting was an attempt for investors to look at the whole picture rather than just cash flow.

I think often newer investors get caught up in cash flow. While I certainly see how cash flow enables people to achieve financial freedom; leave a W2 job, retire early, or allow them to chase any dream they might have. There are other benefits to real estate beyond cash flow. In this post, I want to look specifically at appreciation.

While, I’m not saying that cash flow or making enough in rent to cover costs isn’t important, because it is important. I believe that real wealth generation is created through appreciation. Whether that be forced (fixing up a property, increasing rents, etc.) or market appreciation. Being able to leverage real estate, creates the ability to create massive cash on cash returns during the sale of a property that has appreciated.

Again, I think having strong cash-flowing assets is important, but if you are wanting to achieve a substantial net worth, there needs to be room in your portfolio for assets that you make or believe will appreciate.

I agree with Janet. While I believe that having a basic understanding of stocks is important, I believe you should pick one and really focus on that and become an expert.

I used to work as a CRE analyst, where we focused on senior living facilities. While I have never considered just buying one property to rent out, all the fundamentals of that choice are there (not enough senior housing for the spike we will see when the next generation reaches retirement, typically higher rents, etc.).

While the fundamentals are there, I would not personally buy a single 55+ property. My worry would be that the tenant pool is much smaller and that it would go vacant for extended periods of time.

Also, I would be sure to take a very detailed look at the CC&Rs to make sure that you are able to rent.