All Forum Posts by: Matthew A.

Hey, if you have a niche and are good at being a realtor then an up or down market shouldn't matter. If someone's house was worth 400k at the top of the market, but 250k after it collapses, you don't lose any money, you just make less for selling that house (so make up for buying/selling more). I know that kind of sounds like the same thing, but it's different in my mind. I'm sure realtors have made millions of dollars in down markets, and I'm sure you can too. Work hard, harder than anyone else... Work smart, smarter than anyone else and know your market. If someone has been renting for 5 years and saved up 100k to purchase a home and it so happens to be a down market, people like that aren't having a hard time.. they would want to buy as fast as they possibly can. Always buyers and sellers in every market, just network and find the right people, or create a market for someone who otherwise wasn't looking to buy or sell a home.

 Matt

Hi James, New Haven is still not the nicest of places, although the crime has declined pretty steadily over the past 5 years. There was just a shooting across the street from me this morning on Church Street, but I guess like Jacqueline said it's normal in most cities (New Haven being the worst for a long time). They are starting to board up those projects and hopefully relocate those people to somewhere else. Although if Yale University weren't here, this place would be a Detroit, or bad side of Chicago. 

It's unfortunate because New Haven has some extremely nice restaurants and attractions.

Years and years of democratic policies has destroyed our great state of CT, and now it appears for every 1 person moving into CT something like 6-7 are leaving. 

High taxes, big companies moving out and declining home sale prices even though home sales were extremely higher for 2015. We need some new conservative leadership in order for things to make a jump here. Governor Malloy has killed this state. 

Be happy to help you out, as I have lived here for 28 years.

Matt

@Dan Smith

Hi Dan, no offense, but grossing $1,500 is not the same as positive cash flow. After you do the math of vacancy, capex, maintenance, management, trash, water, lawn care, snow removal, taxes etc. you might actually be closer to breaking even than you think.

Simple math would say $4,000 minus 10% Capex ($400), 5% maintenance ($200), 5% vacancy ($200), although I like to use 8% for 1 month. 10% management ($400) and potentially a couple hundred more on the other things = $2800 roughly.

Granted making $100 a door is still awesome, while someone pays your equity down. However, it's a bit misleading to some just to take the total amount of "potential" rent when you move out and minus it from your fixed costs and call it positive cash flow.

Matt

Unless of course, VZ increased 500% in the next 23 years and increased the dividend multiple times in that same period. Of course you could lose money, and this is all speculation. I think the same thing could be said about any forward looking statements. 

However, truly passive is not doing anything where your money is invested and simply collecting a check. 

Also remember, you can sell that stock instantly and have realized cash in your account.

A healthy dose of both real estate and the financial markets should do the wallet just fine. 

my 2 cents, 

Matt

When I think passive, I think dividends. Buy a million dollars of Verizon (one example) and it would give you a yearly income of $43,000 annually or about $3600 a month. Clearly showing a 4.3% divi. 

If you can get by with that, that's the definition of passive. 

Move to the cheapest part of the country that you like, and never do anything again in your entire life :) 

My grandmother lives in Gramercy Park in NYC and hasn't worked for over 40 years because of her father's dividend payments.

Amiris, this thread is a joke right? I can't believe there are people out there that would actually even think about doing this.

Didn't you just post on another thread that spending $3,000 in your life right now was too much to pay for your yearly real estate license/fees?

Now you found a discounted house in an area where you will most likely be raped and killed, but will live in it for 3-5 years to possibly make money, even though it sounds like it will continue to be worth less than the toilet I pee in. 

Just tell us this is a joke, and we can all move on. 

Thanks,

Matt

Passive to me is management in place on every one of your properties so you can sit on a beach and not get a single phone call, unless of course your house burned down. 

10k a month after tax? I want to be rich one day, rich with "F U" money, but I would be happy just to replace my salary at this point and I get a little less than half of that after tax, which is great mind you. Just coming into an office everyday isn't always the most enticing thing lol. 

I think that's a long term goal, unless you hustle, save every penny, find the best deals, and put in 100 hours of work every week for those next 7 years. 

I do have one polish friend, who hasn't stopped working 100 hour weeks for the past 3 years and at 28 he is probably almost at that goal, and he said it's been miserable. He's about to take a 2-3 month vacation then start up again. No life outside of doing the BRRRR strategy really, even meeting girls, family anything. He has just been so miserable lately, but it will pay off down the road.

If you are willing to do that, and educate yourself about all the terminology, all the tax implication, legal aspect. He reads books when he has a moment, listens to audio tapes when driving, and that's his life. Drives a beat up 2000 corolla that looks like a homeless person sleeps in. 

Great thing about today in this country is anyone can be rich if they truly want it. 

PS, cashflow is king. Don't try to pay down your houses quicker, just leverage and build up doors like you said. 

Good luck man!

@David Rutledge

I'm a numbers guy, so I'm sorry if I over analyze this for you :)

Lets say you have a $100,000 house. Obviously 20% down is $80,000 and 15% is $85,000

30 year term 3.5% interest

$85,000 is $382 a month + $31 roughly for PMI until 80% LTV right?

$80,000 is $359 a month, no PMI.

Roughly 36 months of PMI until you get to 80% LTV and the additional $23 a month in payments on your loan. That's $1,944 more you spent for 36 months, then to spend the remainder of $3,056 it will take another 132 months.

Meaning, you won't see your $5,000 extra down payment amount work for you until 168 months or 14 years. Then after 14 years you start to save $23 dollars a month on your loan. Saving you a grand total over 30 years of $4,416 or $12.26 a month over 360 months.

In order to make up for the $12.26 a month you would save by putting an extra $5,000, you would need to make (besides the $12.26) in percent terms, 0.245% or 2.94% yearly. 

FOR ME PERSONALLY, why not put that in the stock market or towards something else?

I know I could easily make $12.26 or 0.245% a month with $5,000 :).

Hope I said everything right and didn't confuse anyone. That's how my brain works. I know it's tiring. 

Thanks,

Matt

@David Rutledge

I look at it this way. Let's say you purchase a home for $125,000 and only need 20% down to secure the loan. The $100,000 loan portion is about $450 a month with a 3.5% interest 30 year fixed. 

If you had $100,000 in cash and said, I want to pay this off to avoid a headache and be safe you would save yourself $450 a month. 450 a month... that's 18.51 years before you start seeing it work for you. 

Now lets say you can secure 5 $100,000 homes with 20% down and they will each net cash flow $350 a month (insert any number you think is reasonable).

$1,750 vs $450 a month. 

congrats, you just made an extra $1,300 a month and have 5 properties with equity being paid by someone else. 

I just don't understand the, pay off your debt as fast as you can people. 

if you bring in more money than you spend, and your paying down equity, how can that even be argued?

Matt

Changing your profile picture, abbreviating your last name and hiding your profile now doesn't change anything. I already know everything about you via the internet and have your information stored in case anyone wants to know about your bank fraud.

Good luck