All Forum Posts by: Michael M.

At times like these I'm reminded I'm not a real estate analyst. They might say pick a better location to buy with a higher population, newer construction and plentiful employment.

I didn't even submit an offer on that property. The base already has housing available and likely of newer construction:

http://usmclife.com/bases/29-palms-california/mili...

Since rents and housing are linked to real wages, the "Detroit of the dessert" while attractive in price, is lacking in employment for me and potential tenants.

Since I'll likely house hack, I'll need an employer as well until my assets cashflow offset my living expenses.

I plan to use the BRRRR strategy wherever I end up.

Here's what know about 29 Palms:

1. Some property parcels in 29 Palms are on Indian land that's been leased to the homeowner, resulting in a very low sales price.

2. Most property in 29 Palms use a septic tank. Septic tanks need to be occasionally drained or replaced.

3. There are limited sources of employment in 29 Palms.

4. It's hot and windy in 29 Palms.

I figured I needed a steady paycheck to back my efforts before I got there.

@ Tommy F. Publication 527 is legit, thanks! I don't mind house hacking to start. I came across a fixer duplex in 29 Palms; rough neighborhood with few jobs, property line looked off, not impossible to fix though. I decided I needed a base income in case it went vacant.

Long term goal: own positive cashflow rental property in southern California (I'm aware cashflow in CA is low compared to other markets).

Short term goal: earn and learn what it takes to own positive cashflow rental property.

Strategy: Get Real Estate License (3 months to gain credibility), then apply to job postings as leasing agent, title company, property management or any real estate related activity that earns me $3,000/mo gross income for living expenses.

Question: Is this a good strategy? Would you choose this path if you had to start over?

My why: I want my own house. I'm living like a gypsy and it sucks. I believe the sellers market is shifting to a buyers market in the next one or two years. Before that happens I want to be knowledgeable and financialy capable to scoop up my first deal.

About me: Male, 42, no kids, CA native, no college degree, shaky job, looking to leave the rat race and control my destiny. Former HOA president of 8 years, in average physical shape.

The punching bag is set start swinging, thanks.

One of my biggest Robert Kiyosaki aha moments was the cashflow quadrant, how he was never satisfied being an employee, and how he wanted his money to work for him rather than work for his money. Most of the BP guests default recommended book is Rich Dad Poor Dad. I'm suprised how many rich dad imposters have shown up over the years trying to sue Robert out of his millions but I digress. Comisson sales jobs are some what plentiful. My main issue is that people don't like getting pitched. Building trust and interest are at the heart of podcast IMHO, and that's why podcasting often turns into another plug on the book on low and no money down real estate investing *cough. I've often heard information products have %50 margins and scale like crazy for years.

@ Brandon L, your right, Robert Kiyosaki learned his sales skills at Xerox. I just listened to him yesterday. Commission jobs...hard to live off of but I need those skills. Thank you for the reminder.

Update: I'm still holding down the job, passed on the 401k, not enough income, paltry company match, no control of fees.

My general direction is to qualify for a traditional bank loan or one of the new lenders for a primary residence or duplex.

My current vehicle is 15 years old, so I might have to dip into my house fund for something new. I know I should finance deappreciating asstes with cash flowing assets, but a hitch hiker I am not.

At $28k a year gross, I won't qualify for house unless I can get owner financing.

Im still very obsessed with listening to Robert Kiyosaki, Mark Poldosky, Bigger Pockets, and the Norris Group. I stopped listening to Michael Quarrels because he stopped producing content for free that I am aware of. I think these gurus are very much the same, fee for time oracles of past techniques. I'd listen to Arron Mazzrillo if he produced any content but he's got hands full I'm sure.

Since most real estate agents fail within five years due to infrequent sales, I'm not bullish on becoming a real estate agent, unless I use the credential to get into property management of which I do have a background in.

So far I'm a bit undecided between escrow officer or property management. Escrow officer earns a median $47k (payscale.com) while property manager earns a median $45k (payscale.com).

My initial needs are to build a stable base income from which to live off of and and have enough left over to invest wisely. I'm just over 40 and the thought of sinking $40k into a college degree which is a static level of knowledge seems foolish. Corporate america commonly requires such a college degree who's relevance in our ever changing economy is questionable.

Enough ranting from me.

Defined goals: by years end I will have my real estate license as a level of credibility I will either use to gain a position in escrow or in property management.

If someone offered me an a weekend gig in either I'd do it for free just to learn. Dan Lok a smooth talking guru, said he spent one year learning from hisnl mentor Mr. Pena of East Los Angeles, got paid nothing, but that was his million dollar year were he learned a lot and it helped him start out on his own. I'll be meeting people at some point after I get my license and I'm sure be donating my time in hopes of learning to make wise independant financial choices. Well that's my long winded update.

Obviously we are in a sellers market.  If your going to sell, now would be a good time before winter. Since its your primary residence, you keep the gains up to $250k, lucky you. On the flipside, because it's a sellers market you too will pay a higher price to buy now.

If your going to rent, in La Puente you'll likely be renting the house out to multiple families or multiple tenants. My guess is at least 5 people are needed to afford such rents. There will be wear and tear on the property. Get a management company if you plan to rent.

Based on your high income it seems like you can qualify for a new home while renting out your current home. If you rent it out you risk losing current market appreciation to the next downturn.

The game banks play is discriminatory by nature. Going back two years of stable income, high income, and a good down payment, and 75% loan to value equals a good credit risk. Banks don't take into account that circumstances may change. If you lose your income later, the banks don't care because the loan is in place.

@Richard Bronshtein Here are a few tips:

1. Special assesments can be challenged as the HOA BOD has a fiduciary duty to its members. Ask for a payment plan if this is an unexpected financial burden to the property owner. Special assessments are usually a tell tale sign of an underfunded HOA, sadly this is the norm.

2. Banks look closely at HOA owner vs rental occupancy and often won't lend past 5% rental occupancy. Banks tend to favor newer developments that are 95% owner occupied. Discriminatory IMO, but banks are not the only game in town.

3. As previously mentioned I'd eye an SFR as you have more control over the asset. Avoid HOA if you can.

Starting out and developing a base income are what I see as the most challenging starting point to paying for basic necessities in life. Remember don't quit your day job until your wholesale income exceeds your living expenses.