All Forum Posts by: Robert Perkins

Verbal agreements are legal but not enforceable. Written agreements/contract are legal and enforceable. Your agent knows this but you are ultimately at fault (sorry to put it that way). A better way might be to give your agent a time frame when he/she will have addenda signed and in hand. Let them choose the time frame so that they will feel responsible for it.

Justin Morris My suggestion is to read as many books as possible on REI by people who have done it successfully. Then save for your first down payment. No money down is risky and should be left to those who can afford to be risky. I started out just like you describe here: ready to get started and no money. I read several books on the subject and saved like crazy for my first property. Also, be careful once "the doors open" even Donald Trump doesn't have the golden touch. Study. Save. Buy. Learn from Failure and Success. Repeat.

Good Luck in future investing!

Dean, thank you for the update. My concerns are verified. BP is a great resource and its free.

Jon Holdman To clarify: Appreciation is abroad term that IMHO is either inflation or forced equity (fix and flip or maybe just fix and increase the rent). More over as the Fed "prints" more money and buys mortgage backed securities this increases inflation over time as that money makes its way into the market. Eventually inflation will cause housing price to rise and if you're properly leveraged then you "make" more than the rise in home prices. Although this increase will not show up on future versions of the Case-Shiller data chart.

I completely agree with your assessment of depreciation but in does help your bottom line so I added it to the list.

As far as amortization is concerned before you have recouped your initial down payment minus opportunity cost it is considered a return of investment (as opposed to a return on investment or a return of principle). But after that amortization is savings however your tenants are making those payments therefore I call it a win.

As always great discussion.

Welcome to BP Joe. I am currently in the military as well. You are in the right place. My first properties are still invaluable lessons. Also, I believe that military leadership lends itself well to business ownership as well as real estate investing. Good Luck and take a look around BP.

John Jabson IMHO, there is little money to be made in property management-it is more about getting the listing down the road and keeping the property in good condition to command a high sales price.

Welcome Philip,

Here are a couple of things that I think few real estate investors can deny:

There are four ways to make money in real estate:

1. Appreciation
2. Depreciation
3. Amortization
4. Cash Flow

Real estate allows for all of these to happen at once.

It is up to you to decide which to focus on-this is your personal investment strategy and should be reviewed often.

One last thing: Before you choose a property choose ensure that the market and tenant base is there to support you.

One other last thing: Leverage is OK and money is cheap right now.

I wouldn't go with an online mortgage company. Also IMHO it is best to wait until you have a property in mind before go to a bank.

Owner Occupied

Sandy Blanton I must respectfully disagree with you regarding whole life insurance. I have found it to be a perfect investment vehicle. I use AAFMAA (Army &Air Force Mutual Aid Association). Every penny I put into it is immediately added to cash value. Last twelve years have averaged 6.8%. I would agree that when the market does %25 I will probably make less than half that but when the market loses big I make at least %4.5 by law. And that has never happened with this company since inception in 1879. They paid dividends through the great depression.

There are specific way to set up a whole life policy that will allow for immediate cash value to accrue interest.

I do see your point though. Most whole life insurance policies are not set up for immediate cash value. And if they are not, then they are terrible investments.