All Forum Posts by: Rusty Thompson

The article is pretty accurate picture of what it was like growing up. I feel like it is a sad story that is repeating itself around the nation as communities try to deal with the changing realities of the economy.

NY Time Article

For a few reasons

I've worked full time since I was 18 at a few different jobs. And after the new wore off, the old would shine through. At the end of the day I was going to a place I would rather not be, to do a job I would rather not do, to earn money to survive... To hope for a eventual future where I can retire for the 8 years before the statistically probable death at 73. A lot of people say that I should just find something that I love to do, my answer to that is that there a lot more jobs cleaning toilets than rubbing oil on bikini models. The reality is that we need people to work jobs that no one wants , so the few of us can do the things we want. I decided I wanted to be that person & after looking at a few options REI is the easiest way to get there. Financial Independence means I could specialize in weaving underwater baskets & never have to care about were my next meal is going to come from.

@Brandon Turner 

You should edit to take make it more generic & post it in the file place

I think your monthly income is going to have a lot to do with your decision. Can you buy two houses with your current monthly? How much cheaper of a house can you get in your area? Will your wife feel comfortable living in those neighborhoods. What are your goals? Do you want to be a full time REI, or are you working on your retirement?

Personally, if I could rent it for 1500$, I would keep it & pull the equity out via a HELOC. Then look for a smoking deal on either a SFR or MF, which ever makes the most financial and life sense for you. It's true that it will just be covering it's expenses for the next 14 years, but then you have a debt free property.

I invest in Salem and do quite well. There are several small growing towns in the area that you may consider looking into.

If you really like the idea then buy a run down mobile home park and replace the units with "tiny homes". A group of tiny homes on less area than zoning requires for the same number of SFH is a trailer park. Dressing it up with fancy words doesn't change the fact. I'm sure a lot of people were enamored with the apparent affordability of Mobile homes in the 50's when it started. The reality is, in the long term it didn't last & over time this movement will fall out of popularity as well.

Since it sounds like you are happy with your job I would convert your current home back to a duplex. Rent it out. Buy another house, duplex, triplex or 4-plex on a owner occupied loan. Which will get you the best down payment & interest rate. Rinse and repeat until you max out the 10 conventional loan limit. 

@Sean Gallagher 

I feel like your strategy is going to be very difficult to pull off. You are looking for newer properties on the MLS that don't need that much work for substantially under market value... and so is everyone else. You are competing with Home owners, Buy and Hold investors & Flippers. Which means you are relying on mostly luck. Especially in a market that has been heating up. Very few people are going to drop their price in under 30 days & if their agents now they are looking to liquidate fast then it is already going to be marketed at a lower price to encourage a multi-offer situation.

Here are some thoughts.

Short sales are still selling at a discount, make a offer on every shortsale that comes up. Maybe one will bite. They can take a long time to accept your offer, which is why it is best to get a lot of them going at the same time.

Auctions properties are pretty good since your usually only bidding against other investors. There is usually a buyers premium so be aware of that when you buy

Consider direct marketing to owners. There are several Podcasts and articles written on marketing to motivated sellers. Great option since you are not dealing with a direct market.

Learn to evaluate a deal & search for properties yourself. Then make offers through the listing agent while offering them a double ended commission. This creates motivation on the listing agents part to close your deal. This wont work for deep discounts, but if you find a killer deal on the MLS is might work. I have yet to find a reason to work with the a buyers agent. They just slow you down and direct you towards deals that might not be the best in a attempt to earn a commission. Focus on the motivations of everyone involved and decide how you can use it to you advantage.

The confusion caused by blanket statements is one of my biggest pet peaves. Every Rental market is different around the US and it changes every year. It also depends on where you are in your lfie. Choices made by a single person, a family with kids, or a retired person will be completely different.

I am a single professional, who house hacks. It gives me the greatest return for my investment in my market. Even if I had a family I would still probably own in my market as with current mortgage rates I can buy for about half of what I can rent for. If I lived in a different market, such as New York or San Francisco  I would probably rent and invest in another market, or move to another market.

Every hard money lender is different. But this is how mine works. I send them the details of the property including ARV, projected repair costs, details of the repairs being undertaken, how I will be funding the reparis & any comps I am using to determine value. Mine will not fund over 70%. They let me know if they will loan on it. I put the property in escrow. They fund the deal through the title company just like a conventional loan. I make my payments to them. I have to pay taxes & insurance separately. The house is collateral on the loan. It is a lot like getting a conventional loan except for the qualifications are different.