All Forum Posts by: Steven Sansone

@Mindy Jensen thank you for your response! I created a board on Pinterest that I'm using for REI now. I'm looking forward to that feature coming back to BP! Thanks again!

@Mindy Jensen @Brandon Turner can either of you help with this?

Anyone know if there is a way to save BiggerPockets articles on the site? Some way to go back to it easily rather than having to search for it again? Maybe like a favorites function?

If not, I would love to see that function added to the site. Favoriting/saving an article that you can find from your dashboard/profile page (right now I have a word doc with a bunch of links to different articles).

Thank you for your help!

@Joanna Dennis I've listened to it 3 times now too! He does such a good job of making the explanations really easy, and you're right, it's very easy to relate to right now with the yield curve inverting. 

@Brian Ploszay are you seeing that at all in the Chicago market?

Just listened to BP show #311 with guest J Scott (I know I'm late to the party). If you haven't had a chance to listen to it yet, you should. J talks about his 6 tips for REI in the current market. As someone who constantly goes back and forth on whether to wait for the next market downturn or just start now and worry about the downturn when it comes, these tips helped me a ton. To be clear, these are not my tips. All credit goes to J Scott. Hopefully this helps you!

1. Be certain of your numbers - make sure all your numbers are as accurate as possible. Verify your numbers as much as you can.

2. Stay away from long rehabs - quick rehabs are a safer in this market. Holding costs can quickly pile up if your property is being rehabbed for months and months, and a downturn could turn your "quick flip" into a lengthy buy and hold. 

3. Have a backup strategy - nobody buying your flip? Try the BRRRR strategy. Or Air BnB. Or student rentals. Don't get caught in an all-or-nothing strategy. Be able to adapt.

4. Avoid thin deals - thin profit margins are risky. Assume the biggest drop you could see the market taking, and make sure that's your minimum profit target. 

5. Keep clear of leverage at all costs - if the market drops farther than the equity you have in a property, you start losing your lender's money. Also, the more you borrow, the more expensive your holding costs will be. Don't borrow more than you absolutely need to. 

6. Stay away from high-end properties - when the market begins to slow down, the first properties that lose value are high-end properties. 

I added the link to the show. You should absolutely give it a listen, as J goes into all of these points in depth and really makes it easier to understand. Again, ALL CREDIT FOR THESE TIPS GOES TO J SCOTT. 

https://www.biggerpockets.com/blog/biggerpockets-podcast-311-rules-investing-real-estate-coming-economic-shift-jscott/

Along with J, do you have any tips for RE investors in the current market? Let me know below! Best of luck!!

In addition to @Benjamin Seibert 's suggestions, the Richest Man in Babylon is a great book when starting out. 

@James Rodgers

@George Blower

GREAT information!!

Correct! One of the key drivers behind picking the Roth feature is to avoid paying taxes at a higher rate if you believe you'll be in a higher tax bracket when you retire. Unfortunately, I don't have a pros vs cons list. I would say your best bet is talking to your HR manager (or whoever handles your retirement plan administration). Ask them specifically if you can speak with the adviser on your retirement plan. Your adviser should be able to walk you through your options in regards to taking out a loan from your plan for REI purposes.

Hey Trevor! Psyched to hear you're working towards a property in this tight market. Good luck! I'm a licensed financial adviser that works primarily in the retirement plan space. New to the REI world, but really interested in it. First of all, a 50% match is an insanely generous match from your company. Most companies tend to match 3%-5% of your contributions (if they offer a match at all).

I can tell you that borrowing against your 401(k) to buy a home is something many people do. Most people like the idea because they are "paying themselves the interest." However, be aware that you will face double taxation. While your loan comes out tax-free, you have to pay it back with after-tax dollars. When you eventually retire, the distributions from your 401(k) will be taxed. So the value of your loan (+ the interest) is taxed twice. 

If your company offers a Roth (after-tax) feature and you're using it, you'll avoid that second tax. 

You'll also have to pay back that loan in full before you leave the company (if you leave before its paid off, your 401(k) account balance will be used to pay it off.)

Not really REI information, but I hope this helps you out!