All Forum Posts by: Wilson Churchill

The financial gurus sometimes put emotions before math. There are three main points that I disagree with:

1. "snowball" - This method calls for paying the smallest debt first, to satisfy "feelings". In each and every case, the debt with the highest rate should be paid first, all other things being equal (avalanche).

2. Debt is bad - No, leverage is powerful, so long that the risk is minimized and accounted for. With real estate debt, having ample cash reserves or other means to cover unexpected, large expenses is key.

3. Pay off consumer debt before investing - Not all consumer debt should be paid off if the return on investment is higher than the interest rate on the consumer debt. Although it isn't fun to have 20k in student loans at a rate of 6 or 7%, for example, if a significantly higher rate of return can be achieved by investing the money rather than using it to pay the debt, it should be invested, especially when investing in real estate. Sure, you could spend 20k to pay the loans off, but you could also use that same 20k to purchase a property "for cash", and begin a BRRRR strategy, reclaiming your initial investment.

Having said all of that, there is a strategy for credit card debt that people should be made aware of:

1. Pay off the credit card debt

2. Request increases in the credit limits

3. Re-borrow the money using zero or low interest rate promotions

4. Repeat to build credit lines and access cheap capital

Turbotax works, if you know what you are doing. You also have access to tax advice from a CPA, EA, or JD. I would advise anyone doing their own taxes to read and understand Publication 527 thoroughly (for rentals).

I like Section 8. If they damage the property, you can contact the Housing Department to let them know. When they move, they can't keep their voucher if they still owe money for rent or damages.

 I, unfortunately missed the boat when prices were at their lowest. I was unable to buy at the time. Ferndale seems to have reasonable prices from time to time, but the taxes always kept me away from considering buying a house there.

 Hello Brian,

Where do you currently own houses? Have you seen prices go up a lot in those areas?

How much do you like the car? Is it in otherwise good condition? I just had a transmission rebuilt for 1900 earlier this month, using quality parts.

Although you will get a low interest rate, financing a car requires full coverage insurance, increasing the cost otherwise.

I try to provide as little information as possible. I let anyone fill out an application. I screen all applications. If I need to reject someone politely, I simply tell them that I have approved another application that was completed before theirs, and that I chose them because they applied first and I have to be fair. This is easier than telling someone that your search at the courthouse revealed multiple evictions and judgments and lets them down easily.

You could leverage that with an FHA loan.

It sounds like it should have a positive cash flow. The taxes seem high at $1,200 for a 30k house, so that will affect your annual numbers.

You should be able to make a few grand a year by renting, or you could offer an option to buy at 40k after a year or two and roll the total profits into another deal.

I agree with others saying that you could use credit cards. This is my favorite way to buy a property. Use cards with balance transfer promotions. You should be able to borrow money for 12 - 18 months at 0%, with no fee or a fee of 3 or 4%. The payments may be a little higher than an amortized loan, but the payments will be going to principal, and will still be small payments.

Once the cards are paid off, you should be able to request an increase on the credit lines.