Economy bad? Buy a house!

[MiamiRob]

Originally Posted by forest beekeeper

We have owned a number of run down slums.

We have bought when they are run-down and undervalued, in need of lots of repairs [but all repairs were within my ability of things to fix].

Never pay a penny down-payment, always finance 100%. We have done zero-down mortgages every decade since the 80's.

Never pay any mortgage payment using your own money. There is always too many folks out there with money in their pockets who will pay you 'rent' so that you can make your mortgage payments.

Your hard earned money is better spent elsewhere, never on mortgage payments.

I am not a fan of flipping either.

Keep each property going and it is building Net Worth, while it is sheltering you from taxes. When you flip one, it is harder to shelter the profits. You are forced to re-invest in 'like-kind' property, and even then the basis builds up.

yes but don't you need good credit for 100% financing? and if you never make mortgage payments don't you have to have the properties rented and repairs done?

[Submariner]

Originally Posted by MiamiRob

yes but don't you need good credit for 100% financing? and if you never make mortgage payments don't you have to have the properties rented and repairs done?

Yes, we have 'good' credit. The bank really can not look at my income for making the mortgage payment, it is a business, and has a business income. The rent monies cover the mortgage, taxes, utilities and repairs. My income is looked at, in the context of my ability to support my family while doing this. We have had to remind banks of this.

And so far every place that we have bought has been full of tenants [minus one unit]. When MFRs are on the market, they are usually already full of tenants, and during escrow you are asked if you want the tenants to stay, or if you desire the building to be emptied.

As it has worked out in our case, each time we have moved into one unit of the building, signed new leases with the remaining tenants, and we have collected the first month's rent; before our first mortgage payment has come due.