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Firs time investor here. Im looking to buy a multifamily unit here in the next few months. I am reading the market it inflated at the moment and was wondering when would be a good time to strike?
I figured with this entire covid situation, the market should be cooling down a lot in the fall?
How are the banks with investment loans at the moment ? I am currently refinancing my house im in now and they are definitely tighter than before...
Tenants keep losing their jobs and can't pay rent.
They can't afford to move.
Landlords can't evict non-paying tenants because of moratoriums on evictions.
This is not a good time to buy rentals properties unless you have $50,000 in the bank to survive long periods of no income from the property.
Tenants keep losing their jobs and can't pay rent.
They can't afford to move.
Landlords can't evict non-paying tenants because of moratoriums on evictions.
This is not a good time to buy rentals properties unless you have $50,000 in the bank to survive long periods of no income from the property.
Jack has a tendency to post a lot of nonsense on the forum. But here, he has nailed it.
Bad time to be a first time investor, if you have to borrow money and will need the rental income to tote the note + rent non-payment + fixed and surprise expenses + vacancies unless you will be sitting on a pile of cash.
Right now, and for the last several months or more, I am telling 1st time investors who need to borrow to sit back.
Jack has a tendency to post a lot of nonsense on the forum. But here, he has nailed it.
Bad time to be a first time investor, if you have to borrow money and will need the rental income to tote the note + rent non-payment + fixed and surprise expenses + vacancies unless you will be sitting on a pile of cash.
Right now, and for the last several months or more, I am telling 1st time investors who need to borrow to sit back.
even if its a good deal ? Wouldn't this be dependent on the current real estate market in a certain city at the moment ?
I always read its good to buy when no one else has the cash and market steers south.?
If you are considering investing in real estate, you need to understand how to evaluate the returns on investment.
The TOTAL RETURN ON INVESTED DOLLARS, is as the Wall Street Journal said in 1980, the Total Return On Invested Dollars is the only way to evaluate real estate, and has been in numerous books on real estate investing, and taught in classes.
This is the sum of:
1: Cash flow return, which is the total net cash flow, less all expenses, less repairs maintenance, etc., divided by the total amount of cash invested.
2: Amortization return, which is the amount of loan amortization for the year, divided by the total amount of cash invested.
3: Appreciation return, which is the appreciation or depreciation from a year before's market value, divided by amount of cash invested. Yes their can be a minus depreciation if the value of the property declines.
4: Tax benefit return, which is the savings due to tax benefits, divided by the value of the amount of cash invested.
The Sum of those 4 returns, is the total return on invested dollars. It will change if a different down payment is made, etc. Different properties will have different Total Returns On Invested Dollars.
The so called 1% rule, is not adequate method to judge an income property, and can lead you into trouble.
This next year, can be an excellent time to buy an income property, IF (big IF) you have sufficient cash on hand to handle things till the eviction freeze is over. There are going to be some great buys, as people cut prices, to get out from under a property with frozen eviction problems, and cannot afford to weather the storm. But if you buy in this market, you have to have available cash to weather the period we are in.
Unless you have this cash reserve, stay away from income property at this time.
If you are considering investing in real estate, you need to understand how to evaluate the returns on investment.
The TOTAL RETURN ON INVESTED DOLLARS, is as the Wall Street Journal said in 1980, the Total Return On Invested Dollars is the only way to evaluate real estate, and has been in numerous books on real estate investing, and taught in classes.
This is the sum of:
1: Cash flow return, which is the total net cash flow, less all expenses, less repairs maintenance, etc., divided by the total amount of cash invested.
2: Amortization return, which is the amount of loan amortization for the year, divided by the total amount of cash invested.
3: Appreciation return, which is the appreciation or depreciation from a year before's market value, divided by amount of cash invested. Yes their can be a minus depreciation if the value of the property declines.
4: Tax benefit return, which is the savings due to tax benefits, divided by the value of the amount of cash invested.
The Sum of those 4 returns, is the total return on invested dollars. It will change if a different down payment is made, etc. Different properties will have different Total Returns On Invested Dollars.
The so called 1% rule, is not adequate method to judge an income property, and can lead you into trouble.
This next year, can be an excellent time to buy an income property, IF (big IF) you have sufficient cash on hand to handle things till the eviction freeze is over. There are going to be some great buys, as people cut prices, to get out from under a property with frozen eviction problems, and cannot afford to weather the storm. But if you buy in this market, you have to have available cash to weather the period we are in.
Unless you have this cash reserve, stay away from income property at this time.
Thank you! At the moment, I am not jumping into anything. I am doing researching and carefully studying the area and how long things take to sell.
For cash reserves, im reading at least 6 months ? I do have enough cash on hand already and actually in the process of refi of current home to cash out additional funds to have for a purchase. When do you expect the rent freeze to expire ? Im looking to buy in october-november if I can find the "right one"
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