Death cold
Today I think I've finally recovered from the death cold I had. Yesterday I was in much worse shape than I've been in a long time. I'm guessing it's one of those "darkest before the dawn" types of things. Either that, or the infection released some sort of toxin as it dies, which apparently is a common bacterial tactic. Hard to say which it was, but yesterday I was a pathetic puddle of goo and today I'm feeling much better. Not perfect, but better.
Today I took a long lunch and went down to my investment company's branch to wire the money needed to close on my house, which I'll do next Wednesday. It was interesting how they wouldn't do it over the phone and needed me to fill out a form and get someone special, but not a notary, to vouch for my signature, then mail it off and wait a week for them to process it. But when I went down there in person, they didn't even ask for ID and would have it done by the end of the day. Lucky for me I'm actually me, and not someone trying to rob me blind.
Tonight I attended a class on purchasing investment property. It was reassuring and a little bit informative. Basically they reiterated the idea of leveraged buying and we were able to ask a lot of questions regarding the lending processes for investment property (which are quite different than those for owner occupied houses). It all starts with making up your mind to actually buy a property, and I've not quite done that, but I'm close. Buying before April makes the most amount of sense as property values are depressed during Winter, but having just bought one house, I'm not sure I'm willing to go through that hassle again quite so soon.
It looks like if you have enough for the down payment, that you can get a decent amount of cash flow while basically letting someone else buy your house for you. Making only interest payments, they figure that in a few years you'll have enough equity in the property to use it as the down payment on your next property. In a few more years you'll have two properties to pull equity from, and then four, then eight, and so on. Ten to fifteen years from when you start you should have a large quantity of properties and lots of positive cash flow. The one part I don't quite understand is why he recommends a 5 year interest only loan, figuring that he'll sell the property within that time, and yet he still figures he'll have 30+ properties in 15 years. Maybe you trade one property for two once it's got enough equity?
I definitely need to research things more, especially considering that earning 10% in the stock market is a reasonable proposition and getting that sort of return on a property is a mildly ambitious goal (unless you're in Silicon Valley!). However, it's a good way to diversify, so maybe I should look at it that way.
Today I took a long lunch and went down to my investment company's branch to wire the money needed to close on my house, which I'll do next Wednesday. It was interesting how they wouldn't do it over the phone and needed me to fill out a form and get someone special, but not a notary, to vouch for my signature, then mail it off and wait a week for them to process it. But when I went down there in person, they didn't even ask for ID and would have it done by the end of the day. Lucky for me I'm actually me, and not someone trying to rob me blind.
Tonight I attended a class on purchasing investment property. It was reassuring and a little bit informative. Basically they reiterated the idea of leveraged buying and we were able to ask a lot of questions regarding the lending processes for investment property (which are quite different than those for owner occupied houses). It all starts with making up your mind to actually buy a property, and I've not quite done that, but I'm close. Buying before April makes the most amount of sense as property values are depressed during Winter, but having just bought one house, I'm not sure I'm willing to go through that hassle again quite so soon.
It looks like if you have enough for the down payment, that you can get a decent amount of cash flow while basically letting someone else buy your house for you. Making only interest payments, they figure that in a few years you'll have enough equity in the property to use it as the down payment on your next property. In a few more years you'll have two properties to pull equity from, and then four, then eight, and so on. Ten to fifteen years from when you start you should have a large quantity of properties and lots of positive cash flow. The one part I don't quite understand is why he recommends a 5 year interest only loan, figuring that he'll sell the property within that time, and yet he still figures he'll have 30+ properties in 15 years. Maybe you trade one property for two once it's got enough equity?
I definitely need to research things more, especially considering that earning 10% in the stock market is a reasonable proposition and getting that sort of return on a property is a mildly ambitious goal (unless you're in Silicon Valley!). However, it's a good way to diversify, so maybe I should look at it that way.
posted by Mark at 9:40 PM
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