As part of WordPress, the software that runs this blog, I can see the search terms that land people on my site. Almost every day, there is someone asking Google something like “what are my payments at 5% on $400,000”. Figured I’d share with you how I estimate those. If I’m doing a spreadsheet, I … Continue reading “How to determine what your mortgage payment would be”
Category: Debt
Hot rental market = hot market for apartment buildings
The LA Times had an interesting article a few days ago about the state of the LA rental market. Here’s the money quote: “Few new units and tight standards for home loans add to the pressure. The average monthly US rent is at an all-time high, and a 10% jump in Los Angeles County over … Continue reading “Hot rental market = hot market for apartment buildings”
How I feel about Frost / Chaddock invading Sunset Junction
I, for one, welcome our new mixed-use overlords. You’d think I’d be pissed about a developer coming into Silver Lake and building 300+ rental units. After all, the rules of supply and demand would seem to indicate that this new competition will drive down the rents on my units in the area. But I’m thrilled … Continue reading “How I feel about Frost / Chaddock invading Sunset Junction”
How leverage (debt) magnifies outcomes
You heard me say in numerous pieces that leverage (debt) magnifies outcomes. What do I mean by that? Well, let’s examine two identical fourplexes with different capitalization structures. First, here are the operating details: Acquired for $600,000 Annual rents of $60,000 Assume costs of 35% or $21,000 Annual Net operating income (rents minus expenses but … Continue reading “How leverage (debt) magnifies outcomes”
Why do people hire dumb brokers?
Buying a home or income property is a big deal. You’re committing a chunk of your (or your family’s) hard-earned capital, plus taking on an enormous amount of debt. All kinds of things can go wrong, from structural problems, to tenant issues, to badly structured loans, to city inspection concerns, etc. So why do people … Continue reading “Why do people hire dumb brokers?”
All about FHA loans, with Justin Brown, loan broker
[MK: You really, really can buy income properties with as little as 3.5% down through FHA loans. Interested? Read on.] We’ve spent so much time talking about FHA loans, I figured I’d bring in a pro. Meet Justin Brown of Nu Home Financial. Justin’s a loan broker who has recently done some very good work … Continue reading “All about FHA loans, with Justin Brown, loan broker”
Mortgages: Borrowing to save
With a mortgage, you borrow to save. Sounds weird, right? Let’s take a look. Do you know what actually happens with a mortgage payment? Sure, you send it off to the bank each month (or, more likely, it’s deducted from your bank account automatically). But do you know what’s really going on? The easiest way … Continue reading “Mortgages: Borrowing to save”
Buying a single family home for investment purposes
Recently, I’ve had some people approach me about buying houses for investment purposes. The concept is simple: There are loads of people out there who either can’t or won’t buy a house right now. They choose to rent (hopefully from me!) instead. But there are lots of people trying to sell their houses… both individual … Continue reading “Buying a single family home for investment purposes”
Why you should get pre-approved for a loan
Say you decided to sell your building and I offered to buy it. Say I offered you the following deal: I’ll buy your building for $1MM, but first I want you to guarantee you won’t sell it to anyone else for the next 45 days while I get the money together. You would be an … Continue reading “Why you should get pre-approved for a loan”
OK, I want to buy a building. What do I do first?
Call me. J/k. Sort of. The first thing you need to do is take stock of your current position. Here is what you need to get started: A decent credit score. FHA will loan down to a 580 score, but ideally you’d be north of 700. A stable work history. The ideal loan applicant would … Continue reading “OK, I want to buy a building. What do I do first?”