Afford Anything

Category: Real Estate

By Erin @ Team Afford Anything

#309: Are We Due For Another Housing Market Crash?

Are we in a housing bubble?

Are we going to see a repeat of 2006 all over again?

Are there any good investment deals to be found right now?

These are the questions playing on many people’s minds, and we seek to explore the answers in today’s First Friday bonus episode.

We start by exploring some of the forces that are at play in today’s real estate market. What separates the market of 2006 from the market of today?

In the second half of the episode, Paula explains how and why she chose to buy a duplex in Indianapolis, despite being in a seller’s market. There are deals to be had if you know where to look and what to look for.

Enjoy!

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Written By Paula Pant

How Kelsey Bought a Rental Property in Joshua Tree, California

Kelsey Kaszas loves numbers.

But crunching numbers too much can be a crutch, rather than a tool.

Before she enrolled in Your First Rental Property (YFRP), Kelsey found herself stuck in analysis paralysis. She wanted to invest in rental property, but she kept crunching theoretical numbers without taking action.

“When people talk about how difficult it is to get over analysis paralysis, that is me, that is absolutely me, because I’m such a numbers person,” she said. “I love to analyze every single aspect of something new.”

She’s not alone.

Analysis is great. But analysis paralysis, when overthinking or overanalyzing leads to inaction, is one of the most common obstacles new investors face.

When you’re putting significant savings on the line, analysis paralysis is a normal fear-based response.

But it sidelines you. It shortens your time in the market and the compounding gains that follow.

Kelsey recognized this and enrolled in the course to learn how to rigorously analyze properties without succumbing to analysis paralysis.

She learned how to transform analysis into action.

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By Erin @ Team Afford Anything

#296: Investing is the Art of Probabilistic Thinking

There’s a lot happening in the market.

The Dow is at a new high, there are runaway stocks causing irrational exuberance, and yet, unemployment claims are on the rise. How can this be?

To make sense of this, we’re dedicating today’s show to discuss how improving judgment and using mental models can protect us against risks and short-term thinking. We also touch on the so-called death of cities, and what this means for real estate investors.

This episode is for you if: you’re confused about why the stock market is doing so well while the world definitely isn’t, you’re getting caught up in market trends and wondering if you should make a risky investment, or you’re curious about whether cities will make a comeback after this is all said and done.

Continue reading for a quick preview of everything discussed in this episode.

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By Erin @ Team Afford Anything

PSA Thursday: How to Talk To Your Tenants About Financial Difficulties

Welcome back to PSA Thursday, a mostly-weekly segment in which we talk about how to handle money, work, and life in the middle of a pandemic.

This week, we continue the conversation on evictions. No landlord wants to have to evict their tenant. No tenant wants to get evicted. What can we do, upfront, to prevent such issues from happening? That’s the question we explore in this episode.

We discuss what landlords can do to create and maintain open lines of communication with tenants. Inviting your tenants to communicate with you can help you avoid a situation in which they ghost you.

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By Paula Pant

#266: Ask Paula – Your Real Estate Questions, Answered

Ali is a travel nurse and wants to get into real estate investing. Should she buy a duplex that needs fixing up or a cheaper apartment that’s rent-ready?

Max is torn between investing in a rental property or taking advantage of a mega backdoor Roth 401k through his company. Which is the better option?

Paul’s parents own a property worth $100,000, and they owe $80,000 on the mortgage. If he wants to buy this property from them, how should he do it?

Kate and her husband own a townhome that has appreciated substantially, but they need a bigger house. They’re wondering: is it wise to keep it, rent it out, and use a cash-out refinance as a downpayment on their next property?

I answer these questions on today’s episode. Enjoy!

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Written By Paula Pant

The Lamborgurus, driving their Scamborghinis …

You know those flashy “real estate seminar” types, the ones who wear $10,000 wristwatches and flash cheesy Powerpoint slides of their Lamborghini at you? 🙄

Don’t trust them. (I reaaaalllly hope I’m stating the obvious.)

I call them Lamborgurus, driving their Scamborghinis. They can be found lurking in the spotlight, dispensing a blend of platitudes and high-leverage, high-risk speculative strategies from the stages of big hotel chains.

They can be forgiven for being tacky. But not for destroying peoples’ retirements with their shoddy ‘investment’ advice.

Here’s the thing:

Be careful about choosing who you take advice from. This is true in any arena — health, fitness, personal finance, business, real estate, travel. Some teachers are better than others. The slick, sentient-infomercial Scamborghini types offer the most dramatic cautionary example.

But there’s another reason.

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Written By Paula Pant

“Invest in real estate during a pandemic? Are you crazy?”

“Invest during a pandemic? Are you crazy?”

That’s a reasonable question. Why would anyone want to invest in a volatile market and in the midst of economic uncertainty?

But recessions create opportunities. Yes, it’s terrible that millions have lost jobs and suffered huge portfolio losses, but the unfortunate reality is recessions happen. Like it or not, this is our current situation. By looking at the market and asking “what opportunities can I find?,” we contribute to the recovery. 

We contribute to the recovery in all types of investments: stocks, real estate, side hustles. 

When we buy stocks, we infuse capital into companies that we believe in and/or into the market as a whole. 

When we buy, renovate and rent properties, we create jobs for contractors, agents and property managers and we offer our tenants a safe, comfortable and well-maintained home. 

When we start a side hustle, we build products or services that thrill our clients and create jobs for our team. 

When we invest, we participate in the recovery. Recessions are an unfortunate fact of life, but they carry a silver lining. And for newbie investors in particular, recessions can open the door.   

Unfortunately, during times of uncertainty, many people surrender to their fear of investing. They sit in cash until it’s too late.

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Written By Paula Pant

Um, yeah – so what’s happening with the real estate market in 2020?

The economy is tanking; unemployment claims have topped 30 million; even optimistic analysts say it’ll take years for jobs to fully recover. So what’s happening with the housing market?

To fully understand the residential real estate market, let’s break this down into three sub-questions:

How strong was the housing market before the pandemic struck?
What’s happening now?
Where might it be going?

Here we go!

How strong was the pre-pandemic housing market?

Home values rose steadily after the Great Recession ended. From 2012–2020, home prices rose 5.8% annually, according to the US Housing Market Health Check report from Thomvest Ventures. (All stats in this article come from that report unless otherwise indicated.)

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By Erin @ Team Afford Anything

PSA Thursday: How Is The Pandemic Affecting the Housing Market?

Welcome back to PSA Thursday, a mostly-weekly segment in which we talk about how to handle money, work, and life in the middle of a pandemic.

Before the pandemic, the U.S. housing market was strong. Home prices were at historic highs. Borrowers were more qualified than ever, with two-thirds of mortgage originations going to borrowers with excellent credit. As of January 2020, delinquencies (borrowers more than 30 days late on a payment) reached a 20-year low.

How has the pandemic affected the market? Are we due for another spate of foreclosures? What’s going to happen to housing supply? What about demand? Are buyers still buying? Are sellers still selling? And if you’re thinking about buying a home — either as an owner-occupant or as a rental property investor — what do you need to know about the new pandemic landscape?

We dig into depth in this short, researched-packed PSA Thursday episode.

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Written By Paula Pant

The eerie similarities between owning rental properties and running an online business

In June, I flew to Atlanta and toured a few of my rental units. This was the second visit I’ve made to these properties in four years.

During that visit, I met with my property manager and a few of my tenants, and I had lunch with my contractor. He and I met at a suburban Atlanta strip mall. 

We ordered a basket of spicy chicken wings and fries, then took out a water-logged spiral notebook and planned a $20,000 renovation.

Here’s what the early brainstormed edition of those plans looked like:

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