Want to reach financial independence through real estate? Here’s a conservative approach you can take to own cash flow positive rentals.
Hi there! This post is an illustrated, pared-down version of my recent “Inflation, Explained” podcast episode. It was created as a simple, easy-to-digest guide to help you understand the current inflationary environment in the US. Ready? Let’s dive in! What is inflation? Simple definition: too much money chasing too few goods. – a.k.a. this: –…
Welcome to our First Friday bonus episode.
Once a month, Afford Anything presents a special feature called Invest Anywhere, in which we teach our audience how to invest in real estate from thousands of miles away.
We kickoff today’s episode by discussing current market conditions. Yesterday the Fed raised interest rates by another 50 basis points, which means mortgages are more expensive than they’ve been in years. Additionally, jittery investors worried about an impending recession led the stock market to its worst day of the calendar year so far.
How should we interpret the current market conditions? Is this a good time to buy an investment property? We cover this in the first 20 minutes of today’s episode.
Next, we discuss 5 challenges associated with investing in long-distance real estate investing: (1) fear, (2) accountability, (3) traction, (4) stress, and (5) relationships.
We elaborate on each challenge and offer solutions.
Finally, we discuss 4 benefits to investing out-of-state: (1) competitive ability, (2) diversification, (3) returns, and (4) repeatability. We elaborate on four types of diversification: economic, strategy, business cycle, and asset based.
Enjoy!
On the First Friday of each month, we air a special bonus episode. Historically, these episodes have been the same as our normal weekly shows. They alternate between interviews and community Q&A episodes. But for more than a year, I’ve wanted to create something special, something that makes these monthly bonus episodes stand out from…
The real estate market in 2021 has been bonkers.
That’s the technical term.
From 2012 to 2020, home prices nationwide rose at an annualized average of 5.8 percent per year.
From April 2020 to April 2021, home prices climbed 17.2 percent.
This sudden surge in prices has many homeowners and would-be investors fearful of a crash. The memories of the stark price run-up prior to The Great Recession are all too salient.
What goes up must come down, right?
Not exactly. In this episode, we walk through market fundamentals — discussing housing supply, lumber prices, and the distinction between cheap credit vs easy credit — to illustrate how today’s market is unlike anything we’ve ever seen.
More importantly, we offer tips for everyone — whether you’re a renter looking to get into your starter home, an empty-nester looking to downsize, an owner-occupant who wants to lock in your gains, or a curious aspiring investor who wonders if it’s too late.
Enjoy!
Russell is a busy professional who’d like to invest passively in real estate. Is there data he can use to compare this approach to owning and managing their own properties?
Laura wants to purchase her first investment property in Miami. Should she cash out some RSUs and stock from her company to use as a down payment? And what type of mortgage is she eligible for since she already owns a home?
Jordan and his wife own three properties and are under contract on a new house since they have a new baby on the way. Should he sell any of his existing properties to be in a stronger cash position, thus mitigating the risk of future fluctuations in his income as a real estate broker? Or should he keep his rental properties since his goal is to reach financial independence through rental income?
Do you have a question on business, money, trade-offs, financial independence strategies, travel, or investing? Leave it here and we’ll answer them in a future episode.
Have you ever thought, “I’d like to invest in rental real estate but there are no cheap properties in my area!”
“Homes in my city are too expensive. I’d have to invest out-of-state, but that sounds terrifying.”
Or have you ever thought, “I’m curious about real estate but I’m not a fan of the idea of taking on all that debt.”
Today’s interview is right up your alley. We talk to Rich Carey, who bought 20 single-family rental properties in Alabama, totally debt-free, while stationed in Germany and South Korea.
He invested not just out-of-state, but entirely from outside the country.
He bought his properties free-and-clear. And he did it on a military salary while raising two kids.
This interview originally aired in June 2018.
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!
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.
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.
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.