Gresham Real Estate Investing & Real Estate Financial Planning™ Podcast

How to Analyze Buying a Rental Property at a Discount in Gresham

Some real estate investors insist on only buying properties where they can purchase them at a significant discount. While not mutually exclusive, other investors insist on buying quality properties at a fair price as long as it gets them their desired returns and will stand the test of time.

Buffett began as a deep value investor and eventually shifted his focus towards investing in high-quality companies. “It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price,” Buffett confidently stated that his investing has evolved significantly.

But, in today's mini-class, let's look at how to analyze buying a fair property at a wonderful price... in other words... analyzing a property using The World's Greatest Real Estate Deal Analysis Spreadsheet™ that you bought at a deep discount and required some money to capture some sweat-equity, but that you're planning to keep as a long-term rental.

Or, check out the deal analysis example for Gresham, Oregon:

Deal Analysis for Gresham Buying at a Discount

Free Real Estate Deal Analysis Spreadsheet: Download a copy of the newest version of The World's Greatest Real Estate Deal Analysis Spreadsheet™ by going to:

https://RealEstateFinancialPlanner.com/spreadsheet

Improve Cash Flow: Book a consultation to improve cash flow using our proprietary 88 cash flow improving strategies.

Real Estate Agent & Lender Collaborators: Interested in collaborating with us on the Gresham real estate investor podcast? Book a free consultation to discuss.

How to Calculate PMI

If you're planning to buy a property and put less than 20% down, you're likely to be required to pay Private Mortgage Insurance. Lenders prefer that you put at least 20% down, but if you insist on putting less than 20% down, they may still make the loan. However, they will usually do so at a slightly higher mortgage interest rate for taking on more risk and require that you pay a third party to insure them in case you default. This insurance you pay to the third party is called Private Mortgage Insurance.

But how much is it?

The easiest way to find out is to call your lender and have them calculate it for you.

But, if you insist on calculating it yourself—or you prefer to know some of the factors involved in how to lower the cost of private mortgage insurance for yourself—in this mini-class, James will walk you through how to do the calculation yourself.

In this class, James discusses:

Free Real Estate Deal Analysis Spreadsheet: Download a copy of the newest version of The World's Greatest Real Estate Deal Analysis Spreadsheet™ by going to:

https://RealEstateFinancialPlanner.com/spreadsheet

Improve Cash Flow: Book a consultation to improve cash flow using our proprietary 88 cash flow improving strategies.

Real Estate Agent & Lender Collaborators: Interested in collaborating with us on the Gresham real estate investor podcast? Book a free consultation to discuss.

There are a large number of investing strategies you could pursue as a real estate investor: Nomad™, house hacking, fix and flip, buying 20% down rentals, buying 25% down rentals, saving up to buy free and clear rentals and many, many more options.

These are some difficult questions.

But, in this mini-class James will compare saving up to buy 20% down rental properties to saving up even longer to buy free and clear rental properties. In both cases, the investor will first buy an owner-occupant property with 5% down to live in instead of renting themselves.

We’ll look at how each strategy performs in over 300 US cities and you’ll get answers to many of the questions we posed above comparing these two strategies.

Check out the video and interactive charts from this class here:

https://RealEstateFinancialPlanner.com/model/20-down-vs-all-cash-with-oo/

Or, see Gresham specific, detailed analysis of a variety of strategies here:

https://RealEstateFinancialPlanner.com/model/OR/Gresham/

Free Real Estate Deal Analysis Spreadsheet: Download a copy of the newest version of The World's Greatest Real Estate Deal Analysis Spreadsheet™ by going to:

https://RealEstateFinancialPlanner.com/spreadsheet

Improve Cash Flow: Book a consultation to improve cash flow using our proprietary 88 cash flow improving strategies.

Real Estate Agent & Lender Collaborators: Interested in collaborating with us on the Gresham real estate investor podcast? Book a free consultation to discuss.

Deal Alchemy™ - Increasing Down Payment

There are four primary returns from investing in rental properties: appreciation, cash flow, debt paydown, and the tax benefits of depreciation. Additionally, there is a secondary return in the form of the interest earned on the reserves required to make the investment in the first place.

Many real estate investors prefer the cash flow return over the others.

Often, we can manipulate the investment to shift returns between appreciation, cash flow, debt paydown, tax benefits, and reserves. We call this Deal Alchemy™.

There are many variations of Deal Alchemy™, but in this mini-class, James will guide you through the process of shifting your return to cash flow by changing the down payment amount.

In this class, James discusses:

Free Real Estate Deal Analysis Spreadsheet: Download a copy of the newest version of The World's Greatest Real Estate Deal Analysis Spreadsheet™ by going to:

https://RealEstateFinancialPlanner.com/spreadsheet

Improve Cash Flow: Book a consultation to improve cash flow using our proprietary 88 cash flow improving strategies.

Real Estate Agent & Lender Collaborators: Interested in collaborating with us on the Gresham real estate investor podcast? Book a free consultation to discuss.

Warning - Risks of Rental Property Expenses When Investing in Real Estate

Risk is all around us.

When we choose to invest in anything, we’re choosing to take on the additional risk characteristics of that investment.

For example, when we choose to invest in real estate, we choose to take on the risk characteristics of the specific real estate investing we opt to do minus the risk mitigation and elimination strategies we put in place.

One of the risks of investing in real estate is the risk of rental property expenses increasing.

James discusses those risks and how to mitigate or eliminate them in this mini-class.

Check out the video from this class here:

Warning - Risks of Rental Property Expenses When Investing in Real Estate - Video

In this class, James discusses:

Free Real Estate Deal Analysis Spreadsheet: Download a copy of the newest version of The World's Greatest Real Estate Deal Analysis Spreadsheet™ by going to:

https://RealEstateFinancialPlanner.com/spreadsheet

Improve Cash Flow: Book a consultation to improve cash flow using our proprietary 88 cash flow improving strategies.

Real Estate Agent & Lender Collaborators: Interested in collaborating with us on the Gresham real estate investor podcast? Book a free consultation to discuss.

How to Analyze a New Construction Single-Family Home Property in Gresham

Your ability to analyze deals is arguably the most important skill as a real estate investor. It allows you to make smart investment decisions and helps you avoid making career-ending bad decisions, such as buying cash-flowing-sucking vampire properties.

In this class, James will help you utilize The World's Greatest Real Estate Deal Analysis Spreadsheet™ (a free download) to analyze a new construction single-family home that you plan to buy as an investment.

Analyzing new construction is slightly different from analyzing resale properties, and James will cover these differences in this deal analysis class.

Check out the video from this class here:

How to Analyze a New Construction Single-Family Home Property - Video

Or, check out the deal analysis example for Gresham, Oregon:

Deal Analysis for Gresham 5% Down Single-Family Home Nomad™ Property

Free Real Estate Deal Analysis Spreadsheet: Download a copy of the newest version of The World's Greatest Real Estate Deal Analysis Spreadsheet™ by going to:

https://RealEstateFinancialPlanner.com/spreadsheet

Improve Cash Flow: Book a consultation to improve cash flow using our proprietary 88 cash flow improving strategies.

Real Estate Agent & Lender Collaborators: Interested in collaborating with us on the Gresham real estate investor podcast? Book a free consultation to discuss.

The 3 Strategies to Pay Private Mortgage Insurance (PMI)

Whether they're putting 15% down and buying a non-owner-occupied property or utilizing an owner-occupied loan with 0%, 3%, 3.5%, or 5% down for Nomading™ or house hacking, some real estate investors will choose to put less than 20% down. With the decision to put less than 20% down comes the choice of how to pay for private mortgage insurance (PMI).

There are three options (plus some combinations of the three options): up-front lump sum, lender-paid, and monthly. And, as you might have guessed, there are pros and cons to each option.

In this mini-class, James will cover the three options and go over the pros and cons of each.

Check out the video from this class here:

The 3 Strategies to Pay Private Mortgage Insurance - Video

In this class, James discusses:

Free Real Estate Deal Analysis Spreadsheet: Download a copy of the newest version of The World's Greatest Real Estate Deal Analysis Spreadsheet™ by going to:

https://RealEstateFinancialPlanner.com/spreadsheet

Improve Cash Flow: Book a consultation to improve cash flow using our proprietary 88 cash flow improving strategies.

Real Estate Agent & Lender Collaborators: Interested in collaborating with us on the Gresham real estate investor podcast? Book a free consultation to discuss.

Investing in real estate is full of truthy-sounding falsehoods: it is always better to do X than Y. However, if you were crazy enough to sit down and do the math, you'd find the truth to be much more nuanced.

For example, should you take all your extra cash flow and savings and apply it to your mortgages each month to pay off rental properties faster? And if you do, is that a faster path to financial independence? Does it result in your having a higher overall net worth? A higher overall standard of living in retirement? Is it less risky to do that?

That's what we will discuss in this special comparison class.

I have analyzed over 300 US markets for someone utilizing the Nomad™ real estate investing strategy in two flavors. In one group, they do the traditional Nomad™ model and do not pay anything extra to pay off their mortgages early. In the other group, they do Nomad™ but they apply extra cash flow toward paying off their properties early.

Which group performs better in the metrics we outlined above? Is it universally better? Or is it market-dependent?

Find out in this mini-class.

Check out the video and interactive charts from this class here:

https://RealEstateFinancialPlanner.com/model/nomad-or-pay-off-early-with-cash-flow/

Or, see Gresham specific, detailed analysis of a variety of strategies here:

https://RealEstateFinancialPlanner.com/model/OR/Gresham/

Free Real Estate Deal Analysis Spreadsheet: Download a copy of the newest version of The World's Greatest Real Estate Deal Analysis Spreadsheet™ by going to:

https://RealEstateFinancialPlanner.com/spreadsheet

Improve Cash Flow: Book a consultation to improve cash flow using our proprietary 88 cash flow improving strategies.

Real Estate Agent & Lender Collaborators: Interested in collaborating with us on the Gresham real estate investor podcast? Book a free consultation to discuss.

Deal Alchemy™ - Cash Flow to Debt Paydown

There are four primary returns from investing in rental properties: appreciation, cash flow, debt paydown, and the tax benefits of depreciation. Additionally, there is a secondary return in the form of the interest earned on the reserves required to make the investment in the first place.

Many real estate investors prefer the cash flow return over the others.

Often, we can manipulate the investment to shift returns between appreciation, cash flow, debt paydown, tax benefits, and reserves. We call this Deal Alchemy™.

There are many variations of Deal Alchemy™, but in this mini-class, James will guide you through the process of shifting your return from cash flow to debt paydown, resulting in a higher overall return.

Check out the video from this class here:

Deal Alchemy™ - Cash Flow to Debt Paydown - Video

In this class, James discusses:

Free Real Estate Deal Analysis Spreadsheet: Download a copy of the newest version of The World's Greatest Real Estate Deal Analysis Spreadsheet™ by going to:

https://RealEstateFinancialPlanner.com/spreadsheet

Improve Cash Flow: Book a consultation to improve cash flow using our proprietary 88 cash flow improving strategies.

Real Estate Agent & Lender Collaborators: Interested in collaborating with us on the Gresham real estate investor podcast? Book a free consultation to discuss.

Warning - The Risk of Down Payment Size When Investing in Real Estate

Life is full of risks. When we choose to invest, we choose to take on additional risks.

If we invest in stocks, we choose to take on certain risks. When we choose to invest in bonds, we take on different risks. When we choose to invest in real estate, we choose to take on additional and different risks.

One of the risks associated with real estate investing is the risk of down payment size.

If you put a large amount down—or even choose to pay cash and put 100% down—you have certain risks. If you choose to put a small amount down—or even nothing down—you have other risks. These risks change with the amount you put down.

In this mini-class, James will look at the risks associated with the amount you put down when investing in real estate.

Check out the video from this class here:

Warning - The Risk of Down Payment Size When Investing in Real Estate - Video

In this class, James discusses:

Free Real Estate Deal Analysis Spreadsheet: Download a copy of the newest version of The World's Greatest Real Estate Deal Analysis Spreadsheet™ by going to:

https://RealEstateFinancialPlanner.com/spreadsheet

Improve Cash Flow: Book a consultation to improve cash flow using our proprietary 88 cash flow improving strategies.

Real Estate Agent & Lender Collaborators: Interested in collaborating with us on the Gresham real estate investor podcast? Book a free consultation to discuss.