Investing 102

[slow4dr]

I have been lurking in this thread for a while but I figure now is as good of time as any to join in and contribute anything I can (which is minimal).

What I've done may be considered crazy to some but when you have minimal cash flow you really have to think outside the box. The old saying of be aggressive when others are scared and be scared when others are aggressive has worked for me. I had some great help from not only my boss who also has rentals but a great family friend who at his peak had over 20 SFR's being rented.

BTW: I fit the "other" classification that 'glassman' mentioned above since I am 70 miles East of L.A.

Just a little back story:

*Bought my first house in 2001 with a 80/10/10 loan (primary residence)

*Refi'd house #1 in 2002 to a 15 year loan compiling all 3 loans (rates had dropped far enough that my payment stayed the same)

*Refi'd house #1 again in the Summer of 2010 (this is where many would call me crazy but I went back to a 30 year loan to keep cash flow more positive).

*We bought a bigger primary residence (house #2) with only the minimum required for an FHA loan in December 2010. Using an FHA loan allowed me to keep more cash in hand. IMO too many people are hung up on saving just enough to have 20% down and then they don't have any cash left over for back up. I'd rather not tie up that cash (since I didn't have a lot of it). This was my first swing at a rental property so I was preparing myself for the worst. I wasn't in a position to wait while I saved more any longer because my local market had already started climbing back up by this time.

*I was able to rent house #1 within a few days of listing it. It is a house I am familiar with since I lived in it for 10+ years so I know it inside & out. It is a great SFR with RV storage, 800 sq ft air conditioned shop, big easy to maintain yard. Which made it easy to pretty much have the pick of the litter when it came to applicants.

*The rent payment for house #1 was making the P&I payments on both #1 & #2 houses plus a little extra.

*The newest little bonus came about a month ago. I was able to refi house #2 at a point and a half lower rate AND the house had appreciated enough to get rid of PMI. This dropped the total payment including PMI roughly 20%.

*I've had a few little hiccups at house #1 over the last 2 years. Clogged kitchen sink (plumber called), water heater was leaking from the valve (just needed to be tightened down LOL), I had to replace a garage door spring and I had a leaking stand up shower that I ended up upgrading to a tub (full bath now instead of a 3/4) anyway but overall nothing too crazy. Should the proverbial poop hit the fan I still have the money I didn't spend on the down payment as a cushion.

*I would love to pull the trigger on house #3 as an upgrade for my family and then rent #2 but there just isn't enough inventory right now in my area. For instance there have been less than 10 listings matching my search criteria in the last 90 days. My current residence is very similar to the original only bigger, RV storage, shop, and of course a big easy to maintain yard so renting it should also be no problem either.


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Up until this thread I never thought I would ever invest in the stock market. I would like to thank all involved and especially Greg for the ever-so influential way of putting things into perspective. I not only have been researching stocks the last few months but have also gotten my rather stubborn on the subject wife to come on board as well. She would have laid over dead before investing in the stock market but she has read through most of this thread and is now asking me how much a week we should be investing.

I am starting to familiarize myself with the Yahoo & Google finance pages to find my comfort zone and follow basic trends. However, there is one small thing I've noticed that is different between these two sites and that is the Dividend. The Yield is always the same but the Dividend amount is always substantially higher on Yahoo's page. I am sure it is just some small difference in the way it is written but for this reason I have leaned towards Google instead (mainly because Greg has posted specific amounts and they have matched Google exactly). If anyone can explain the difference so I can understand it would be much appreciated.

-J