Gilbert Real Estate Investing & Real Estate Financial Planning™ Podcast

James Orr

Learn all about investing in real estate in Gilbert, Arizona with a combination of real estate financial planning and modeling with numbers specific to Gilbert plus syndicated, more generalized recordings of live and pre-recorded real estate investing classes (not all specific to Gilbert). read less
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Episodes

Is It Better to Pay Off Rentals Early With Extra Cash Flow or Traditional Nomad™?
Feb 16 2024
Is It Better to Pay Off Rentals Early With Extra Cash Flow or Traditional Nomad™?
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 Gilbert specific, detailed analysis of a variety of strategies here: https://RealEstateFinancialPlanner.com/model/AZ/Gilbert/ Download a copy of the newest version of The World's Greatest Real Estate Deal Analysis Spreadsheet™ by going to:https://RealEstateFinancialPlanner.com/spreadsheet
Warning - The Risk of Down Payment Size When Investing in Real Estate
Feb 2 2024
Warning - The Risk of Down Payment Size When Investing in Real Estate
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: A George S Patton quote about fear, risks and making decisions.The Risk Matrix and The Risk Matrix for property appreciation (and property declines)An introduction to Rent Resiliency™ and Price Resiliency™Case-Shiller Home Price Index - Home Price Appreciation Over Previous 12 MonthsA Case-Shiller chart showing mortgage interest rates, population, real building costs and home prices over the last 133 yearsYear-Over-Year Home Price Appreciation over the last 133 years and the frequency of price declines (and price increases)What are you risking?Plus much more... Download a copy of the newest version of The World's Greatest Real Estate Deal Analysis Spreadsheet™ by going to:https://RealEstateFinancialPlanner.com/spreadsheet
What Affects Your PMI Rate
Jan 19 2024
What Affects Your PMI Rate
What Affects Your PMI Rate Lenders prefer that you put at least 20% down, but if you push hard enough, many will allow you to put less than 20% down if you're willing to purchase insurance to protect them in case you default. This insurance is called Private Mortgage Insurance. The cost of this insurance depends on several factors. Some are primary factors and have a significant impact on the cost of the insurance policy. Other factors are secondary and affect the premium, but only to a smaller extent. In this mini-class, James will go over the things that affect your private mortgage insurance rate if you decide to put less than 20% down when buying properties. Check out the video from this class here: What Affects Your PMI Rate - Video In this class, James discusses: What is Private Mortgage Insurance (PMI) and why does it exist?Factors that affect your PMI rateLoan-To-Value of the property (often just the first lien)Coverage amount for the lenderYour credit scoreAmortization term of the loan itself - shorter terms have lower PMIFixed and variable payment amountsTime you’ve been paying the rateLender (separate pricing sheet for Credit Unions)Hard minimums for PMI ratesCash-out refinanceSecond homeEmployee relocation loansManufactured HomesInvestment Property3-4 unitsLender-Paid Monthly PremiumDeclining RenewalsAnnual PremiumRefundable Monthly PremiumHigh Debt-To-Income Ratio (> 45% DTI)More than 1 borrower on the loan (reduces PMI rate)Plus much more... Download a copy of the newest version of The World's Greatest Real Estate Deal Analysis Spreadsheet™ by going to:https://RealEstateFinancialPlanner.com/spreadsheet
What is PMI And How to Avoid It
Dec 15 2023
What is PMI And How to Avoid It
What is PMI And How to Avoid It You want to work with a lender so that you don't need to purchase a property with all cash. The lender is willing to lend you money, charging you interest to make a profit, and ensuring there is a safety buffer of equity in case you default and they need to foreclose to recover their funds. Your goal is to minimize the amount you need to invest in the deal to maximize your return on investment, but the lender requires a minimum down payment of 20% to feel secure in loaning you the money in case you default and they need to foreclose to recover the property and their money. You insist on putting down less than 20%. Reluctantly, they agree to let you put less than 20% down, but only if you purchase third-party insurance to protect them in case of default. You agree. The third-party insurance company is offering private mortgage insurance (PMI), which is insurance you pay to protect the lender in case you default because you put down less than 20%. In this mini-class, we will look at PMI, what it is, and how you can avoid it as a real estate investor. Check out the video from this class here: What is PMI And How to Avoid It - Video In this class, James discusses: What is Private Mortgage Insurance (PMI) and why does it exist?What is PMI called for FHA loans?How to avoid paying PMI?Putting at least 20% down to avoid paying PMIPaying down on your loan to get rid of PMIOpting to take a higher mortgage interest rate instead of PMIGet a loan that doesn't have PMI at allUtilize the creative financing strategies that don't have PMIPlus much more... Download a copy of the newest version of The World's Greatest Real Estate Deal Analysis Spreadsheet™ by going to:https://RealEstateFinancialPlanner.com/spreadsheet
Is It Better to Put 25% Down and Buy 9 Rental Properties After Buying an Owner-Occupant or Nomad™ with 5% Down?
Dec 8 2023
Is It Better to Put 25% Down and Buy 9 Rental Properties After Buying an Owner-Occupant or Nomad™ with 5% Down?
Should you use the Nomad™ strategy to acquire properties with a minimal 5% down payment as quickly as possible? Or is it better to be a little more patient and save up for full 25% down payments and buy rentals without moving into each? By saving up for a 25% down payment, the properties will cash flow better. That may allow you to save up faster for subsequent properties and maybe... just maybe... ultimately be able to buy properties faster. If you're buying properties with a 5% down payment, there's a chance they could have negative cash flow—or what we often refer to as deferred down payment. Deferred down payments mean that it is slower to save up for the next property purchase. This could ultimately slow down how fast you can acquire properties. Of these two strategies—25% down payment rentals or 5% down Nomad™—which will lead to the fastest path to financial independence? Which leads to the highest net worth? Which has the least amount of risk? Check out the video and interactive charts from this class here: https://RealEstateFinancialPlanner.com/model/nomad-versus-25-down-payment/ Or, see Gilbert specific, detailed analysis of a variety of strategies here: https://RealEstateFinancialPlanner.com/model/AZ/Gilbert/ Download a copy of the newest version of The World's Greatest Real Estate Deal Analysis Spreadsheet™ by going to:https://RealEstateFinancialPlanner.com/spreadsheet
Is It Better to Sell Properties to Invest in Stocks If That Means Financial Independece When Nomading™?
Nov 10 2023
Is It Better to Sell Properties to Invest in Stocks If That Means Financial Independece When Nomading™?
Sometimes buying rental properties is merely a means to an end: financial independence. Some folks don't want to hold onto their rental properties, manage them, or deal with the business of owning them when they achieve financial independence. Instead, they may prefer to have their money more passively invested in stocks. Can a real estate investor buy properties and hold onto them until they can sell off all the rentals, pay all their expenses of the sale—including closing costs, capital gains taxes, depreciation recapture taxes, and real estate commissions—then take the proceeds and invest in the stock market utilizing a safe withdrawal rate? And is that a faster approach to achieving financial independence than trying to get your properties to the point where they're cash flowing enough to support you without working? In this mini-class, James will look at Nomading™ versus Nomading™ but being willing to sell off all your rental properties if doing so can make you financially independent and allow you to invest in stocks using a safe withdrawal rate. Check out the video and interactive charts from this class here: https://RealEstateFinancialPlanner.com/model/nomad-selling-all-rentals-fi-swr/ Or, see Gilbert specific, detailed analysis of a variety of strategies here: https://RealEstateFinancialPlanner.com/model/AZ/Gilbert/ Download a copy of the newest version of The World's Greatest Real Estate Deal Analysis Spreadsheet™ by going to:https://RealEstateFinancialPlanner.com/spreadsheet
Ways to Speed Up Achieving Financial Independence
Oct 30 2023
Ways to Speed Up Achieving Financial Independence
How can you speed up your journey to financial independence (FI)? In this special class, James will go over a brand-new spreadsheet and walk you through all the different ways to speed up your achievement of financial independence. James covers the following in this class: What is financial independence?How is financial independence defined mathematically? How do you know if you're financially independent?A brief discussion of pensions, annuities, and social security and why you may prefer to focus elsewhereAn introduction to the new Financial Independence Asset Allocation and Cash Flows Engine™ spreadsheetSpeeding up FI via job incomeSpeeding up FI via propertiesSpeeding up FI via business profitsAn introduction to Safe Withdrawal RatesSpeeding up FI via invested assets (and a SWR)Speeding up FI with annuitiesBesides earning more money and reducing expenses, what are the strategies for achieving FI faster?Sources of money to invest... and allocating that money to speed up FIInvesting or reinvesting in what to speed up FI?The three primary groups of strategies to improve speed to FI: increase savings, increase returns, and reallocate assets.All the strategies for increasing savingsAll the strategies for increasing returnsA discussion of Return on Equity and why it matters when you're trying to speed up your achievement of financial independenceAll the strategies based on reallocating assetsRisk versus speed - a tricky tradeAnd much more... Download a copy of the newest version of The World's Greatest Real Estate Deal Analysis Spreadsheet™ by going to:https://RealEstateFinancialPlanner.com/spreadsheet