J Darrin Gross
I'd like to ask you, Brad Hansen, what is the biggest risk?
Brad Hansen
Yeah, that's a good question. You know, I think, you know, there's a couple of them. Number one, I mentioned a few of these number one, I think you have to be really careful. Trying to do too much too quickly, right? It's like anything, the more experience you get, the better you'll be at IT knowledge. So I always say, they walk before you run, right? And make sure that you're not, you know, if you're gonna buy an investment property, do it in an area that you know, do it, do it in such a way that you're going to minimize the risks, right? You know, that you have professionals help you, right? You know, the value of the home, you're not overpaying. It's going to cash flow, those kinds of things. So, you know, one of the risks is that you have a home that has a negative cash flow, right, let's say you overpay and rates are high right now, right? So your rates, your payments going to be relatively high, but let's say you have a payment, that's 3500. But you can only rent it for 3000. Well, now all sudden, you've got a $500 a month negative cash flow. So, you know, again, knowing what you're getting into and not just, you know, it can be as you said, it could be a little bit kind of glamorized a little bit, right. That's a lot of hard work. You know, are you going to are going to hire a property management company? Are you going to manage yourself? Are you going to hire a handyman to help take care of repairs, you know, those kinds of things? Because stuff goes out, right? Are you going to set aside money for maintenance? So there's a lot that goes into it, I would say, you know, that's a risk. But it can be mitigated by educating yourself, surrounding yourself with with professional so walk before you run is another one. The other risk potentially is home values might go down. Right. Now, while we don't necessarily think the environment similar to what happened in oh eight, where we saw 25 to 30% declines, because of the oversupply and the the lot of other things that were happening with the home financing wasn't great. We don't think that's the same environment we have, if you overpay, you could see values go down, but that I think that can be mitigated to a degree by what we talked about earlier. If you're going to buy it, don't expect it. It's going to give you the return on investment that you want to just the first year or two might take multiple years for that. So like anything, it is a risk. It's money that can be lost. But I think I mean, I honestly think the big Guess risk is that negative cash flow, maybe buying a property again, I always recommend that you get a really thorough inspection, you found a property that had that you didn't do an inspection. And you ended up having to put a new roof in or you had other issues, right. So like you, you know, again, I'm not insurance you there are things that insurance can protect you from, but insurance can't necessarily protect you from buying a home that is in disrepair and needs a lot of work. Right. So those are probably the biggest risks that I see. And there's ways to mitigate those and be prepared for them. But yeah, those are those are probably two of the biggest ones I've seen.