Effect of Student Loan Debt on Homeownership Rate

Multiple sources are suggesting that increasing student loan debt levels will have a significant impact on future housing prices because people will delay their home purchases (or put them off entirely). Although that seems like a reasonable assumption, I haven’t actually seen any hard data on it.

In a recent Vanguard research paper titled No bubble to burst: U.S. student debt is not housing [pdf], they took data from the Federal Reserve’s 2010 Survey of Consumer Finances and U.S. Census Bureau and found that:

Although financing a bachelor’s degree with student debt decreases the likelihood of a typical 30-year-old college graduate purchasing a home by –1.7%, obtaining that degree also increases the likelihood of purchasing a home by 10.8%, relative to not attending college at all.

vanguard_home

In the end, the conclusion seems to still be consistent with other findings. Getting that college degree is still “worth it” financially, even with the accompanying debt, at least on average. Your income is higher, you’re less likely to be unemployed, and you are more likely to own a home.

vanguard_home2

I suppose the primary thing to avoid is to not be above average on the debt. If you have to take on $120,000+ of debt just to get a 4-year degree, you’re probably going to the wrong school anyway. If the school really wanted you, they’d offer you a better aid package with grants and/or tuition waivers.

Early Retirement Lesson #3: Home-Buying and Mortgage Advice

housemoneyHere’s another installment of what I would tell my kids about pursuing financial freedom (if they weren’t still in diapers). Previous topics have included the importance of savings rate and whether to focus on earning more or spending less. This time, I wanted to talk about buying a home and mortgages.

Should you buy or rent? Now, there are many buy vs. rent calculators. Here is the best one in my opinion. But as they say garbage in, garbage out, so be careful. Your answer will strongly depend on unpredictable things like future investment performance and/or home price appreciation. In general, the longer you plan on staying in a geographical location (say at least 5-7 years), the better it is to buy your own place. But if you are the nomadic type and want to travel the world, then renting can work out to be much better. In my experience, buying a house often ends up a lifestyle-based decision and not just about the numbers.

If you decide to buy, my opinion is that you should adjust your mortgage size and term to coincide with the date of retirement. I define retirement as when your expenses are exceeded by your non-work income like pensions, Social Security, annuity payments, stock dividends, rental income, or other investment income. Example scenarios:

  • If you love your job and plan on working for the next 30+ years, then go ahead and get a 30 year mortgage. Maybe you have a job that you could work part-time or isn’t very stressful. In this case you have lots of human capital and a long stream of future work income. Take on the 4% interest rate fixed for 30 years, and over time your salary will rise with inflation while your payment stays the same. Be sure to buy a house that you can afford while still investing for retirement. If anything, you could do a DIY biweekly payment plan and pay off that 30-year mortgage in under 24 years.
  • If you have the early retirement bug and want to retire in 15 years, then you should find a home that you can afford with a 15-year mortgage. The interest rate will be lower and as long as you can swing the payments in the beginning, you’ll quickly get used to it. The hard part is to find an affordable home with those higher monthly payments. The hardest part is to be satisfied with it as you’ll have the option and expectation from others to spend more. This is why I think the 15-year mortgage is a powerful tool for aspiring early retirees. It forces you to commit to a long-term lifestyle that fits your goals. Buy a house at age 25, and you’ll be done by 40.
  • Let’s say you receive a monetary windfall (inheritance, huge raise, IPO) and all of a sudden an early retirement is on the table. I wouldn’t necessarily pay off the mortgage completely if you aren’t ready to retire yet. You’ll want to balance the opportunity to invest in potentially higher-returning investments (stock mutual funds, dividend-paying stocks, other real estate) with pursuing the benefits of having a fully-owned house (less stress, less leverage, lower required monthly expenses). My solution would be to pay enough of the mortgage down such that with your usual monthly payments it advances your mortgage payoff date to match your retirement date. If you won the lottery and that date is tomorrow, then yes pay it all off!

One of my reasons for matching mortgage payoff with retirement date is psychological. When you are working, your paycheck is the same every month. This matches well with a fixed mortgage payment. But investment income is often variable. If the tenant in your investment property decides to squat and you have to spend months going through eviction proceedings, your rental income may drop to zero for a while. Many experts now recommend a dynamic withdrawal strategy from your investment portfolio, which would also result in a variable income. But mortgages are like an alligator. You must feed it; if you don’t then it eats you. Other expenses like travel and dining out, those can be adjusted. So I don’t like the idea of having a mortgage in retirement, especially if it is a large percentage of your overall expenses.

However, paying off the mortgage too early can also cause regret if the stock market is rising while you’re piling money into a 4% mortgage. If you are still in the accumulation phase, at times like now you’ll be reminded that you could be investing your paycheck in the market generating higher returns. But if you’re retired, that meant your nest egg was already big enough. If the market goes up, your next egg goes up and you are happier. If the market drops, hey, you already have a paid-off house. So that is why I don’t recommend paying off the mortgage too early, either.

Finally, early retirement with a paid-off house is great because lower expenses means smaller withdrawals from your portfolio, which also means a lower overall tax rate. In fact, with a mix of Traditional and Roth IRAs, we’ve seen that a couple could withdraw over $50,000 a year and still pay zero taxes on retirement. A lower income can also help you qualify for things like health insurance subsidies.

Short version to my kids: If you want to retire early and don’t move around much, buy a modest home where you can afford a 15-year mortgage payment and save at least 25% of your income. If your lifestyle entails lots of moving around, rent and save 50% of your income.

(Related: Pay Off Mortgage Early vs. Save More For Retirement? Digging Deep Into The Details)

Big List of Free Consumer Reports (2/2): See Your Confidential Housing, Insurance, & Employment Data

magHere is the second and final part of my big list of free consumer reports from over 50 different reporting agencies. The first part included your credit, banking, and subprime lending-related information. This part includes your housing, insurance, and employment history. Request your free copy of what these databases have stored about you and are telling prospective landlords, insurers, or employers.

Again, you may not need to check all of these, and many may not even have a file on you anyway. But for example if you are a renter then you’d want to make sure your rental history is clean and correct, because if I was a landlord I’d avoid anyone with previous blemishes on their record.

Rental History

Realpage Consumer Report. Provides tenant screening through their LeasingDesk product, including “the industry’s largest rental payment history database.”

CoreLogic SafeRent. SafeRent provides both tenant and employment screening data, including information regarding landlord tenant and criminal public court records. One free report every 12 months.

Experian RentBureau Rental History Report. “Every 24 hours, Experian RentBureau receives updated rental payment history data from property owners/managers, electronic rent payment services and collection companies and makes that information available immediately to the multifamily industry through our resident screening partners.”

First Advantage Resident History Report. Tenant and employment background checks. One free report every 12 months.

Contemporary Information Corp. CIC provides background checks on prospective tenants and/or employees and contractors for landlords and management companies. Keep records of any rental evictions.

Tenant Data. Provides tenant history reports, including any reported damages, unpaid balances, evictions, lease violations, noise complaints, or unauthorized pets.

Auto and Property Insurance

C.L.U.E. Personal Property Report. A division of LexisNexis, CLUE stands for Comprehensive Loss Underwriting Exchange, which collects information that is used to calculate your insurance premiums. This report provides a seven year history of losses associated with an individual and his/her personal property. Includes date of loss, loss type, and amount paid along with general information such as policy number, claim number and insurance company name. This also means you can find out about previous claims on the house you are currently renting or recently bought, even if they weren’t made by you.

C.L.U.E. Auto Report. This report provides a seven year history of automobile insurance losses associated with an individual. Includes date of loss, loss type, and amount paid along with general information such as policy number, claim number and insurance company name.

Verisk Analytics aka ISO aka A-PLUS Loss History Reports. ISO stands for Insurance Services Office, A-PLUS stands for Automated Property Loss Underwriting System. Auto and property loss claim history.

Insurance Information Exchange. Provide reports including your motor vehicle records and driver history, including any traffic violations or related criminal history. May require proof of adverse action to obtain free report.

Utilities

National Consumer Telecom and Utilities Exchange. NCTUE is a “membership of companies that provide services (telecommunication, pay TV, and utilities) [...] to aid in risk mitigation.” Basically they track when people don’t pay their phone, cable, or utility bills. One free report every 12 months.

Medical History

MIB (previously known as Medical Information Bureau). Run by 470 insurance companies with a “primary mission of detecting and deterring fraud that may occur in the course of obtaining life, health, disability income, critical illness, and long-term care insurance.” They record information of “underwriting significance” like medical conditions or hazardous activities. If you have not applied for individually underwritten life, health, or disability income insurance during the preceding seven year period, then you probably don’t have a record.

Milliman IntelliScript. Tracks your prescription drug purchase history. “Milliman IntelliScript will have prescription information about you only if you authorized the release of your medical records to an insurance company and that company requested that we gather a report on you.”

MedPoint Health Report. Tracks your prescription drug purchase history. Now called Optum, formerly Ingenix.

Employment History

The following companies all offer background screening services for employers. Most will not have any information about you unless you authorized a potential employer to run a background check on you (probably during the application process). Some will not provide you information unless there was adverse action. Otherwise, you can get one free copy every 12 months.

The Work Number. (division of Equifax) They also keep historical income records.

Accurate Background, Inc.

American Databank, LLC.

EmployeeScreenIQ.

General Information Services.

HireRight.

Info Cubic.

IntelliCorp.

Pre-employ.

Professional Screening & Information, Inc.

SterlingBackcheck (formerly Sterling Infosystems)

Trak-1 Technology.

Verifications, Inc.

Reminder: Also see Part 1: Big List of Free Consumer Reports with Your Credit, Banking, and Payday Lending Data.

Sources: ConsumerFinance.gov, FTC.gov, AnnualMedicalReport.com, Wikipedia

Big List of Free Consumer Reports (1/2): See Your Confidential Credit, Banking, and Payday Lending Data

magThere are many companies out there that make money by collecting and selling data – your personal data. In the past, it was often difficult if not impossible to see what they were telling prospective lenders, landlords, even employers about you. Under the FCRA and/or FACT Acts, many consumer reporting agencies (CRAs) are now legally required to send you a free copy of your report every 12 months, as well as provide a way to dispute incorrect information. There are more CRAs every time I try to compile these lists, such that this time I split it into two parts:

Some have an online request form, but many require snail mail with proof of identity. You may not want to bother checking all of them (for example if you rarely write checks or use payday loans), but if you’ve experienced any sort of rejection or adverse reaction in these areas the cause might be found inside one of these databases. Keep in mind that you may not have a file with all of these places.

Credit-Related

Experian, Equifax, and TransUnion. The three major credit bureaus track your credit accounts, payment history, and other related information like bankrupts and liens. Free copy of each once every 12 months.

CoreLogic Credco. One of the largest credit-related CRAs and often used by mortgage lenders, your CoreLogic Credco Consumer File can contain: previous homeownership and mortgage info, rental payment history, any reported delinquencies, and other debt obligations like child support. Free copy once every 12 months.

LexisNexis. One of the largest personal information databases that includes public records, real estate transaction and ownership data, lien, judgment, and bankruptcy records, professional license information, and historical addresses on file. Free copy, must mail in form.

Innovis. A supplementary credit report and identity verification provider. Free copy once every 12 months.

IDA, Inc. Per their site, they are a “credit reporting agency that produces credit reports and scores from our repository of consumer information contributed by a wide array of companies including leading financial services organizations, wireless providers, utilities, retailers, auto lenders and many others.” Free copy, must mail in form.

Microbilt and subsidiary Payment Reporting Builds Credit (PRBC). Microbilt is a credit reporting agency, per their site a “leading provider of alternative credit data to businesses that want to offer credit and other financial services to the approximately 110 million underserved and underbanked consumers in the United States.” Free copy once every 12 months.

L2C, Inc. A credit reporting agency, appears focused on the underbanked or unbanked population. Limited further details.

Banking-Related

Chexsystems. A consumer information database used by an estimated 80-90% of all banks to help determine the risk of opening new accounts. Think of it as the banks’ version of a credit bureau. If a person commits check fraud or overdraws their account, it will be listed here. In addition, the simple act of opening or closing a bank account may be recorded in their database. Having a negative ChexSystems record can leave you blacklisted from opening bank accounts at most major banks. Free copy once every 12 months. Must order by phone, mail, or fax.

TeleCheck. Per their site, they provide “industry-leading check acceptance, check processing and risk analytics services to merchants and financial institutions.” One of the major companies that protect businesses and banks from bad checks. Must order by phone or mail.

Certegy Check Services. Per their site, a “check risk management company that provides verification, guarantee and risk analytics to thousands of businesses that choose to accept checks as a form of payment for goods or services.” Clients include check-cashing stores and casinos. Free copy once every 12 months. Must order by phone or mail.

Early Warning Services. A collaboration between a group of big banks including Bank of America, BB&T, Capital One, JPMorgan Chase and Wells Fargo. Provides fraud prevention and risk management in relation to bank accounts and payment transactions. Must order by phone.

Subprime-Related (Payday Lending)

The following companies focus on subprime customers with clients including payday lenders, title loan lenders, rent-to-own stores, and subprime auto loan providers.

Teletrack (affiliated with CoreLogic).

FactorTrust. Free copy once every 12 months.

Clarity Services, Inc. Must mail or fax form.

DataX Ltd. Must mail form.

Reminder: Also see Part 2: Big List of Free Consumer Reports with Your Confidential Housing, Insurance, & Employment Data.

This should serve as a mid-year notice, but I will refresh this post as a reminder around January 1st (that’s when I like to pull all my reports).

Sources: ConsumerFinance.gov, FTC.gov, Wikipedia

Why Non-Traded REITs Are a Horrible Investment

housemoneyJust as important as finding a good investment is knowing what investments to avoid at all costs. If you simply manage to avoid putting any money into financial sinkholes, you’ll come out ahead. I’ve already mentioned the common mistake of cashing out your 401(k) when moving jobs.

Joshua Brown of The Reformed Broker has some great insights into the sales-driven world of products peddled to us retail investors. He talks about non-traded REITs (real estate investment trusts) as opposed to publicly-traded REITS that you can buy via a low-cost, diversified fund like the Vanguard REIT Index Fund (VNQ or VGSIX). Non-traded REITs have been increasingly popular in the current low interest environment as they are structured to look like they provide a solid income stream.

In this recent post, he shares a hilarious fictional conversation that would happen if the broker was abnormally honest about the fees involved. Read the whole thing, but here’s a snippet:

With your portfolio size and risk tolerance I would recommend a $100,000 investment. Given that amount let’s first go over the fees. If you invest $100,000 I will be paid a commission of $7,000. My firm is going to get $1,500 – $2,000 in revenue share. My wholesaler, the salesman that works for the investment’s sponsor company, will get $1,000. He is a great guy, buys me dinner all of the time and takes me golfing. The sponsor company is going to get around $3,000 to pay for some of the costs they incurred in setting up the investment. So all in on Day 1 there will be around $87,000 left over to actually invest. I bet you are getting excited.

You hand over $100,000, and after everyone has gotten their cut, there is only $87,000 actually left over to invest in anything. It doesn’t matter what property they buy, the odds are completely stacked against you already. Studies have shown that publicly-traded REITs have higher historical returns than non-traded REITs. On top of that, non-traded REITs have poor liquidity and you may be locked in for 5 years or more. Despite all this, over $20 billion of non-traded REITs were sold in 2013.

Here’s a Reuters article by James Saft that goes into more detail about the many disadvantages of non-traded REITs. Amongst the more amusing excerpts:

When a financial advisor tried to sell my sister a fee heavy non-traded REIT last year, pitching it as an alternative to fixed income, I told her she ought to fire him. [...]

The Financial Industry Regulatory Authority, an industry funded oversight body, went so far as to issue an “investor alert” about non-traded REITs in May of last year, warning about inaccurate and mis-leading marketing of the vehicles as well as other risks. Just to give a flavor of the company in which non-traded REITs are traveling, the most recent FINRA investor alert was about marijuana stock scams.

Bottom line: Avoid non-traded REITs. If you want commercial real estate exposure, buy a low-cost fund like VNQ or VGSIX.

Best Buy vs. Rent Calculator Ever? Interactive & Fully Customizable

nytrent

There are a plethora of buy vs. rent calculators out there, but virtually all of them make at least some fixed assumptions. They might assume that you could invest the difference between renting and buying in the stock market at 8% return while you disagree, or they might assume that your property tax rate is 3% when it is only 0.5%.

The New York Times already had a pretty good one, but their new Buy vs. Rent calculator is the most interactive, user-friendly, fully customizable version that I have ever seen. Here are the factors that it lets you adjust:

  • Home details (price, length of ownership)
  • Mortgage details (rate, downpayment size, length)
  • Future growth rates (Home price appreciation rate, rent appreciation rate, overall inflation rate, investment return rate)
  • Taxes (Property tax rate, your marginal income tax rate)
  • Transaction costs (closing costs on purchase, commission paid on selling)
  • Costs of homeownership (maintenance, HOA fees, utilities covered by landlord, homeowner’s insurance)
  • Costs of renting (security deposit, broker’s fee, renter’s insurance)

If I could find a flaw with the calculator, it would be that you now have the power to tweak your assumptions to reach your desired answer of renting or buying. “Well, if I adjust investment return a bit higher, and I reduce the commission to sell with a discount real estate agent, and stay in there a couple extra years… we should buy!”

Of course, an accompanying NYT article points out that buying a home isn’t all about the numbers.

Mortgage Qualification and Credit Scores

Sometimes I wonder what all the fuss about credit scores is about. But mortgage underwriting is one area where it is very important, mostly due to the unwillingness or inability of lenders to look beyond a subprime credit score. Many brokers that intend to offload their loans to Fannie Mae or Freddie Mac use default screening software where credit scores are a critical factor in automated acceptance. They don’t want to see any blemishes – that means adequate down payment size, clearly documented income, and solid credit scores.

How good does your credit need to be? The chart below compares the distribution of credit scores for purchase loans from 2001 (before the housing bubble got going) to today (source).

mtgcredit1

Here is a similar chart that shows the overall credit trends over the last decade (source):

mtgcredit2

In 2001, around 13% of loans went to borrowers with credit scores below 620. By 2013, that number had dropped like a rock to under 0.2%. That doesn’t even warrant a pixel on the bar chart. Hardly anyone with a credit score under 620 today qualifies for a conventional mortgage. Somewhat better news is the share of borrowers with scores of 640-779 have held steady. So working to get into that range may be worth the effort if you really want to buy a house.

Looking forward, as refinances have started to drop significantly, lenders may have to loosen their standards in order to keep their profits up (source).

mtgcredit3

Government regulators may also be adding their own pressure to improve loan access if the housing market starts to struggle again.

Do We Regret Paying Off Our Mortgage? One Year Update

It has been a year since we paid off our mortgage early. I already discussed our reasons for doing so in that post, so I won’t repeat them here. I also wrote a really long post on every single facet I could think of in the Pay Off Mortgage Early vs. Save More For Retirement debate. So I won’t go into that here either.

But how do we feel a year later? Did we regret it? Let’s take a look at what happened from March 2013 to March 2014.

Mortgage rates bounced around a bit but in general look to be about half a percentage point across the board. (Source: HSH.com) I probably couldn’t get the same mortgage rate I had before anymore, but it would still be a pretty low rate historically.

hsh_march2013

Investment returns over the last year were quite robust. If I model my portfolio roughly with the Vanguard LifeStrategy Growth Fund (VASGX) which is a low-cost index fund split roughly into 80% broadly diversified stocks and 20% broadly diversified bonds, my trailing 1-year return would be 15%.

vgasx_march2013

Bond interest rates in particular went up overall. The 10-year Treasury Bond rate went from 1.8% to nearly 2.8% over the last 12 months. (Source: FRED)

fred_march2013

(Note I don’t talk about the value of my home. This is because paying extra towards your mortgage early is not an additional investment in your house. You already own the house so you are already exposed to any change in home value regardless of your mortgage size. The mortgage is just another debt with an interest rate.)

So interest rates went up and we could have earned more money investing the money in my portfolio rather than pay down my 3% mortgage. Well, if I had a time machine maybe that would matter. But in reality it has been great. The lack of a mortgage reduced our monthly expenses significantly. We have been able to work less and got to spend an entire year watching our colicky baby grow into walking, talking, little person (meaning we are still more tired than ever before, ha) while still maintaining good cashflow and thus minimal financial stress. I’m not saying this applies to anyone else, but paying off our mortgage early has worked out well for us.

Mortgage Interest Tax Deduction Doesn’t Help Homeownership?

The mortgage interest tax deduction primarily helps the wealthy buy bigger houses rather than increase homeownership rates, according to a new study quoted by this WSJ article. The study found that such tax benefits have help increase the size of house by as much as 18% in affluent areas. Here is a graphic of the average annual tax savings from 10 major metro areas, broken down into households earning over and under $100,000 a year.

wsjbigben

My non-political thoughts:

Don’t overestimate the benefit of the mortgage tax deduction. It is easy to simply take your marginal tax bracket (say, 28%) and say that you’re saving 28% on all your mortgage interest. But mortgage interest is only tax-deductible if you itemize, which encompasses just 30-40% of Americans. Even then, you should consider the incremental savings above the standard deduction.

Everyone can take the standard deduction, which in 2014 is $12,400 for married filing joints and $6,200 for single filers. Let’s say your mortgage is for $250,000 and the interest rate is 4%. That’s $10,000 in interest annually. So far, the married folks have no tax benefit at all! You would need a lot of other deductions like state income tax, property tax, and charitable contributions to push you over the hump. For example if you have $7,400 in other deductions, then only half of your mortgage interest ($5,000 out of $10,000) is actually saving you anything extra in taxes.

Accordingly, the study quoted above also found that homeowners with incomes above $100,000 were between three and four times as likely to claim the tax benefit as those earning less than $100,000.

Even if you do itemize and have a high income (~$254k for single, ~$305k for married filing joint), look up the new Pease Limitation which reduces the value of various deductions including mortgage interest, state/local taxes, and charitable contributions.

Be prepared that the mortgage interest tax deduction may go away. I’m not going to talk about whether or not it should go away, but realistically there is a chance that it will. If it does disappear, it think it would be done gradually to prevent a shock to housing prices. However, I wouldn’t buy a house where I am depending on the tax deduction to maintain affordability. Tax laws change.

My prediction is that the mortgage interest tax deduction is still too popular to be completely nuked. Most likely there will be more legislation that nibbles around the edges like the mentioned Pease limitation that does a income phase-out or the total loan amount allowed will be reduced from the current $1,000,000 cap.

Case-Shiller Home Price Index Update: Getting Frothy Again?

Real estate prices have rebounded in many areas since the financial crisis, so much that some people are wary of another Housing Bubble. The S&P/Case-Shiller 20-City Composite Home Price Index measures the value of residential real estate in 20 metropolitan areas of the U.S. The latest update (PDF) shows that average home prices are back to their mid-2004 levels:

Measured from their June/July 2006 peaks, the peak-to-current decline for both Composites is approximately 20%. The recovery from the March 2012 lows is 22.9% and 23.6% for the 10-City and 20-City Composites.

While the recent rise does look sharp in nominal terms, the Bonddad blog took the 20-city index values and divided them by both average hourly income (blue) and by consumer inflation (red) over the same time period:

This latter chart would suggest that at least nationally there really is no sharp spike in housing prices. In our area, I felt like things were getting heated earlier in the year but then things subsided a bit with all the Fed taper talk and rising mortgage rates. I no longer have a horse in this game as I’ve paid off our mortgage with no desire to upgrade, but I do wonder how home prices will react if mortgage rates keep rising.

4 Different Rules of Thumb For How Much House You Can Afford

Updated for 2013. By definition, a “rule of thumb” is meant to be a greatly simplified estimate for a complicated matter. Mortgage lenders use income size, income stability, credit score, downpayment size, and other factors before approving a loan. But the most common way to express affordability is as a multiple of your household or individual annual income. CNN Money says 2.5 times:

The rule of thumb here is to aim for a home that costs about two-and-a-half times your gross annual salary.

The now-defunct Washington Mutual Bank suggested up to 4-5 times:

As a broad generalization, most people can afford to purchase a house worth about three times their total (gross) annual income, assuming a 20% down payment and a moderate amount of other long-term debts, such as car or student loan payments. With no other debts, you can probably afford a house worth up to four or even five times your annual income.

Running Your Own Numbers
I decided to run some numbers for myself using values I think are reasonable along with current interest rates. The Federal Housing Administration provides the following guidelines for the loans that they accept:

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Realty Mogul Review: Fractional Investment Property Ownership, Hard Money Lending

rmlogoRealty Mogul is a new “crowdfunding” start-up that lets you invest in residential investment property for as little as $5,000. You either take a partial ownership position in a property, or you become a lender to (experienced) house flippers. The new thing here is that you can do it completely online with a few mouse clicks (no mortgage brokers, real estate agents, or tenants) and again that low minimum $5,000 investment. (Thanks to reader Johnson for the tip.)

Taking an equity ownership position means that you own a little slice of a single-family home or multi-unit complex while a professional does the buying, fixing up, renting out, and eventual selling. Realty Mogul only has done one deal like this so far (fully funded) and the intended timeframe is 5-7 years. You earn rent while the house hopefully appreciates in value, and cash out when the house sells.

[Read more...]