Jared at Austin
Loan officer in Austin and interested in money investment
網上看的一篇文章分享一下。股市新高，人人高興，但要時刻為將來可能的crash做準備。我的出租房沒有貸款，但我也祈禱我的租客能有工作繼續付房租。平時對他們好一些。more or less 你的現金流要靠他們來實現......
The Big Short (2015) is literally all about this and it's what led to the financial crisis in 2008. Actually a lot of people were doing this back before 2008 when the subprime mortgage crisis hits. The word "subprime" is used because it describes the creditworthiness of borrowers who made a basic salary, who would apply for a loan and get a house. Then they'd rent it out, go back to the bank, get another loan, rent out that house, etc. It set up a house of cards, of sorts.
The problem arises when one of the houses can't be paid by someone else. When the market took a turn in 2007, people lost their jobs and couldn't pay rent. This leaves Mr. Landlord, with his sub-par salary, to pay the mortgage on that house in addition to paying to keep a roof over his own head.
This might work for a bit, until something else happens. Say Mr. Landlord's hours get cut and he can't afford the 2nd house, or the one he's actually living in. In "the Big Short" book, there are stories of strippers in Vegas owning multiple houses and paying mortgages on all of them, until someone can't pay anymore and all of the houses get repossessed, with one house going to pay for the next until there are no more assets to collect from Mr. Landlord.
Because of that, nowadays, no-down-payment loans don't really exist anymore. You have to pay at least 3% down for an FHA loan. Second homes and investment properties require 20% down with almost no exceptions. For less than 20% down, you'll pay mortgage insurance on the loans, to protect the banks if you default. You'd have to pass this to your renters as well.
Overall, what you're saying could probably be done, but you'd have to invest at least 20% of the purchase price of all of the houses, and then hope nothing bad happens that could pull one of the cards from the tower.
