Want to provide feedback? I need some basic help

7 Replies

Hi guys. I’ve been a part of the BiggerPockets community (despite this being my first post) and have done some research for a while now. Never really had the funds to dip in and get started and soon will be able to. I just want to make sure I’m assessing the basics correctly and make sure I’m not overlooking anything. I want to get into SFH rentals and am also interested in becoming a real estate agent (we’ll save that part for later).

With that being said, here’s what I know on SFH rentals that I’m going after:

-$150k SFH sale price roughly @ ~3.5-4.5% interest is the goal. In my area this means approx $155-170k “price tag”.
-3% down would be around $4,500 down payment
-$14,000 savings for 12 months mtg pymt expense used as needed to get the ball rolling
-The properties I look at probably need $2000-$4000 in renovation expense
-Estimated insurance would be around $120/mo and taxes around $250/mo which is included in the monthly total I came up with: $1166 roughly.
-Based in DFW TX market

Any feedback on anything? Am I missing anything? My plan is to cash flow rental properties with SFH’s.

I am extremely open to feedback so please feel free to jump in. Thanks

I would say that your insurance cost estimate is a little high based on single family rentals because you are insuring only the house and not the stuff inside the house I usually estimate insurance at $500-$600 per year unless the property is in a high fire danger area.

Also unless you plan on living in the property you will likely not be able to put only 3.5% down you will be looking at closer to 20% down for a strictly investment property.

Thank you for your feedback sir! Now with 20% down as an investor - that’s only assuming the app is filled out a certain way or am I wrong? Is there a way to get around the 20%?

@Jonathan Newton ,

The only way to get around it is to make it your primary residence.     Have you ever thought about house hacking a multi-family?

Linda is correct that the only way to avoid the 20% down is to make it your primary residence, however on occasion you can find a lender that will allow you to purchase with 15% down but that is rare and your credit must be excellent.

These definitely sound like the next best routes. Thanks guys for your feedback! Guess on to the savings game again haha. I’m interested in looking at other real estate avenues so I’m doing some research on other low money down options. I don’t even want to mess with wholesaling based on the oversaturation/shady profiles it comes across as. Any suggestions on other methods, please let me know!

Oh and @Linda- house hacking won’t be an option unfortunately for our household.. definitely thought about it before though!

Originally posted by @Aaron Klatt :

I would say that your insurance cost estimate is a little high based on single family rentals because you are insuring only the house and not the stuff inside the house I usually estimate insurance at $500-$600 per year unless the property is in a high fire danger area.

 House insurance here is very expensive. The older the house the higher the insurance. You can insure a brand new house for much less than a 20 year old house around here. OP should speak with an insurance broker to harden the homeowners insurance number.

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