Rental Property Investor · Overland Park, KS · Member since 2015 · 492 posts · 234 votes
I once started out on this site asking tons of questions. If you’re starting out feel free to ask me questions and I will answer the best I can. Below is my experience for context.
Charlotte, NC · Member since 2018 · 1 post · 1 vote
5y
@William S.
Looking to find my first rental property in the Charlotte, NC area. There’s a ton of competition here and was wondering if you could share some tips on things I could be doing to find that diamond in the rough?
Rental Property Investor · Brentwood, CA · Member since 2021 · 22 posts · 12 votes
5y
@William S.
Hey so I plan on doing some flips initially because I got a partner to put up a good portion of cash but want to eventually want to keep some for brrrr. I want to create an llc but not until after I establish some good capital and portfolio numbers, my question is do you buy properties in your own name and in the llc especially if you get lenders etc so that your profits stay with you and the other profits through the llc get divided?
Austin, TX · Member since 2021 · 19 posts · 7 votes
5y
@Bruce P. Bellott Hijacking this thread to say I'm in a similar place with not having 2 years of W2 income yet, but I just got pre-approved for my upcoming purchase. Find a lender that counts your university years towards loan applicability. Most lenders will do this, so it shouldn't be difficult just a matter of being up front with them Especially if you had income during those years, they don't look down or raise your rates for having been in school.
Rental Property Investor · Member since 2020 · 1 post · 2 votes
5y
@William S.
Hey William!
I am a newbie and am struggling how I can start in rentals with having no money. Brandon Turner talks about partners in regard to flips but doesn’t discuss the partnerships for rentals.... at least not that I’ve heard.
Is there a good strategy for partnerships in rentals? If so, what specifically? If not, what do
@William S. I am selling a house and am able to use the equity to invest in real estate. It should be a decent amount. What advice do you give? What should I be looking for? How do I find someone to mentor or ask questions (that I can trust)? I have been reading books and listening to podcasts. It all seems easy but hard at the same time. Haha
Firestone, CO · Member since 2021 · 14 posts · 5 votes
5y
@William S. As far as out of state rentals goes, I live in Southern California which I feel is highly competitive and for the most part overpriced. I’ve done my share of driving lately searching for properties and have made a list of potential property owners to contact now, but the thought of searching for properties out of state still lingers in my head. Is this an avenue worth seeking for a first time investment purchase? And if so, what are some things to keep in mind?
You are always going to have competition. There is no "diamond in the rough." I would explore areas on your city that are not inflated with rental homes. My best properties were in mainly home owner neighborhoods.
I've always bought in my own name with an $1 million umbrella insurance policy. I never had partners as well. Your mortgage rates are better this way too. I never acquired so many homes to need an llc (commercial loan).
What you should be looking for is only something you can answer. What do you want out of real estate? What is your risk tolerance? What type of personality do you have? I would start with self reflection first, before crunching the numbers. It's like finding a job or career, does the strategy fit you personally. If you're seeking a mentor, they will find you. As long as you stay active on BP, go to real estate meetups, etc.
A duplex hack is when you buy the property as your primary residence and rent out the other unit. In my opinion this was my best investment. You are on-site, if you need to renovate you are renovating your own home and a rental at the same time. You can also get a 3.5% FHA loan because it is a primary residence.
I personally do not recommend an out of state investment, especially for your first property. Because you are a CA you will end up over paying for a home out of state because you have "CA money." You're operating costs will be high, and you are so reliant on others. I know CA is very difficult, however there has to be a certain strategy that works. Can you house hack in any way?
Rental Property Investor · Overland Park, KS · Member since 2015 · 492 posts · 234 votes
5y
For everyone so far these are my top tips as I will be getting busy soon.
1. Know who you are. How do you handle stress? What are your strengths? Who would you like to work with? How much time do you have? What is your current work / life balance like? These are the biggest factors that will determine what happens long term. A C-class single family rental out of state may work for some, but they are not you, you may be different.
2. It's not all about what the spreadsheet says. Initially I was so focused on cash flow and nothing else. I've learned the best return was the appreciation and debt reduction (thanks to the tenant paying rent). It's amazing what a few years of debt pay off and appreciation can do. Keep in mind, when I speak appreciation I'm talking about the midwest too, not the coasts. You can hold the property for a few years, then sell for a good profit. If you want to hold it long term, you can always do a cash out refinance for renovation costs.
3. Operations and management are key. How do you want to run your business? That's what this is. It's not sit on the couch and do nothing. Nobody will take care of your property like you will. You'll have to set some very clear expectations upfront with the renter.
4. You'll make mistakes and bad things will happen. This is part of the learning process. Don't expect things to go perfect because they won't. More good things happen than bad, but eventually it'll happen. If you have the mindset that you'll make mistakes, or something bad happens you will adjust and improve.
5. Start simple. There are a lot of complex strategies out there, that doesn't mean you have to start with one. Keep it simple. The best start for my market is a duplex house hack in a highly desirable area with a standard loan and very minimal renovation. Rental rates were high, but the tenant quality was high. My cashflow wasn't very good, but the appreciation was. I enjoyed living in the area, improving my own home and my rental at the same time, the tenants, the low stress of managing it, etc. You don't need to do anything real crazy.
Branford, CT · Member since 2016 · 44 posts · 9 votes
5y
Is it possible to purchase an investment property in fla with no money down? I’m reading about DPA’s but can’t find info for fla. I want to open a bnb...
Firestone, CO · Member since 2021 · 14 posts · 5 votes
5y
@William S. For me house hacking in not really an option at THIS moment. My wife and I bought a fixer upper home 4 years ago for $230k. Flipped it 100% ourselves and is now valued in the low to mid 400s. We have a second building on our property which is our gym but we may soon convert to a secondary residence, thus increasing home value again along with passive income. I feel like that’s a decent amount of equity for a cash out refinance to play with, plus we have our cash reserves but I’d like to keep that as emergency money if possible. We just had our first kid a month ago, so we do plan on leaving the state before he is of school age, but always are searching either northern Nevada, Idaho, Wyoming, or back to Colorado where my wife is from. At that point in time we would both be willing to house hack if needed.
Would people really try to upcharge a property just because I’m from California? That’s insane lol
This is day 1 and i just learned about Brrrrr, i have decent income, but my savings is all tied up in traditional investing stocks, and roths so i dont have a lot of cash on hand. What is step 1-10? To get me to buying my first piece of realestate that should earn me roi of 8-12%.
Q2.Also based on a sliding scale of invested 15,000 up to 200,000 , what should my goals be for monthly cash on cash return? Is there a rule of thumb i should be aiming for? Like 2-3% cash on cash of the initial cost of the investment?
Okay so me and my wife are looking at duplexes, and will be house hacking as soon as we find one. From your experience how do tenet's feel about living right nextdoor to their landlord?
I never had any issues. As long as the property is in a good location, condition, and you maintain the property well there’s no reason for them to complain.
Insurance Agent · Las Vegas, NV · Member since 2019 · 158 posts · 80 votes
5y
@Ilmar Molder, sr.
Usually apps like propstream will help you tell if it's owner occupied. Also check zillow price history and see if it was listed as a rental on Zillow.
I recommend that if you’re starting out that you use savings for the standard 20-25% down. I worked, saved, and kept a tight budget in order to buy my rentals. I understand there’s a lot of strategies out there, but for your first deal you can get overwhelmed with all the options. If you do not have the funds, set savings goals. While that is happening further your education, put in place your operations, etc.