Hi my name is Kenny and I'm in eugene, oregion. This is my first post. I have a few questions that I haven't been able to get any clear answers.
1. with repairs, when looking at an investment property, how have you learned to know what needs to be repaired or do you have an inspector go to every property your interested in and give a rough quote without charging?
2. if attempting to house hack how would you calculate if it is going to generate income while living there and when renting both sides?
3. how would i pick my team if im not sure where to start out?
My main goal is to be financial free and flexible if needed. i want to start with a duplex ( maybe a triplex) and live in one side then later down the road purchase another property with the intention of buy and hold. any information on this will be great. thanks in advance
Good Morning Kenny,
Great questions, hopefully other members will chime in so you can see the power of these forums.
1. If you don't have enough background knowledge with respect to repairs, you can hire a contractor and have them walk through the property with you and give a repair estimate. Not sure how much it would cost in your area but most contractors would expect a small fee for their time. Aside from this, taking pictures and just checking out every detail can help you get a sense of how much work needs to be done (not necessarily how much it'll cost).
2. House hacking is a good strategy for beginners like us. You should run the numbers as if you won't be living there. This will give you a sense of what cash-flow will be like once all units are rented. Get a sense of what market rents and vacancies are like to help you plug in these numbers.
3. Ask around on BP, get out to local REIA meet-ups, set up keyword alerts i.e. "accountant-eugene", "investor-agent-eugene", etc...
Pretty much anything else you need to know can be typed into the search bar where you'll find dozens and hundreds of blogs, forums and even podcasts.
Best of luck to you!
1. I would only get an inspection by a licensed inspector when you have a property under contract (this is to find what you couldn't see without going in the attic or crawling under the house). But, before you make an offer you should have a general idea of the condition of the property. Most repairs you should be able to see with a discerning eye but there are some you won't know about unless you dig into the walls (these come with experience and usually only an issue when the house has been extensively remodeled or added on to). When walking through a house or apartment think to yourself, would someone want to live here? If not, what would you need to do for someone to want to live there? In the Eugene area, most multifamily you will be looking at will be built in the 1970s, If you don't have experience, I would recommend staying away from properties built before then and you should be okay. If you go before the 1970's there is just a lot more you have to be aware of (ie. galvanized plumbing, un-grounded wiring just to name a few issues with older properties that are expensive to upgrade). Always think about the big ticket items (foundation, Roof, plumbing, electrical, HVAC, kitchen, baths). Sometimes the more messed up something is the better deal you can get but you have to know what you are getting into. I would always recommend finding someone to learn from before you jump in on your own, whether that is another real estate investor or contractor.
2. When you house hack you should first ignore that in your analysis. Your cost of living there is not the difference between what the other tenant(s) pay and your costs but what you could rent the property for if you didn't live there. You will then want to weigh whether is makes senses to pay yourself the market rent or pay rent somewhere else (of course getting the low owner occupied mortgage rates means you should intend to live there but there is nothing stopping you from living there for 6 months and then your life plans change (or they don't if you want to stay)). House hacking is great and I've done it, but that should not be the reason you do a deal. The deal should support itself and then house hacking be an added benefit. Think of it as two separate transactions/decisions.
3. There is a REIA meeting in a couple weeks. I've never been there but I am going to try to go.
I would say, just network. Don't network with an end in mind. Just meet people, tell them what you want to do and your goals and see where it goes. The first 10 people you talk to probably won't work out but if you make a habit of it and do it with intention then eventually connections will stick.
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