Ludington, MI · Member since 2013 · 29 posts · 4 votes
Hello! My name is Elizaveta, but feel free to call me Elizabeth. I am from Russia, just moved to Ludington Michigan a year ago.
Here is a little of my story:
I have master's degree in finance and degree in English-Russian translation. As I have just finished college, I have 0 experiense, especialy in another country. So I am doing my best to educate myself by reading lots of books, blogs and forums.
And this is how I appeared here:
At the book store I saw (of course) "Rich dad, poor dad", that I've heard about from my friend in Russia. I loved it, that's how I found Brandon Turner's blog. And Brandon led me here. THANK YOU BRANDON FOR THAT!!!!!
I've been studying about real estate investing for 6 months now. I'm interested in Grand Rapids area mostly. I absolutely love Biggerpockets!!! I can't believe that so many people like helping newbies to reach there goals. Thank you all for that!!! And thank you Joshua Dorkin for creating all this!
Investor · Maui, HI · Member since 2009 · 13k+ posts · 3k+ votes
13y
Hey Elizaveta Voloboeva welcome to BiggerPockets and thanks for the nice words about my blog! :) It's nice to hear more than just my mom read my ramblings!
Rich Dad Poor Dad did it for me as well. Awesome book!
Ludington, MI · Member since 2013 · 29 posts · 4 votes
13y
Thank you Dawn! I hope this fact is not going to make things more difficult)
Thank you Aaron! I like the idea of multifamily investing, but I'm still comparing it to SFH, and my husband has always wanted to buy a house in the Keys, so I want help him to get a great deal, that is going to bring us at least a little of cash flow.
Thank you Tina for great words!
Thank you Brandon for the tips! I did a little of my homework))) I've read your very interesting book! I've had though one question about it, that I'll ask you later) I'm almost done with "The Ultimate Beginner's Guide to Real Estate Investing." And I've read thousands of blogs here. I just felt that I needed to learn the language everybody is speaking here, before I introduced myself)) Just like I was learning English before I moved to US))))
I can't wait to start comunicating with everybody in the forum. Sorry but I've got million questions
Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
13y
Hi Elizaveta,
"I like the idea of multifamily investing, but I'm still comparing it to SFH"
These 2 are night and day apart in how they function.
For loan purposes SFR is lumped in with 2,3, and 4 unit properties. Some investors with buy a duplex, tri-plex, quad and live in one of the units. This way they can get an FHA loan for 30 years at a fixed low rate with just 3.5% down whereas buying strictly as an investment you will have to put much more down on the loan.
Now 5+ units is commercial and multifamily lending. The term (length of loan, amortization schedule, down payment, and interest rate) are usually all different from residential.
The big question is how much do you have to invest in cash right now??
How much debt are you personally comfortable guaranteeing on a loan?? Example somebody has 1 million cash but for their first apartment building they only want to deploy 350,000 of it and do not want to go above a 2 million sales price.
Do you want to stay active or passive with your investments?? Meaning do you want to work on the property (repairs) and do management everyday or do you want to have the structure in place with a full time manager and maintenance person where you just get the reports and cash and be passive??
Do you care more about appreciation, cash flow, or a mixture of both?? For example a busy professional might not care about as much cash today as they do about have a property in a nice area they hold for retirement and the tax write off benefits they get today. They do not want a high yield property in a marginal location with a lot of risk.
If you have less money to put down you can buy a small building 2,3,4 units, save up more money for a larger building, or you can partner with other with cash to purchase a larger building. You can also buy shares in REIT's etc. and by hands off but those do not offer some of the benefits and payoffs of direct ownership.
I hope this helps and as you can see by the questions the WHY you are investing is critical to nail down the right investment.
Ludington, MI · Member since 2013 · 29 posts · 4 votes
13y
Hello Joel! Thank you for your post! You are right it is different. I wasn't correct in my post. I'm trying to decide if I want my first property to be a 2-4 unit building or just a single family house. 3,5 % down of course sounds much better for me right now as I don't have uch cash laying around.
The price shouldn't be highertan 250K. That would make me feel more comfortable. And for the first deal I plan to use bank's money. I plan to manage my first properties myself and find a great team who would help me with repair job.
I caremore about cash flow, but it would make me feel better knowing that I can sell it for not lower price as I bought it. Besides for Buy and Hold I'd like to have nice tenants so as I understand location matters too.
I feel that 2-4 unit building could be a better deal, but I'm sure if it's going to be harder to find tenants or sell as soon as need.
Specialist · Grand Rapids, MI · Member since 2012 · 582 posts · 353 votes
13y
You picked a nice town to move to Elizaveta Voloboeva - Ludington is one of the best kept secrets in Michigan!
The counties around your area are actually LOADED with opportunity. I've done several transactions in that area of the state and there is no shortage of deals to be had (depending on which strategy you're using).
Ludington, MI · Member since 2013 · 29 posts · 4 votes
13y
Hello Seth! Living here I started to notice that many SFH are struggling to find tenants or can't sell the house, that's why I was thinking more about Grand Rapids.
I wonder if I could ask you some questions in messages about West Michigan area, as it is totaly different with Russia))
Thank you for your post!
Specialist · Grand Rapids, MI · Member since 2012 · 582 posts · 353 votes
13y
Elizaveta Voloboeva - if you're looking specifically for properties to buy and hold (e.g. - rental properties), then yes - you probably will have better luck in a bigger metro area like Grand Rapids (simply because of the larger population and diversified economy).
Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
13y
Unfortunately in life, people who are either young or female, have the problem of not being taken seriously. And if you're both, it can be a double issue -- especially when viewed by contractors, etc.
But you need to make your own path and not let the naysayers get you down.
Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
13y
Let's keep this topic about real estate investing please. We seemed to have ran off the tracks some here.
You must not only have the down payment to purchase the property but closing costs and money for inspections and lender ordered appraisal. You must also have built in reserves to handle sudden repairs and evictions and still be able to pay the mortgage to the lender/bank.
I would encourage you especially if you are managing yourself to learn the eviction process and tenant screening and actually go to some court hearings for evictions before even buying anything. You really need to get a feel for what this is like before committing money to it and guaranteeing a mortgage. Also go ahead and count in costs for a property manager as you might start off managing yourself but then decide to let someone else do it later.
Ludington, MI · Member since 2013 · 29 posts · 4 votes
13y
Thank you Dawn for you post! I guess I'm gonna use this disadvantages as a weapon))
Michael thank you) I will later)
Joel, I agree with you about all the expences, I still add more and more new ones that I'm gonna have to pay. About going to the court.... that is not going to be very encouraging. But I'll think about it. Are there any other mistakes that new investors make that completely destroy there plans?
You are right I was reading a lot about how great it is, it's time to take off pink glasses and think about all the mistakes I should NOT make.
Lexington, KY · Member since 2009 · 2k+ posts · 1k+ votes
13y
Welcome to BP Elizaveta. There are as many mistakes that can be made as there are ways to make money in real estate. New real estate investors tend to analyze properties by applying best case scenarios and convince themselves that those numbers will be reality. That mindset causes new investors to pay too much for properties, underestimate expenses and overestimate return on investment. In my opinion that is the most common mistake new investors make.
Another major mistake I have seen over and over again is investors making exceptions to their criteria when placing tenants. Again, it is the "best case scenario" mindset that clouds the judgement of investors.
