Real Estate Agent · Eastern Wisconsin · Member since 2018 · 10 posts · 6 votes
With at least 7 rate hikes planned in this year alone, the rising cost of gas and the overall financial climate, how does a new investor decide on an approach? Or is this just a really good time to get to know my bigger pockets calculator and wait this out for a few months?
Real Estate Agent · Austin, TX · Member since 2020 · 1k+ posts · 941 votes
4y
@Jennifer Borkenhagen I'd consider your end goal. Where do you want to be in 10/15/20 years. From there you can work backwards and decide what makes the most sense for you to purchase. If a deal makes sense today it'll make sense in a few years. Don't wait to buy real estate, buy real estate and wait.
Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
4y
@Jennifer Borkenhagen Instead of relying on BP calculators create your own. That's what I did when I first started out and it really jump started my understand of REI. Combining this with market research is everything. It shows what the numbers actually do for an investment. Every DEAL has different rental rates, property taxes, CapEx, insurance, and predicted vacancy.
Understanding these terms and what you can control is critical to your success. In my opinion everything else is white noise. If an investment doesn't align with a strategy or have any upside (day 1) I'm not buying.
Real Estate Agent · Austin, TX · Member since 2020 · 1k+ posts · 941 votes
4y
@Jennifer Borkenhagen I'd consider your end goal. Where do you want to be in 10/15/20 years. From there you can work backwards and decide what makes the most sense for you to purchase. If a deal makes sense today it'll make sense in a few years. Don't wait to buy real estate, buy real estate and wait.
Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
4y
@Jennifer Borkenhagen I don't think there's anything to wait out. You just have to buy right. What are you looking to do? Do you own a primary residence yet?
Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
4y
@Jennifer Borkenhagen I totally understand your perspective. With prices so high and all of the economic uncertainty, there is definitely a lot to worry about.
With that said, I think it's all about making good decisions at each step. So, if you're going to house hack a duplex, make sure you're confident in the numbers before you buy, and run the numbers conservatively. Interest rates may go up - but once you close, assuming you're taking out a fixed rate mortgage, that rate will be fixed, and can't go up even if the market changes. And, if the property is vacant and you get to place the tenants, make sure you screen effectively so that, hopefully, you get good ones who pay. And, just because you live there, you can still use property management if you want, and they'll deal with everything.
I hope this helps. I've tried to improve with each property I buy. I have a duplex myself in which one of my tenants isn't paying... but luckily the tenants in the larger unit are, and that covers the expenses. So that's something I'm very concerned about. =) But I'm OK because the numbers still work.
Real Estate Agent · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes
4y
Waiting generally has more cons than pros. The first question I tend to ask is what is your current living situation? House hacking is a great way to get started and safer than full on rental. You have to have a roof over your head anyways so it is just a matter of your money going towards equity or towards rent.
I would look into areas just outside of desirable neighborhoods. As one area gets priced out, tenants and future buyers have to go somewhere.
Buy when you are ready to buy. As mentioned above, real estate is a long term play.