All Forum Posts by: Andy Webb

 For what it's worth - that is not necessarily the case elsewhere in Texas.  We picked up a few new builds in communities where none of those apply.  Targeted the cash flow of course!

Depends on your goals.  If you are just looking for cash flow and it does cash flow, then sure.  Low to no maintenance is great.  If you are looking for that big equity pop that you get through a good rehab...forget it, you won't have any equity beyond your down payment.  Of course you will gain equity as you hold, but it will be slower and I don't think we are going to have the level of appreciation here in Texas that we saw over the last few years, though I do think we will see price growth.

Andy

No - by definition you are buying a property as the owner occupant in part to take advantage of the better financing you will get as an owner occupant, so you should be buying in your own name.

And generally I don't think an LLC is warranted on your first one, two....etc properties. Just make sure you have good liability coverage, perhaps an umbrella liability policy.

And above all, just be a good operator.  Good operators don't need to worry as much about being sued.

Andy

Yes, and as a mortgage it will count against your FNMA "10 financed-properties buckets" if you are worried about those.

 Thank you for the Drano comment!  I was going to add that as well.  Bad stuff for the pipes.  If it is a local clog, better to use one of those "zip it" plastic tools from the box stores.  I have seen leases where those are provided at the start of the lease and the tenant is obligated to replace as they wear out...

 Got it - if you are targeting more cash flow as your primary goal, then I would say to your post title:  go ahead and "Level Up".  Don't be married to that low rate for the sake of it - too many others are...Sell that thing and put the 100k to work in other properties.  Look at the 1031 Exchange for your sale - I have a great agent for that in the DFW area if you need a contact, PM me.  

Andy

@Nathan Harden - they are in Capital Gains territory now - they have held it for longer than one year.  Selling under one year would put it in Earned Income territory.  So in that sense, the OP is where he wants to be to consider a sale...Capital Gains rates rather than Earned Income.

Of course, he could do a 1031 Exchange and defer those capital gains taxes, depreciation recapture, etc....@Daniel T Stockman - you might add the 1031 Exchange to your list of options.

I would consider WHERE in DFW this property is, given the news that is coming out daily with firm relocations and new development (think Universal Studios coming to Frisco) - I think some areas may see greater appreciation in the near to mid term than others.  That might help you weigh the keep vs sell side of things.

And if you do decide to keep and self-manage - as someone that has been in this space for over a decade, self-managing houses spread all over DFW...I can tell you - it is not that hard nor time consuming if you have a good product (e.g. not a ton of deferred maintenance or other ongoing maintenance) and you are very thorough with your applicant screening and set expectations with your residents up front (e.g. do the "training" at move in let's say).

Final thought - you can fire the PM, give the self-management a try for a while...if that does not fit, return to your other options.  Doesn't hurt to try in my view.

Good luck!

Andy

@Malinda Cardel

I retired myself from Corporate America by building up cash flow from rental properties - that is what "inspired me" ultimately: getting to financial freedom. Add a son to the mix in the middle of the process a few years ago and that just further stoked the fire. Never flipped a house, always target rentals, mostly around DFW and Houston, over about a decade now, essentially the BRRRR model you read about on the forum here.

I have looked at the Tennessee market.  From a rental perspective, Nashville looks overpriced right now, but you are in a perfect market in Chattanooga.  I have seen some really interesting rental investments there.  If I were you, I would forget Nashville for now and focus on your home town.

Good luck,

Andy

@Mahdi Mike - I think you can relieve a lot of your own confusion if you get very specific with your investing goals and express those in your forum questions.  You may have these dialed in already, but the original post was very broad in nature.  And a broad question is inherently going to get a broad array of replies.

If you can be specific - hey I am paying all cash (or puting 20% down, plan to buy with hard-money, or whatever) and am focused squarely on a cash on cash return of N% (vs. some amount of equity capture); looking for lower out of pocket or don't care; I don't or do want to do rehab properties....That sort of detail will change the conversation dramatically. 

I personally love the rehab properties and the equity we create through the BRRRR process - of the areas you listed, Irving in my mind is the best, though Plano has some good pockets too. If you are going for a rent-ready place, that may be Frisco...hard to say until you are clear on what your target property and target returns are.

If I have to stick to that list (and ignore "Other"), then Irving is the winner.  You are more likely to find a good purchase price point there, probably on older inventory that will require some rehab - but that is what we want to create some equity.  And that market rents fast, huge renter pool, working-class demographic for the most part, middle of DFW - great place to be.  Those other locations will all carry a very pricey entry price.

I did not closely read the other posts, but I did see someone mention Haltom City - I like that city, and those around it (e.g. east Tarrant County).