All Forum Posts by: Adam Tafel

@Tommy Adeoye - how much capital do you have? These methods of REI typically require a decent amount of cash, despite what people on the internet will tell you... Newbies are highly discouraged from attempting flips, I'm 5 years into my investing career and still wouldn't feel comfortable doing one at the moment. BRRRR might not be a great strategy either with all the economic uncertainty this spring, I wouldn't want to be counting on a re-fi going through this summer or fall.

I like that you've identified the "why", that's key! Get to know your market, network with agents/lenders/investors, look for a deal to buy and hold. Stay within your level of expertise and use these forums to get help analyzing deals. 

I agree with @David Barnett, sounds like a good deal at roughly 6%. A bad/cheap PM can cost you a lot in the long-term, are they doing a good job so far? 

@Luke Carl when does this go into effect? 

@Andrew Deck - welcome to BP! 

I highly recommend using an independent broker. Like @Brenden Mitchum said, the product will likely be the same. The difference is that (in my experience) independent brokers are often the most knowledgable and available. If you're writing an offer at 9pm on a Friday night, is your Wells Fargo guy going to answer his phone and jump on the deal? I would also recommend using a lender who also invests, and coming up with a long-term strategy with them. Using the wrong loan and the wrong time can cost you thousands in future opportunity costs. Reach out to your local BP forums to get lender suggestions, I'll send you some of mine in a PM. 

2/1 SF in West St. Paul. Purchased for 135k, FHA, in 2015. Absolutely crushed it on Airbnb for 3.5 years, but those returns aren't as great as they used to be. Still cashflows well, and has appreciated significantly over the past 5 years. Considering selling to get into more MF investments.

What do I wish I knew? I would have done a few more updates and repairs before renting. It's easy to get things done when a home is vacant, and can be a pain with tenants and furnishings. I used to kick an extra $1000 towards my mortgage every few months, which wasn't a great strategy at 4.5% interest. Better off having that money in the stock market or cash for future deals. I also would have used my FHA loan on a bigger/more expensive 3-4 unit property, although I have no way to prove that this would have generated a bigger return. For a tiny house in a B-class neighborhood it's been a phenomenal investment!

Welcome to BP @Patrik Fougere! My investments are mostly SF, making goals to get into more MF in the coming years. Cashflow isn't necessarily "better" with either, but most on BP would report that MF is a more efficient use of your time. Turn-key properties of either type don't cash flow very well right off the MLS (in my market), I'm looking for value-add opportunities. Unfinished square footage in 2-4 unit MF is what I'm currently looking for - the returns are excellent, and less risky than buying a distressed property.

I've done well on my SF investments, but I've been utilizing creative rental strategies (furnished mo/mo, rent by room, Airbnb), which require more time and effort. I only buy SF housing that I would be willing to live in, so there's an additional exit strategy. While a MF or commercial property is only worth the income it produces, SF can be sold to both investors and traditional homebuyers, and can often be easier to sell (although not in my market for the past few years, small MF is moving quickly).

You'll find people on BP who have generated massive wealth doing anything and everything, but you'll probably find more who've done so with MF housing. If I could give any new investor a To-Do list for today, it would be:

1. Find a lender who is also a successful investor. Meet with them and discuss your goals. Realize your purchasing power.

2. Meet with agents/investors/wholesalers in your area. Get a stream of properties hitting your inbox every day.

3. Learn to analyze deals, utilize the BP calculators and forums. 

A few weeks of this ^ practice and you'll have a good idea of which property type is best for you. I don't know your goals or market, but this should do the trick. Good luck and keep us informed! 

Thanks for sharing @Ryan Flanagan! Looking forward to seeing some pictures. 

@Nasra Aydid - welcome to BP! We host a meetup every month, search for "Twin Cities Real Estate Investing" on meetup.com. Great way to network with local investors, lenders, and agents. 

@KENDRA J. - I've been through this one in the past... I would start with a direct phone call to the tenant (father, on the lease). In today's age of texting/emailing, I find that I get the most direct and honest responses over the phone. While a tenant can choose words carefully and strategize over a carefully worded email, catching someone off-guard over the phone will likely get you the truth about the situation. Follow up your correspondence with email, summarize the conversation so it can be documented.

Based on my experience, fathers who allow their adult children to live in their second homes typically pick up the financial slack when needed. Dad's credit and rental history is on the line, and he'll want to protect it. You want to come from a place of helping/generosity when you reach out (especially considering the current climate). Once you become accusatory or create a you vs. them scenario it's an uphill battle.  If they see you as a friend they're more likely to care about maintaining a relationship (and pay you in a timely fashion). 

Best of luck! 

@Nathan McDonald - I dealt with this as a tenant years ago. My building has switched hands, and I was scheduled to move out in a few months. I hadn't done any damage to my unit, but my new landlord stated upon moving that he couldn't legally take my deposit even if I had. I'm not an attorney, but big management companies typically know their rights and use every advantage possible.

You could probably keep some of their deposit without consequences, I'm curious how many landlords have actually had deposits challenged in court? It's rare, as most tenants won't find it worthwhile to jump through the necessary hoops. That still doesn't make it the "right" thing to do, you'll have to make that decision for yourself.

I'm assuming you saw the inside of their unit before buying the place? And that the condition of their unit factored into the price you paid?