All Forum Posts by: Anthony McEvoy

Hello @Gilles D.

However, at such rates it does not seem very favorable. - This is a limiting belief.  Analyze the property to figure out what monthly payment at today's rates you would accept.  Then, back into the purchase price.  Often times when rates go up, purchase price goes down and vice versa.  This is because most buyers are focused on the monthly payment.

Look at the situation even more long term... you can acquire a property at a lower purchase price and higher rate.  Then, the rates drop in a couple of years.  Turnaround and refinance at the lower rate at whatever principle is left on the mortgage.  Obviously, there is no guarantee of the future rates in either direction.

Hello @Alicia England - You will if it is a good deal or if the numbers will work by gathering the market data where the property is located.

Start by going to a site such as zillow.com or realtor.com and look at what similar properties have recently sold for.  For example, if it is a 3 bed / 2 bath single family home in Chattanooga, Tennessee, then do a search for those types of properties.  Narrow down to the same neighborhood or immediate area the property is located.  Find properties of similar characteristics (square footage, garage, pool, fenced yard, etc.) and also look at when it was sold (3 months, 3 weeks, 3 months, 3 years?).  Now you will know what a similar property has sold for and can get a feel for what you could sell your property for.

From there, it is a math equation working backwards from recent sales.  Recent sales - your payout - real estate transaction costs - repairs = buyer price

Best of luck and keep me posted on how it goes!

Hello @Johnathan Morton - determine exactly what you want to focus on with real estate investing and align yourself with that focus.  For instance, determine if you are going to wholesale, buy/hold, flip, medium/short term rentals, commercial, etc.  Then, determine your buy box that further defines the type of property and the geographical location.

I think it is important to remember that whatever you start with in your buy box can change and evolve over time.  In fact, it most likely will.  I started with buy/hold long term rentals in Illinois.  Now I have evolved to short term rentals in the same geographical area and am looking into other States out west (like Hawaii).

Best of look... and keep me posted on your journey!

@Tunde Osilaja
With respect to scaling, my assumption is that a cheaper market means I could scale faster, but it sounds like that may not be the case?  In a cheaper market, you could scale the number of doors faster but that may not mean you'll be scaling your cash flow equivocally.  Continuing with your example above with Detroit and Chicago (5 Detroit Houses = $315k; 1 Chicago House = $329k), there is no guarantee that buying 5 houses in Detroit will result in a similar cashflow/financial outcome of one house in Chicago.  The financial outcome could go in either direction, better or worse.  The blanket statement that a cheaper market would allow you to scale faster [the number of doors] and result in a better financial situation is a fallacy.  Another perspective with more houses in Detroit is more mechanicals can break, more pipes to leak, more roofs to replace and more tenants to collect rent from.  Of course, it also means that one vacancy does not equate to no income with multiple houses such as in Detroit compared to one house in Chicago where one vacancy means zero income.  Then it goes back to money management when you do have income and preparing for vacancy.

Are you saying that there is really no major cost advantage to investing in market's like Detroit versus markets like Chicago?  This is also a blanket statement that should not be made.  Logically thinking, no one would invest in Detroit or any other lower valued market if that was the case.  There a multitude of reasons why one would invest in any area such as path of progress, corporation moving to town, availability of contractors, realtor/wholesaler connections, etc.

Hello @Khari F. - 
How do they know you would use those funds for PITI? The banks are trusting that you will maintain some level of reserves.

Am i required to put that lumpsome in escrow?  I have never had to put money in an escrow unless it was for my personal residence.

How impactful are piti reserves on rate, LTV and approval?  Every bank is different.  If the require it, then you need it.

Your best course of action is to ask banks their lending requirements since every bank is different.

Hello @Tunde Osilaja - This is honestly a tough post to respond to.  You clearly laid out some of the pros/cons to the options presented.  It really comes down to personal preference, your day to day activites, and what will allow you to sleep at night.  If you need to drive by and check on your properties at will, then long distance real estate is not really for you.  Also, cheaper real estate does not always mean a better opportunity.  On the surface, perhaps it does.  Deep diving into the numbers, it is often relational.  Cheaper real estate often means smaller returns.  Therefore, you may spend the difference visiting the properties.

I had a glass top electric stove in one of my rental properties.  The tenant did something where the glass top cracked - they most likely dropped something on it.  The stove was old and the property manager claimed they could not find a replacement glass.  Therefore, a new stove was purchased and installed.  I noticed on my last statement that the property manager did not back charge the tenant nor is it their intention.  After questioning my property manager about the situation, they responded in an email stating:

The stove was around 15 years old and when it broke, we couldn’t get the part to fix it and we cannot charge resident for something that old. But we did charge resident the charge to install it.

Does the age of the stove matter?

If the tenant never broke the glass top, then it would have still been working as intended.  I am impartial if these tenants stay due to multiple facets of this property and the situation as a whole.

I am looking to start a short term rental business in the Tampa, Florida area.  Anyone want to meet up?  I am looking for partners.  I would like to meet with people who can share specifics about their experiences with short term rentals in the area.

I am also open to meet with others in the southwest Florida area.

@Mitchell Mclocklin - I have been using landlordlocks.com.  Their system has treated me well.  Their "Multi-Family Solution" is what I use and it sounds similar to what @Account Closed described.  I have two keys... a master key that opens every door on the system and a control key so I can change the cores.  If your doors have deadbolts and knobs, buy passage knobs (no keys) that don't, save a few dollars and minimize lockouts.

@Carson Engelhardt - Is it furnished?  If not, that is an extra start up expense.  Also, consider having a streaming service such as YouTube TV for the guests.