All Forum Posts by: Aaron W.

@Chrissy Severance Is the cash flow consistent? What expense items are the highest? Are there ways to decrease the expenses and/or increase the income?  If you've just purchased a property and there is negative cash flow because you are doing renovations, stabilizing the property, or poor management by the prior owner, then it is less of a concern than if you've held the property for while and the cash flow is still negative.

Depreciation is typically factored in after the cash flow. 

@Teodoro Vecchio Nothing will really beat a local property manager who works in the market/neighborhood you are looking to purchase your rental. If they are good, they should understand the trends, rents, and best ways to market your rental. 

The free sites should only be used as a reference as they are not completely accurate all the time. I've noticed in the markets we invest in that sometimes it's high and other times it's lower than what the rental market is able to bear. 

Speak with multiple property managers if you go this route. Not all property managers are created equal. There are good and bad property managers. Each one will have their own opinion of the market as well. You should go with the one you are comfortable working with and who shows the most competence and pride in their work.

Best of luck!

@Jamie K. The fact you have a set of goals puts you on the right track for investing.

If possible, I'd refi and take the equity and place it in the next property.  Multifamily is a great way to go. When I started, I went straight to multifamily.

Best of luck!

@Jamie K. Why not just keep the property and either refi or get a HELOC on it and use the equity to either pay off the other HELOC or continue to invest? It seems like a good cash flowing property.

@Luke Hoffman The SSN is to run the background check on the applicant. I am also leery to give or ask for a SSN as I am very security conscious. Ensure you protect this information if the tenant gives it to you and ensure they don't email this application with the SSN or email the SSN to you.

@Kajal Aggarwal Unless it is written in the agreement, you will be responsible for the repair including costs of material and labor after you close on it. Depending on the cost to complete the repair, it may or may not be worth the effort to put this in the contract since it sounds like you are well on your way to close. You can always make the request to the seller if you want to, however.

Best of luck!

@Moon Molson Congrats on your first deal!

I'd still keep some capex around, but you won't need as large of an amount since it is a new construction. Even new construction can have repairs/maintenance and capex needed as not all building are built equally.

Best of luck!  

@George J Roth  Thank you for your service. 

You really have answered your own question when asking this question.  You should ensure before you buy that the property you purchase is going to cash flow as a rental. Many new real estate investors assume that if the mortgage is covered, then it is a good investment. This thinking is wrong.  You have also account for items such as property taxes, insurance, repairs, maintenance, contract services (landscaping/snow removal), capital expenditures (roof, water heater, etc.).  

You can use the BP calculators to help you account for the items above and make a determination if your home is going to function well as a rental property. This does not have to be the only option, however. Some people realize the property does not cash flow as a rental but still end up holding since it is in a highly appreciating market. 

Best of luck!

@Sharmelle Gore  We're all looking for the off market deals. Very rarely is anything ever truly off market or a pocket listing anymore. If a broker says it's off market, it's not really off market. They've probably sent it to a handful of their "qualified" buyers. 

Say persistent and keep making contacts with brokers and driving for dollars. It will pay off.

Best of luck!

@Pearl Miller Congrats with your desire to get into real estate. 21 is not late to get in. In fact, you are well ahead of most people out there.

You can look at hard money lenders who focus more on vetting the deal with less emphasis on your credit. Another option is to find a partner who can help qualify for financing.

Best of luck!