All Forum Posts by: Alecia Loveless

@David Banker I'd owned 3 investment properties 15 years ago 2 multis and a SFH and gotten burned on all 3. The multis in a partnership that went horribly wrong and the SFH just didn't go well.

Last year I just jumped in head first and now own 10 doors. My newest 3 plex will involve a lot of repairs, I’m not handy but I can handle contractors with the best of them.

I've read dozens of books, websites, listened to podcasts, read the forums here religiously for 2 years, etc. I think you just have to get your feet wet snd do it! If you want to start small buy a SFH. If you don't feel comfortable managing yourself, find s good enough deal that you can hire management.

Don’t let fear stop you! You can do this!

@Ren Navarro Figure out What you want to buy, SFH, duplex, multi, etc. Figure out your Why, why you want to invest, cash flow, appreciation, early retirement, to become a millionaire, etc. Figure out How you're going to make it happen. How you will get your first deal, FHA live in 3.5% down payment, conventional mortgage, partnership, bank of mom and dad, etc.

Then figure out where you want to invest. And build your team. Realtor, lenders, property managers. If you’re managing it close to where you live you’ll need to find your own contractors, plumbers, electricians, lawn care, snow removal, etc.

Then start shopping and analyzing your deals with the Rental Calculator on BiggerPockets! Well actually start analyzing deals right away because the more you analyze practice deals the better you’ll get at it and the faster you’re going to be able to find the good ones.

@Gin Andrew I'm going to sell my SFH that's got high appreciation because I've got a big project I want to get into and a HELOC or Refi won't give me enough money and would strap my DTI ratio if I needed to borrow more because I've got a low paying job.

However in your case if you are trying to build a portfolio of rentals I'd either take the HELOC or BRRRR and buy another rental type house that is in a quiet neighborhood and live there 3 years this time to qualify for the 2 out of 5 years snd do it again and move and buy another or a small multi if you could handle it off a couple years.

Then when you get ready to buy a more permanent house you can do that and save up for the next rental.

@Heather Rodden I bought a SFH before my market popped and have been going back and forth about selling it. It would take about 15 years to generate the rent that I could make selling it now. My partner finally said to me you need money for your next investment (I want to do something substantially larger) and a lot could happen in 15 years. You should just sell it.

If you can 1031 them into something that will profit more perhaps you should just sell them now if your rental base is declining and you could make better cash flow elsewhere.

Not every “starter portfolio” is meant to be kept forever, but rather meant to be a beginning point to teach us the ropes and get us into a larger, or bigger market.

@Jason Hawrylo I too have the exact setup you do with the Roth and 403B. I received very poor advice regarding retirement investment in my 20s & 30s and am now playing catch-up.

This is why I am attempting to create a large portfolio of passive income producing real estate. I've got 3 multis and am about to sell a SFH to move into a different asset class to diversify a little.

I am still investing in the retirement funds because I too am in a low income bracket and while I will never build up a massive retirement stock portfolio I think it’s also a viable option.

If you have a larger stock portfolio one thing you might look into is making it a self-directed IRA and then you could use it as a down payment for a property and all of those proceeds would then go into your retirement fund and might have better returns than you are currently getting through the stock market.

I will continue to follow this post and hope others post on it.

@Ken Oz I believe (and I could be wrong) that Brandon Turner says he looks for at least a 12% CoC return when he's buying an investment.

Personally, I'm investing in my local market which is pretty small, and am buying deals that are cash flowing in the range of $125-150 per door on a standard 30 year mortgage with 25% down and am seeing about a 5-6% CoC return.

Brandon says to keep looking for better deals if this is all you can get but these are good properties in very nice condition as opposed to others in my area, that will still continue to be rented at their current levels even if there is a market turn and housing prices fall.

I would also feel comfortable living in all my buildings and do in fact live in one of my duplexes that I am fixing up some as I go along that I could rent for $1500 a month were I to move elsewhere which is a great rent for Northern New Hampshire.

@Juan V Lopez For about 22 years I owned, ran, and lived in a bed and breakfast. After ending a 20 year relationship I realized the time had come to move on and an opportunity arose to buy a duplex close by. My new partner and I moved into 1/2 of the duplex and I sold the bed and breakfast. The other half we renovated and is rented out to my tenant from an ADU at the B&B who moved with us.

For now as I am building my portfolio it makes sense to have income coming in from my primary residence through house hacking. I have a 5 year plan for retirement from my W-2 job. By then I would like to be able to move into a SFH.

I think everyone is different for their tolerance of living with others. It never bothered me at the B&B having 14-18 people living under my roof at one time which is why I don’t mind the duplex. My partner on the other hand never had a college dorm experience and bought her first house at 24. She never lived in a mega-apartment complex so having the tenant next door in the duplex bothers her a lot more.

You have to figure out your tolerance level before you jump into something you hate. If you buy a SFH expecting to have a roommate as a house hack to pay the mortgage and hate it you have a problem. If you buy a 4-plex on an FHA loan and live in one unit and hate it after one year you can move out and find a new tenant and buy a SFH with your income from the 4-plex and live alone.

@Anastasia Maddox I think you should move on from this deal because there is not enough left over for your CapEx and reserves as the others have said.

However Always Always Always get a septic inspection preferably from an independent septic inspector who is not affiliated with a septic company who sells septic products, installs, or services them. They will only want to tell you about the health of your system and not be trying to sell you parts or a whole new system.

I just had one done and it ran me about $600. It was well worth the cost because with a few issues that came up if an installer had done the inspection I think they would have told me I needed a new system while this inspector explained what had happened, what needed to be repaired, and that I should have another 15-20 years on the system.

@Chad Summy See if you can get your wife to read Rich Dad Poor Dad if she hasn’t.

Join the local and state Real Estate Investors Association on Facebook then start asking for recommendations for the contractors. Or even your local town Facebook page and ask for recommendations. My page is great for that.

If you don’t bank locally already I would consider opening an account with a local bank or credit union to try to make a connection for when it comes time to get your financing. I’ve had great luck with my local bank, they’re not too small I think they have 19 branches, but they service all their loans and don’t sell them, and have bent over backwards to get me my loans.

Try to figure out how much time personally you want to put into the project, will you do renovations, buy turnkey? Are you buying a sing family a multi a STR? Will you mow the yard and do lawn care, etc. Have a plan.

Go on the BP rental calculator, become a PRO member if you’re not already. Watch one of the Wednesday podcasts there’s a discount at the end to go pro. Use the Rental calculator to figure out the expenses and the areas you will need to spend money on and see if it’s things you will do or hire out. Practice looking at deals and analyzing them so you’re ready to pitch them to your wife.

@Joey B. I bought a B&B when I was 21 and owned it till I was 44 so moving into a duplex was very easy. I was totally used to sharing my living space with 14-18 people at a time.

My ex and I hand picked our tenant, we knew his ADU was being sold so we subtly suggested he might like our carriage house and he kept at the offer. Fast forward 3 years and I sold that build and bought the new duplex with my current partner and my tenant moved with me.

I think multi family living is fairly easy if you have strong leases that spell out everyone’s expectations. You need quiet hours, you need to be respectful, you must quickly learn to screen tenants properly and thoroughly

I do think sharing your home or apartment with a roommate is harder and not for everyone.