All Forum Posts by: Alicia Marks

Your estimates will improve the more you practice. When you walk a property, you'll be able to more easily estimate the work or additional items that you may not have accounted for previously. As for the $10k rehab, I would say that number is pretty low to expect, especially on multiunits. While you may not require a full rehab, even a make ready of a vacant unit can be $1000-2000 in painting and small repairs. You would likely need to find turnkey or near turnkey properties which will lower your profit margins and COC return in general. Even the little things can quickly add up on a property, especially a multifamily.

It's great for you to get an inspection, both for knowledge and negotiation, but you will want to have a decent understanding of how to read a seller's disclosure as well as things to look for when walking a property to know if an offer should be made at all. Sometimes you can pay a contractor a walkthrough fee before making an offer that will give you an idea of possible repairs. Paying $100 to save you six figured worth of mistakes is well worth it. 

It's great that you are accounting for a cushion for taxes a well as a sinking fund for major repairs. Being prepared makes what could be an emergency more of an annoyance instead. 

For insurance, I use NREIG, which I know does Michigan properties. They are policies for landlords. You'd need the address, unit age, additional buildings (garage, pool house, carports, etc), and whether the unit is occupied or not. You also generally need to know about fire prevention in the building such as firewalls, sprinkler systems, or whether each unit has a fire extinguisher. You'll also need to decide if you want full replacement cost (complete rebuild if the building is destroyed or purchase price replacement cost).

Keep it up!

Great work! Sometime paying a little for something like property management is a no brainer.

Hi Trent! Looks like you are doing a pretty thorough analysis. That's great because it allows you to analyze well. A few things that I see: The rehab budget for a 6 unit seems very small. Will you be doing the work yourself? What delayed maintenance do you need to account for? Are you getting an inspection? Are your property taxes estimates? I would give yourself a cushion if and when there is a reassessment. Same for insurance. I have a 2 unit in Michigan and pay $96/mo, so a 6 unit at $120 seems a little low. Make sure you check the coverage for purchase coverage vs replacement coverage. Landscaping seems low as well, don't forget snow removal given your location. 

I look forward to other responses. I'm getting better at analysis, but I know there's so much to learn to evaluate a good deal.

The simple answer- decide to be what you want to be. I'm definitely not one of those "The Secret" speak it into existence type people, but making a choice to be and think differently is a conscious effort that you have to choose each and every day. On the days that you don't, don't beat yourself up. Stepping out of the victim mindset is a constant challenge, especially when you have had adverse situations happen through no fault of your own. I found a good therapist to work through those mindset hurdles, and it was worth every penny. 

I also second looking for like minded people. There are plenty of people who want to send the elevator back down to help someone else. Many of them can be found here in the forums, or local meetups. I would also encourage you to join FIRE discussions, as there are some incredibly driven people there as well.

I have had my share of naysayers, particularly if they tried one property and it didn't work out, failed flip, etc. Consider the source, always. You will need to not only shift your mindset from victim, but also into a problem solving entrepreneur to accomplish your goals. When struggles come, don't doubt yourself first, look for solutions. You can do this!

Hi @Randarious Cooper welcome! I take it you live in the DFW area. Have you narrowed down the type or area you want to invest in? I am looking to start something on the Ft Worth side. You can also search the forums for Dallas/ DFW/ Ft. Worth meetups.

@Jaraad Pretty check out the marketplace tab for a great list of realtors in the area. Are you local to DFW? We have some great meetups as well!

DFW is a great place to invest. While you are finishing up school, continue to learn from the forums, podcasts, etc. I would also look at narrowing down cities in the metroplex you are interested in, where you may potentially be working, and a realistic budget. DFW is very large and traffic can be an issue. I think your househacking approach will be a great strategy in most areas. You may want to steer clear of areas with HOAs that may limit the number of non related persons in a house if you are wanting to rent by the room.

Please check the marketplace for your designated area.

What city? It can be good to get familiar with the people scheduling so you can get quick answers or they can schedule you with inspectors that are less nitpicky.

A few things I have learned from doing my first HML deal.

1. You will need a decent amount of cash for closing costs, especially if you buy from a wholesaler who double closes (their initial closing costs and your closing costs both become your responsibility.)

2. Unless you are flipping and you are confident you can sell, loans have a "seasoning period" of usually 6 months, meaning that you can't take out a new loan or refinance within that period. There will be exceptions you can find, but it is a general rule.

3. Even if you have rehab costs rolled into your HML, you will initially be responsible for the rehab costs until you can show completion markers. A lot of people don't account for this or don't have credit lines to accommodate until your reimbursement request is completed. Especially being a person who keeps zero balance for mental happiness, this can be stressful. (Currently living this reality in a duplex rehab)

4. Can you find deals that fit in your market or somewhere with a trusted team?

I would say if you can JV or find a way to get experience to start that is the most secure way to get into RE. Also keeping in mind that since you are actively looking for a job, if you are hired that can be a stressful period where you have to shift your focus. The last thing you want is to have your hard earned savings tied up without the time to oversee it properly.

Good luck!