All Forum Posts by: Andrew Frowiss

Hi @Tristan Moylan thanks for posting!

Sounds like you have some good options. I'm not a financial advisor so this isn't me providing financial advise, rather these are my opinions and thoughts on your situation.

Since you are young and working (not retiring in the next few years) I would recommend investing in multiple single family houses, or small multi family properties in a high appreciating market (Austin TX is a great choice). Buy them with loans, and refinance after to get into your next deal. Hold your rentals in a high appreciating market for a number of years, build equity, buy new properties when you are able. If you do this eventually you should have enough money to 1031 your portfolio from a high appreciating market, to a market with lower appreciation, lower purchase prices, but higher cash flow. 

Cash flow is great, but it's not going to help you retire when you are ready. Build equity while you are young and working, and later transition into cash flow.

Just my thoughts! I wish you the best of luck in your future endeavors!

 I'm fortunate enough to work in an office that primarily deals with investments, so my Broker already had a spreadsheet put together that he gave to me. I think if you read that book, and some others you could put together your own spreadsheet. It also may be worth checking if any of the other Realtors in your office work with investors. 

Hi @Stephany D. thanks for posting!

I would keep it simple and to the point. Stay in touch with him and let him know you will send him deals that you think he would be interested in. 

I would recommend building an excel/google spreadsheet for analyzing deals. I know Bigger Pockets has a deal analyzer and you are welcome to use it, but I personally use my own. Analyze 1-3 deals a day if not more, and keep track of the good ones you find. Eventually you will get familiar with this process, and will be able to quickly decide which deals you see are good ones. Investors want to know you can find the good deals hidden among the others, and that you can quickly act to get them the deal. I would recommend reading some books as well (I really like Brandon Turner's book "Rental Property Investing"), and I'm sure others here can recommend some other good ones.

If you are analyzing deals every day eventually you will come across some that you know are good deals. Send these deals to your investors along with the analysis you did so they can see it for themselves. I think that will go a long way with your investors if they can see how you came up with the data.

This is how I started out, and now I primarily work with Investors in my market. Keep up the hard work! You will learn by experience and it will become 2nd nature.

Hi @Tim L. Thanks for posting! I have a few thoughts on your situation.

I'm not a fan of extremes so instead of increasing the rent by $500, I recommend seeing what he is open to paying for an increase. If you can increase the rent by $200 or $300 this year and keep him in the house you can put off the makeready a little longer. I always figure rehabs are going to cost more than what you expect, and you should weigh that against the cost of the rents you would otherwise lose if you only increased the rent by $200 or so. Would you lose more on the rehab or in rents?  

If you do a 1031 exchange you would need to consider renting it with the Tenant or without. I expect Sellers to net more when their properties are vacant so the new Owners can occupy them. That being said you could still do both of these avenues. Increase the rent, and if you still feel bad about how your investment is going later on, you can always just sell. 

When are you looking to retire? I ask this question because it leads to another set of questions. Are you interested in building wealth right now? Or are you looking to retire and need cash flow?

I tell my clients who are trying to build wealth to invest in areas with high appreciation. Austin TX is a high appreciating market, but not much of a cash flow city anymore. Buy a property (or two) in an area like this and hold it for a few years. Build up your equity and when you are ready to start raking in the cash flow, 1031 your funds into a market with lower appreciation/purchase prices, and higher cash flow.

Good luck on your future endeavors!

Hi @Gail Greenberg thanks for posting. I'm a Realtor and Property Manager in the Austin TX area, and most of my investors have switched from buying in Austin to Killeen TX. Killeen checks many of the boxes you outlined, and is a lot more affordable than Austin. You can get a 4 plex for around the same price as a single family house in Austin, and I do have a Property Manager referral for that area. My PM company doesn't service that far north (we only go as far north as liberty hill), but I help investors buy there regularly. It's still a cash flowing market with decent appreciation.

Other nearby cities that my clients also are buying in are Copperas Cove, Harker Heights, Belton, Temple, and Fort Hood. 

According to Redfin's website the average cost of a single family home in Killeen currently is about $210K, and appreciation from January (year over year) is about 20%. You can definitely pick up houses for under $200k still, and there is less competition an in Austin. 

https://www.redfin.com/city/99...

You should definitely look into it. I'm happy to answer any questions you may have on the area.

Good luck in your future endeavors!

I would house hack for a few years to build some equity, and then use that equity to buy some properties out of state in a high appreciating market. No reason you can't do both given enough time and effort. House hacking is always a great way to get started, learn about investing/property management, and also still be able to physically affect your investment in a positive way. I'm a property manager for lots of out of state investors, and I know it works for a lot of people. 

Hi @Rohit Malhotra what part of Texas are you looking in? I own a PM company in Austin that charges $110/month, 60% Tenant placement fee, and $150 per Lease Renewal. Companies in Austin range anywhere from 7% to 12% per month depending on the company. Beware of Renters Warehouse. They charge a low monthly pm fee (I think around $100/month), but Tenant placement is %150 with them. Just my thoughts and experience on the topic.

Hi @Jared Smith I would try and see what kind of a rent increase they would accept. I would rather keep a good Tenant at below market rents, or renew them at the same rate if they won't accept an increase. If they were to move out you could raise the rent, but you will also be losing money due to the vacancy and also your makeready. Would you rather lose $100 per month in rent or pay for a makeready + vacancy? 

I'm in the Austin market and I see the same issue. You really have to buy the property at a deep discount to turn a profit on them. Unfortunately wholesalers in my area have driven the cost of deals so high that each deal now has almost no meat left on the bone. I would try looking for off market deals (maybe for sale by owners). Maybe try looking further out. Lots of my investors that were buying in Austin now have switched to buying in Killeen which is about a 1 hour drive from the city. Less competition out there and lower purchase prices. These are just my thoughts on the topic.

Just my thoughts on the situation. I would prefer the applicant with a longer Lease term. If you can hold off on a makeready for another year will you make or lose money compared to the extra rent you would get with the other Tenants? What's more expensive? 

That's how I try and approach these situations.