All Forum Posts by: Anna Swartz-Lopez

It depends on your investment strategy and your exit plan. Circumstances have certainly made it more difficult to make a good investment, and personally I would not be flipping right now, but if your strategy is more long term, you may find that now is a good time to invest. I think that as COVID drags on and landlords become increasingly frustrated, that many current owners will be looking to sell. If you are in the right position, and you are willing to deal with the increased tenant issues because you are looking at the long term, now may be the perfect time to invest. It all comes down to the circumstances of the deal, and what the investor is willing to put up with. 

Hi Jameson, first of all, Congrats on your second, that's on the way! Exciting times for you and your family! 

An important thing to think about here is the difference in the types of debt. A rental property is bringing passive income, and once you sell that, even though you no longer have the student debt, you also no longer have the passive income. Another approach may be to refinance and pull cash out of the rental property. If you can pull out that equity and use it to pay off your debt while still holding on to the property, that may serve you better in the long run. 

Hi Kyle, yes, anything with 5 or more units is multifamily, so an apartment complex, but you can have a large, medium, or small apartment complex too. It's just the dividing line between "residential" and "commercial" is 5 units. 

Kole, anything under 5 units is classified as "single family," and anything 5 units or larger is "multi-family." So a duplex or even a four plex is still technically "single family." It's great if you can go big right off the bat, but don't be afraid to start small either. Buy the biggest property that you can afford. Your income from your W2 job will have to support your mortgage. It used to be that you could count the income from renting rooms in your home to qualify for a traditional mortgage, but those days are gone. 

If there is a separate unit, like a duplex, that income can be used to support the mortgage, but if you buy a house and rent out rooms, that income will not count. 

You are on the right track, just start the process and let your portfolio build organically. 

Everything depends on the specifics of the deal. Do your homework, and if the numbers work, then yes, now is a great time to buy. I would just say that part of your due diligence needs to be include doing some homework on local rent forbearance and eviction laws because of COVID. 

Good for you for mapping out your steps! As the saying goes, one minute of planning can save ten minutes of execution. 

Step one is to make your first purchase. As the saying goes, don't let the "perfect" be the enemy of the "good". There are a lot of layers to being a sophisticated investor, and you will get there, but everybody has to start somewhere. Don't be intimidated to just go purchase a property and rent it out. This website has a lot of encouragement and resources for newbies, and helps you map your path forward. 

A good CPA is important, but comes after your transaction. A good real estate attorney is important before the transaction, so that when you find a property, your attorney can help you set up an entity to hold the property. You never want to hold investment property in your own name. Mark J Kohler is an attorney and a CPA, and his law firm and his accounting firm have real estate investor clients all around the country. Even if you just read his blogs and watch his Youtube videos, there is a lot of good info there. 

A realtor may or may not give you leads on good deals. You might want to develop a strategy, like networking with probate attorneys via your local Rotary Club or BNI, in order to get access to properties from a deceased person's estate. Or you can focus on foreclosures, or use some other strategy. A strategy or system can help you stay focused. Remember, if it's obviously a great deal, there will be six other people in line before you. Here again, as you start down this path, it's ok to have a "good" deal, and not a "great" deal. I know plenty of sophisticated investors who look back at their first deal and say, "I had no idea what I was doing." 

Yes, rates on investment properties are higher than rates on home mortgages. And because of COVID, they have gone up even more. You will need a specialized lender for this, your local home mortgage broker won't do investment properties. I have a lot of resources for investors in this regard, as do others here on BiggerPockets. 

If you are just looking for a property to hold long term and rent out, you should expect to bring about 20% down payment, plus interest and cash reserves. That is under normal conditions, right now because of COVID, estimate more like a 30% down payment. That will get you the best terms from a lender, especially since you are a newbie. I'm estimating high, because bringing more cash to the table always helps the lender feel more confident in your deal. If you have strong credit, that will help too. 

If you want to go the fix and flip route, there are lenders that will fund your rehab, as well as your purchase of the property. That is a more involved process though, and you will need a good contractor. 

I hope this gives you some help, and best wishes to you in your new ventures! 

I have heard this piece of advice as well, and it makes sense, except for the fact that I live in one of the highest cost areas of the nation, the San Francisco Bay Area. I think the reason why "invest close when you start" is the rule of thumb is because it is easier for you to adapt to the unexpected, especially as you are learning. 

If you are going to invest out of state as a beginner, my recommendation would be to not do so ON YOUR OWN. Try to work with an established investor that has operations going out of state. www.Betterturnkey.com is a great resource, for example. 

Why are you planning on selling the property in three years when you move on to your next assignment? Why not keep the property and use a property manager? 

I live in the Bay Area, and the price of housing has started to rise again here as we begin to come out of COVID. Demand is always high in this area, and I really don't see that changing anytime soon, so I don't see a crash coming. However, people are always moving out of the Bay Area because it's so expensive, and with the undergoing shift to more remote work, some people are keeping their high income jobs and moving to lower cost areas. Things will doubtless adjust somewhat, but people like living here, and I think will always want to buy here. 

Considering how easy it is to get a pet certified as an "emotional support animal," I think it is better for a landlord to allow pets and put rules in place. Get in front of the pet question, rather than playing catch up when a tenant shows you a document that will force you to allow their pet on your property. 

If you as a landlord allow pets, you can collect a deposit for pet damage, and you can usually charge an additional amount per month. You can also exclude certain breeds. It's always better to stay in front of the situation, rather than try to play catch up later.