All Forum Posts by: Becca F.

@Amy Mitchell

Yes, I'm only looking for LTR. I may consider MTR since I could see travel nurses and professionals being a potential market. As far as STRs the subdivision I have my SFH in the Indianapolis area has banned any rentals of 30 days or less. Some cities are putting in restrictions with STRs. I view STRs as more like the hospitality industry and to me it seems like a lot of maintenance although your gross rents would higher than LTR. With my LTR, with proper tenant screening and a property manager, I rarely hear from my tenants, which is a good thing. I paid for a window repair 10 months ago and so far it's been low maintenance. If you find the right market with STR it would work.

@Amy Mitchell

I'm in California (Bay Area) and it's really difficult to buy here at these price points and cash flow positive (more like negative) now so I'm focusing out-of-state. I have a SFH in the Indianapolis metro area (suburb in class A neighborhood) but I bought it almost 10 years ago (used to live there). Depending on what county you're looking at, Hamilton County property tax rates are much higher for investors than primary home owners, 2.771% vs. 1.08%. I really like Carmel, Westfield, Noblesville and Fishers from an appreciation perspective, nice suburbs with good schools, but the prices are high now. My property taxes went up significantly which reduced my cash flow but my tenants are paying down my mortgage and I bought it for low price and low interest rate so I'm keeping the house

I'm looking in Indianapolis (Marion County) but I'm trying to narrow down the areas - I'm communicating with an investor friendly realtor. Being inside the 465 circle and the East side usually has lower priced homes than the West and North sides. I considered the Fountain Square area. I'm looking for SFH or duplexes (which seem to be rare), heavily leaning towards turn key or something with minor rehab (cosmetic work). I have a partial team in place for Indy: property manager, handyman, painter, roofing company in place, no contractor (yet). I'm also looking at Cincinnati.

@Saba Motakef

I'm in the San Francisco Bay Area and I'm also having a difficult time finding properties that meet the 1% rule. I have 2 properties here but I'm not buying in California anytime in the near future. Even 2 hours out of the Bay Area it's high $400,000 range.I looked at a house just east of S.F., listed for $649,000 sold for $680,000 back in late September - the realtor told me it had all cash offers, which is crazy. It's listed on Zillow Rents and the investor has lowered the rent twice from $3900 to now $3600 for 3 bedroom 1 bath. So this investor just put up $680,000 cash and the cost of the renovation and now is having trouble renting it out. If you put a larger down payment, aren't you tying up more cash? 

I have a SFH in Indiana that is meeting above the 1% rule but I bought it almost 10 years ago. I'm not using the 1% rule since I wouldn't find anything now. I'm looking mostly in the Midwest: Indianapolis area and Ohio. Memphis is a possibility. I'm looking in the $120,000 to $170,000 range (ready to move in). If I want to do a BRRRR I could find something under $100,000. I don't know that much about SoCal but I would recommend looking out of state. Good luck!

@Felix Piper

I have most of my investments in real estate but I have some stocks. I've thought to myself that I should diversify my portfolio but my real estate has held its value but my stocks and IRAs haven't in the past year. I agree with the above comments that buying stocks doesn't require as much planning and thought as REI.

The thing I like about REI is you can force appreciation by renovating a property, add an ADU, etc. Land is finite and property holds its value over time and it's a great way to pass on generational wealth to my kids. I can also pull out equity of my rentals to use them to buy more rentals by doing cash out refi or HELOC. The tax benefits of rental property are great - it reduces my taxable income a great deal, can't really do that with stocks. I'm paying taxes on every dollar of stock dividend.

You can do both - it's not one or the other. 

@Brice Perry

I did a cash out refi of a California rental property around Thanksgiving, conventional 30 year fixed, 6.5% (0.27% points). It was initially 6.75% but the lender had to adjust it so the monthly payment was a little lower, since my DTI ratio was getting up there, at 50% and they had to get it under 50%. I cashed out about 25% of the equity. They let me count the rental income even though the lease only started a few weeks before I applied for the loan. I worked with a mortgage broker. I talked to 5 lenders and received loan estimates from all of them - some of them were really terrible, one tried to charge me $23,000 worth of points to get the rate down to 5.625% on an investment property. I'm taking some of the money to finish renovations (landscaping) and the rest to put down on a future rental.

@Garrett Ayers

I did a refinance on a paid off California property to do renovations and have some extra cash left for a downpayment on a future rental. I'm not a big fan of HELOCs but I can see how some people like them, can draw money as needed. 

I'm not sure what your goals are but I'm buying out-of-state, mostly looking at SFH or duplexes (very few of these) in the Midwest and Tennessee. Florida Panhandle area is a possibility. The Midwest price points are much lower out-of-state and I can cash flow immediately. I'm looking at SFH from $120,000 to $230,000 (this being on the high side) that are ready to move in. I could buy 2 to 3 houses for the same price as buying one SFH out in the Central Valley with negative cash flow for now (vs. the Bay Area where I am).

If I go with a turnkey company, a tenant would be in place. If I buy something that needs work, I could find something for under $100,000. The one thing about California is historically it's appreciated a lot over the years so there are some investors still buying here. I have a SFH in Indiana. It went up significantly in value, about 70% from 2013 to 2019/2020 but percentage wise I think that's still lower than a Bay Area property in 6 to 7 years time. I'm trying to find that balance of cash flow and appreciation. Good luck!

@Clinton Bolton

I'm a beginning investor (3 properties) and reached that analysis paralysis stage of where should I buy and what (turnkey or a property that needs work). I attended one of Kris' free webinars and even got on a call with one of his reps. It's exactly how you described. The course/mentorship programs range from $18,000 to $35,000. They push heavily that buying with properties through them get you a 25% Return On Investment and on some of their properties they can get 34% ROI and that most people get 9 to 12% ROI investing on their own. The guy said to hold onto a rental for 3 to 5 years then if the ROI decreases they sell it and find a new market. This is when you split the profits 50/50 with Kris. That did not sit well with me at all, I'm putting 100% of my money into the purchase and I thought with rentals you hold onto a property longer than 3 to 5 years.

And I would also get access to their team of financial experts on how to build additional income streams such as franchising. The rep also pushed that anyone in the program would be invited to Kris' personal residence in Utah and talk to him in person in a real estate meet up. Very gimmicky. I told him $18,000 is a lot of money then he brings up the $10,000 mentorship program where I could buy one property with them. After listening to him talk for close to 45 minutes, I finally said that if I have an extra $18,000 to $35,000 wouldn't I just invest that in my own property and get all of the rental income and if I sold the property 100% of the proceeds, not 50% of it. 

As the others have commented, I would look into a U.S. real estate syndication. Good luck.

@Clinton Bolton

I'm a beginning investor (3 properties) and reached that analysis paralysis stage of where should I buy and what (turnkey or a property that needs work). I attended one of Kris' free webinars and even got on a call with one of his reps. It's exactly how you described. The course/mentorship programs range from $18,000 to $35,000. They push heavily that buying with properties through them get you a 25% Return On Investment and on some of their properties they can get 34% ROI and that most people get 9 to 12% ROI investing on their own. The guy said to hold onto a rental for 3 to 5 years then if the ROI decreases they sell it and find a new market. This is when you split the profits 50/50 with Kris. That did not sit well with me at all, I'm putting 100% of my money into the purchase and I thought with rentals you hold onto a property longer than 3 to 5 years.

And I would also get access to their team of financial experts on how to build additional income streams such as franchising. The rep also pushed that anyone in the program would be invited to Kris' personal residence in Utah and talk to him in person in a real estate meet up. Very gimmicky. I told him $18,000 is a lot of money then he brings up the $10,000 mentorship program where I could buy one property with them. After listening to him talk for close to 45 minutes, I finally said that if I have an extra $18,000 to $35,000 wouldn't I just invest that in my own property and get all of the rental income and if I sold the property 100% of the proceeds, not 50% of it. 

As the others have commented, I would look into a U.S. real estate syndication. Good luck.

@Briana Martin

I'm in the Bay Area. I think the Midwest is great for investing. The appreciation is slower than California but the price points are easier to get started in. I started out by renting out my Indiana SFH when I moved to California. I bought the house for just under $140,000 in 2013 (house was built in 2005). No renovations needed but I did put in a new HVAC and water heater about 2 years before I moved. It appraised at $247,000 in 2021 when I did a cash out refinance. To compare, a Bay Area house appreciated much more in 8 years especially with crazy sellers market. My cash flow is reduced since my property taxes increased (the county figured out I was renting it out and not living in it) but I'm keeping the house since I can't buy a house in a nice suburb surrounded by larger more expensive homes with a good school district for $140,000 anywhere in the Midwest now. I think it's important to look at other metrics besides immediate cash flow, which is a bit tough with higher prices and interest rates nationwide. Property management fees are usually 10% in Indiana (what I pay my PM) - I would not self manage an out of state rental.

I'm also looking at turnkey or buying a property that needs work. I just did a renovation here in California so the thought of doing another renovation out of state isn't appealing to me but a realtor told me that I would get the equity if I did a BRRRR instead of buying turnkey, where the turnkey company earns the equity. I've talked to a turnkey company that has rentals in Ohio and Michigan - she said the Detroit area (outside of downtown) is coming back but I probably wouldn't buy there. I'm taking my time to run the numbers - the strong contenders are Ohio (Cincinnati, Cleveland, Columbus), Indianapolis (I know the area well since I lived in that area), and Memphis. Sorry for the rambling but that was my 2 cents. Feel free to DM me.

@Edwin Lopez

I bought a condo as a primary residence with the intention of living in it for about 4 to 5 years then renting it out. It was in a good location for commuters, close to shops and restaurants and great walk score. This was going to be my method of acquiring more property in California. I just sold less it than 6 months ago. The HOA fee went up 3 times in the 2.5 years I lived there on top of special assessment to repair an old elevator (not replace it with a new elevator which probably would have cost more). I went to most of the HOA board meetings. There were constant complaints about how our HOA dues were going up and where the money was going along with security concerns with mail and package theft. I think residents were stealing other residents' packages or allowing their thief friends in the building.

I'm taking the little proceeds I got from the sale (almost like did a really bad flip that lasted 2 years since I did renovate the kitchen) and buying SFH or duplex in the Midwest for a future rental. I also feel that SFHs hold their value the most - I had realtors, wholesalers and investors calling/texting me constantly over the past 3 years asking to buy my SFHs in the Midwest and in California. No one had offers lined up asking to buy my condo. Good luck with your next purchase! And Happy New Year!