All Forum Posts by: Alex SImon

@Derrick Webb

I don't think you're going to get very far looking for only zero money down types of situations. But for *very low* money down you can get an AHA loan with only a 3% down payment. I would then aim for a duplex or other multi-unit house that would let you live in part of it and rent out the rest to cover your mortgage payment each month. That's called house-hacking, and it's a great way to get started with REI.

@Neil Patrick

I wouldn't be thinking about the state as much as the individual city.  However, states do provide basic ideas of where to start or at least where to steer clear of.  Personally I've gotten started in Philly, but you might have some really good luck with the flyover states like Ohio or Iowa.  There are a few turnkey providers that are worth working with in most of the good markets, and there are some larger multi-market investment groups that act as brokers for turnkey providers.  I won't name names because the moderators seem rather upset about that behavior.

Basically you'll want to stay away from any market that springs to mind right away as a place people dream of living.  That dream inflates the housing prices.  Your best bet is usually someplace that nobody thinks of, but has a thriving economy nonetheless.

Well Jamahl, welcome to BP.  As a fellow Floridian (we're all transplants to some degree lol), the best advice I could give you is to watch out for the Florida market.  Profits can be made, but you have to deal with some pretty bloated property values and taxes/insurance that can eat up your cash really quick.  I don't know how it'll affect your fix and flip plans, but it makes buy and hold strategies pretty difficult.

I know that it sucks to hear someone doomsaying right off the bat, but I have to point this out to you because everyone, from the brokers to the realtors to the gurus and whoever, will all lie to your face and tell you a deal is good when it's really suffering from Florida Syndrome (bloated costs and diminished returns).  Be sure you do your own math and run your own numbers to make sure a deal is right for you.

Hey guys, I thought I'd come back and update this thread with what I found out. It turns out that these condos are an absolute pitfall. Like, seriously, don't go there. Maybe there's a mountain somewhere that will let you make good returns, but the one I was looking at (Snowshoe, WV) was a terrible idea, it just took some coaxing to get all the hidden costs out in the open. The HOA fees are horrendous, and then there are little nickel and dime fees everywhere and special assessments every year that amount to a "mountain tax". You also have to deal with elevated property management costs (25% in this case!!!) and a whole host of other garbage. The studio condos that sold for $35k ended up $3k in the negative every year, and that's before you factor in the mortgage. It's that bad. The nicer units only mitigated the loss, they didn't actually make the unit profitable. The only units that turned any kind of a profit were the $200k super luxury ones, and those didn't make enough to justify the money out of pocket.

Long story short, these sort of condos are no better for your cashflow than normal condos, and for the most part they're worse.  If I want a ski condo, I'll rent one for the weekend!

I reserved a property from their latest webinar in Philly, actually the largest of their SFH offerings. Kind of wishing I'd picked up a second one, because the whole process has gone incredibly smooth and this is still only my first deal. So far from what I've seen, both the Maverick crew and the local turnkey providers they work with are very helpful and responsive. From all my phone calls, it also seems like they have a lot of experience dealing with newbies and enough patience to help walk them through the steps. So right now I guess I'm sitting and waiting for the rehab to get done and then some more fun will begin. I'll try to remember to post more about the deal's progress as we go on. If everything goes smoothly with this property, I'll definitely be picking up two or three more from their next webinar promotion.

Looks like I've been neglecting this discussion a bit!  I'm not quite started yet with OCF.  Had a great opportunity come up and I picked up a property that should perform very well.  But in the next couple months I'll be looking very hard at an OCF property.  I look forward to hearing some details down the line, so dont disappoint, Chris!

Had to call off the offer.  More and more expenses kept cropping up the more you looked at the property.  For example, lawn care was not, as was previously implied, up to the tenants per the current lease.  So that was going to knock at least $80-150 off the monthly net income.  So that alone made the already marginal initial profits too scarce to count on.  I couldn't base the entirety of the deal off the speculation about the potential rents, so I had to pull the plug.  Maybe someone will come along who lives nearby and wants to self-manage and spend their weekends mowing the lawn.  But for a guy deployed overseas?  Not an option.

Oh well, on to the next deal. I may just start loading up on REIT shares since finding the perfect property for my situation is extremely time consuming. At least my money will be working for me in the mean time until I find the right property.

@Bob

Yes, you're asking questions that need answers.  But rather than try to explain anything to a self-professed newbie or help in any way, you just come out swinging with the Caps Lock doing your best to make me feel like an idiot, which is kind of a jerk thing to do.  So, thanks.  I am an idiot.  We can all sleep well at night knowing that the newbie has been properly chastised for not knowing something.

Now that we've established that, at great length, can you explain why it's *so* terrible to try and get this property for lower than the asking price? I didn't think investors were generally in the habit of trying to buy a property at a mark-up. Maybe I've grossly misunderstood something. It wouldn't be the first time. But as for why I'm interested in this property? The numbers on paper come out in the positive by about $200 even at the start when the rents are a bit low. *Why* is it so horrible that the gross annual rents come out to a quarter of my optimal buying price? Is it supposed to be less? Is it supposed to be more? You've implied both of those extremes and now I have no idea what you're even asking anymore. These are things I haven't seen on any of the articles, podcasts, webinars, or blogs that I've read/watched/heard/absorbed while researching REI. I'd love to know all this stuff, but I haven't seen anyone talking about it yet.

Why do I think it's a good deal?  Because I ran the numbers according to articles like this one:

http://www.biggerpockets.com/renewsblog/2013/01/19...

Is that wrong?  Is it right?  Have I been following some outdated or outmoded model of how to figure out the cashflow numbers?  These are all serious questions because I obviously don't know what's what.

@Laurie Davison (tags not working)

Sure, that would be great.  I'd love to have any help you can offer, even if it's just in a general sense since you're from outside the area.  

@Bob Bowling 

I'm basing my assessment of the market rents off of what similarly sized (or even smaller) properties rent for in that area.  It's a rough estimate for sure, but it's clear that this home's rent isn't as high as it could be.  Also, you're kind of a jerk.  You know, FYI.

Well, as always, I seem to be making an idiot of myself.  If you need me I'll just be over here with an ice pack pressed to my junk.