All Forum Posts by: Brandon Wagner

There is lots of good advice above.  It is tricky to know exactly what to do especially if you keep adding more and more opinions and ideas to the table.  In the end everything with a long enough time frame will be a good decision.  Just pick one and run with it.  Too many options will be distracting and stop you from making progress.  

Get the best place you can afford in a growing area with appreciation in rents and prices. (NOVA, DC, Montgomery County) Get as many bedrooms and baths as you can and find adequate parking for each tenant.  Save 3-6 months of reserves, put the rest down on the property, rent out as much as you're comfortable with, and in 5 or 6 years you'll look back and be amazed at your progress instead of regretting not moving forward on your goals.

Option 1:  Numbers I keep seeing these days are about 35% to 40% down to get positive cashflow. For most investors that isn't feasible, but if you can do it that'll work.

Option 2: and my personal recommendation would be to try to get a little bit larger of a home as a primary residence. Townhome, or single family.  If you have to go further out from the DC area if you need lower price points.  You can house hack and rent out other rooms to others.  The goal is to find a property where after tenants are paying you some money you get your portion of the mortgage less than what you would be paying to rent the same place.  

Condo's generally don't appreciate as well as townhomes and single families, and often the HOA, taxes and insurance dues increase as much as rents so your cashflow doesn't end up a lot better over time either.

Option 3: you wait on the sidelines for rates to come down or prices to drop.  But you don't have any control over those matters personally so who knows what will happen.  Also, prices would have to drop 50% or so or rates would have to drop by 4% or so in order for cashflow to appear in the area again.  Neither of those sound very likely to me. Also if either of these happen the market will get much more competitive again.

Recently I have been seeing a lot of negative posts about how there isn't a way to invest in real estate in the current 2023 environment. (High prices and even higher interest rates) I am here to present an option to help the Real estate investing community.

Unfortunately the strategy isn't available to everyone, only Veterans, but hey they served our country and deserve some special treatment. (Yes I know you can assume a VA loan without being a veteran, but that is a needle in a haystack opportunity and far less common to find because most veterans aren't willing to keep the VA Loan entitlement in there name, they want to transfer it to the new buyer.)

In my market of Northern Virginia, I am seeing an increasing number of agents offering, their seller clients, Assumable VA loan at 2%-4% interest rates.

If you're a veteran take advantage of this opportunity to "travel back in time" to when rates were below 4% and lock up a great deal!

Are others seeing the same opportunity in your market or taking advantage of it already?

I am seeing similar trends in my Northern Virginia market as well.  First time home buyer, homes (condo's and townhouses) are still appreciating greatly.  Larger 4+ Bedroom Single family homes are not.  Those move up buyers just aren't selling, unless they really have to.

Only slight criticism is that most people in the downsizing camp should have lots of equity in their home from paying it off over the years, and all of the appreciation of the last decade.  They should be able to sell there house and buy a smaller one essentially in all cash, or with a very small loan that the interest rates don't matter as much.  There are of course some that have purchased their home in the last couple years where it doesn't make sense to sell but I'd consider that a small percentage overall.  

Check meetup.com for real estate investment groups in your area.  Go out and try them out and meet others who have similar goals.  Learn and grow with them.  

Analyze some deals in your current market and see if anything makes sense to buy.

Obviously you found BP. That's the best resource I know of. Listen to the podcasts, read the books, etc. You'll absorb a lot of information that way.  If you like books, check out their bookstore. Don't have to buy from BP, but they have curated a great list of books to read depending on what you're interested in.

If you haven't purchased a primary house for yourself in your new location, I'd do that first.  If you're comfortable house hacking, rent out as much of that house as possible.  Then when you get new orders/move you can rent it out.  

Best of luck!

I would debate some of the advice above. In my opinion for a first house purchase Conventional loan, is a much better option than FHA.

Conventional is 3% down vs 3.5% (win)

FHA charges an additional 1.75% fee that is worked into your mortgage that conventional mortgages don't charge. (win)

FHA loans don't remove PMI automatically when you reach 20% ownership in your property, but Conventional loans do. (win)

To me the only time FHA is better than conventional is when buying a duplex, triplex, or quadplex. (loss)

(Of course always have a lender review all of your loan product options and pick the one that is best for your needs when you are at the point of purchasing a real property)

Keep in mind you'll also need about 3% for "closing costs" so all in you need at least 6% of the purchase price as a rule of thumb to get started. I encourage you to save as much as you can, as quick as you can to shorten your timeline.  

Like others, I highly recommend the house hacking strategy as well. It is the best way to get started.  Sacrifice some comfort now, for more comfort later.

Akash, 

Happy to help you run numbers as well.  

If you are going to include Property management in your numbers, it's going to be awfully difficult to get the 15% COC you're looking for unless you have a truly unique/special property. There are a lot of STR's in that area, that aren't producing those numbers at least at todays interest rates. Without the PM fees you have a much better chance.

I always liked the thought of try to manage it yourself when you start out.  It will teach you a lot of valuable skills and you will learn much quicker when you are involved more in your business.  If you find out that you aren't good at it, or it is too much effort, then you can always pivot to a manager after that.  

Just make sure when you run your numbers it still works with the property management fee. In the STR space you're looking closer to 15%-20% of gross rents for that figure.

You will of course need a few people that are local to help you with the "you have to go to the property to resolve an issue items." I can't imagine driving 3 hours to and from will be worth it if they are having trouble with something simple at the property. Try to find some want to be investors in the area that have a good work ethic. You can trade them some experience, knowledge, or money of your STR for their help with simple boots on the ground tasks.

Just another way of looking at this here.  I'm not sure of the availability of deals in that area, but for my area in NOVA it is very difficult. 

300K is what it's worth to someone as a typical condo purchase.  You're situation is a little different.  

If you're truly able to get $500-$800 a month in cashflow from this buying it and holding it in the long run, you'll look back and think, I should have just locked it up.  I'd encourage you to still move forward, even if you are overpaying slightly.   In 1 year making 3% appreciation you'll have earned 9K from this 300K condo. If just thinking cashflow, you'll get that $3,600 back in 6ish months.  This still sounds like a great deal to me, with or without the extra panel upgrade.

If deals are super common in the area, and this really is a deal breaker for you, just move on to the next one.  

Welcome to the BP community Bobbi.

Feel free to add me to your list.  

I work primarily with investors and speak their language.  I also house hack myself.  Our team has just about any service you could need in the investor world. Property management, construction, brokerage, wholesalers, etc.