All Forum Posts by: Brendan Miller

@Jennifer Gardner congrats, that's an awesome position to be in! I just recently sold one of my luxury condo rentals around the same price. At minimum I'd recommend refinancing at a really low rate, and lock in long term financing at some of the lowest mortgage rates in history. I personally made the decision to sell our condo because it didn't cashflow well and the HOA fees were high ($640/m), and I didn't like that I wasn't getting loan paydown on that portion. We were right under 5 yrs of ownership, and we could use capital gains exclusion if we sold. Ultimately we sold at a really good time in the market, and now I'm looking to pick up some quadplexes with the proceeds as a downpayment. If it was me, I would sell; $2,290/m isn't a great return on $500K in equity. If you sold, you could look into doing a 1031 exchange to defer the capital gains, and use the ~$450K proceeds as a down payment on a MFH in the $1.5 - $1.8M range which at a decent CAP rate would bring you much better returns than what you're getting now.

@Andre O., it's definitely a great strategy for beginners to get started, it's called househacking and you'll hear it referred to quite often on BP podcasts and within the forums. I don't think it's quite a 9% return but still may be a no brainer if it covers your living expenses. For the 9% calculation, you're using 2700 which would be $900 for all 3 rooms. If you're going to be living in one, then you'll only be getting 1800 in rent, not 2700. As for other expenses, you'd need to account for vacancy, maintenance repairs, and CapEx expenses to find your true return %. Regardless of the return, I think this strategy is a no brainer for most new investors, especially if you're single and don't own a property currently. You're either paying rent to someone, or having others pay your mortgage for you - sounds like a no brainer to me!

@Ryan Fox, ok good! I was confused by the $2500 deductible part, I thought you were having to pay the deductible on your home insurance policy which didn't make sense to me. That is definitely a wild story, it's good to hear that no one was hurt. That'll definitely be one of most memorable landlord stories to tell, I can't imagine getting that call from a tenant!

@Ryan Fox was the driver insured, if so why isn't the claim being filed against the driver's insurance? 

@Eric Starks i don't use the BP rent estimator, it's always inaccurate whenever i've used it, but that's been about a year or so, it may have improved since then. I use Rentometer and normally use the average, and then drill down into the specific comps to make sure the comps match. For example, in my area there are seasonal rentals that sometimes throw off the averages, so i check for that kind of stuff

@Gavin Welch I'm also in Gilbert. I'd second @Daniella Lamis and @Justin Phillips comments. While I think Gilbert is a great long-term market, it sounds like you're basing your decision on appreciation over time. I would say that these last two years of appreciation are very abnormal. I would also question if the $125/m cashflow is really cashflow after you factor in PITI, maintenance, vacancy, CapEx, etc or if it's $125/m over PITI only. If you're OK with paying these additional expenses out of pocket to get in the rental game, then I'd say go for. You'll still be getting loan paydown and tax benefits over time. I personally couldn't justify paying 6% over list price on a rental that doesn't cashflow, but that's because that type of deal doesn't align with my goals

Also, I'd be happy to look at your underwriting numbers if you send them over. 

@Aldo Ornelas, yes I use Kevin Ramos, i'll PM you his contact info. He has his contractor's license and appraisal certification also so he would bring good value to an investor looking to flip SFHs in ABQ. He used to flip himself. 

@Ross Dailey I’m an ABQ investor (not I’m student housing) but from what I’ve heard there is a strong demand in student housing especially around the university. I think there is a decent market to cater to professions like yours with furnished short term rentals (several months at a time).

@Aldo Ornelas I am in the ABQ real estate market also. I'm in commercial construction, and new construction has it's risks, especially if you're acting as the developer in the deal. I think there is a lot more opportunity for putting your skills to use with flipping in ABQ until you get experience under your belt. There are a lot more older homes that could use updating, which would allow you to use your construction skills and enter the real estate game. If you're not familiar with the BRRRR strategy then research on Google or BP

@Rocco Garavuso I live in Gilbert which doesn’t really have small multi properties. Phoenix is definitely an option, however I’d carefully vet the location to make sure it aligns with your goals; if it’s below $400k then there is a reason for that (class C/D properties).

Other then that I’d look at Tempe, Mesa and even further east like Apache Junction. In Tempe you will find a big student housing crowd with ASU, and Mesa is a bit older but has good long term potential especially with more people coming to Phoenix metro area. The market is very competitive and saturated, I follow a lot of east valley MFH properties and am amazed when I see them go pending immediately for the list price. Real estate is only worth what other people are willing to pay for it, and right now those people are willing to pay a lot, even if it doesn’t cashflow! Good luck, feel free to reach out with specific questions