All Forum Posts by: Canesha Edwards

@Jay Patel

Hey Jay-

Thanks exciting. I have a few follow- up questions. How old is the property and where is the property located?

The age of the property will determine how much maintenance cost you will have. Always underwrite maintenance cost. Something will go wrong with tenants. Also, when do the leases expire? You could have turnover cost sooner than you think.

My concern about rural areas is the tenant population. How do you know there is always a wait list for the property? Have you verified there’s a wait list or are you just taking the seller’s word?

I always suggest underwriting a deal taking all expenses into consideration going in. Once you start operating the property, you can make adjustments .

The returns are good without accounting for vacancy and maintenance. See how the numbers work out by adding these expenses.

Best,

Canesha

@Kyle Buenaventura

I’m in the Atlanta market.

@Jenai Faulk

Have you considered the 203k loan? If you're looking at homes that need work, the loan might be a better option. It's still an FHA loan, but it allows for the financing of the home purchase and rehab.

If you’re not necessarily looking to rehab a property, could you possibly put more down to lower the monthly payment?

Best,

Canesha

@Kyle Buenaventura

Yes, I factor in these type of cost. I would be willing to pay a higher price for a piece of land that is already cleared v. a wooded parcel.

Best,

Canesha

@Dominique Mickles

Go talk to the Building department. You will have to apply for the permit. Most cities have the application on their website.

Canesha

@Sierra Johnson

Here is my 2 cents.

I feel the recession has already started but is being delayed by all the assistance that was floating around. Wages have been stagnant for how long? Inflation is through the roof, gas prices are rising, the stock market is seeing more red days than green. Not to mention the large amount of house hold debt and national debt. I’m just wondering what’s going to be the final straw to break the economy.

In terms of real estate…. The 2008 crisis affected the individual home buyer. This next crisis will affect the investors and institutional buyers.

The last five years we’ve seen a number “home buying companies “. Opendoor, offerpad, home partners, Zillow homes, divvy…, you get my point. Now, these institutional buyers have spent billions buying homes within the last few years. They are buying these homes at market value, throwing new paint on the walls and re-listing the homes at a higher price. The strategy only works if the market keeps appreciating, which it has, but it won’t forever. I foresee a lot of these companies getting stuck with inventory once the market cools off and they will eventually have to sell off at a loss. People like to say that the housing market won’t see a significant price decrease, I think otherwise. The market is very inflated right now. When things cool off and the institutional buyers stop purchasing homes at this rapid rate, prices will start to normalize.

No one has a crystal ball, but history and present day events are pointing more towards a down turn in my opinion.

Just my 2 Cents.

Canesha

@Mike Lettko

Hey Mike-

Here’s my 2 cents.

If your current home is under contract, how long do you have to decide whether you want to sell or not?

Secondly, if you’re looking to break into real estate investment, consider this strategy.

Since your current property has so much equity, why not refinance? I would see if a lender would refi the property at 65-75% of the appraised value (which I’m assuming to be $350k). I like to leave a decent amount of equity on the table as a buffer should the market take a downward turn. Take the proceeds from the refi and roll that into your next property and rent the current property. I would reach out to a lender to get a general idea of what the new monthly payment would be after refi so you can analyze the potential of your current property as a rental.

Hope this helps.

Best,

Canesha

@Tyler Dalton

Hey Tyler-

Here’s my suggestion. I would try to find out if the owner is actually deceased or if he just doesn’t want to be found.

Start by calling the probate office of the county where the property is located and see if there was any information filed in terms of probate. However, if the owner was living in another location when he died, that county will have the records.

Next, you’re going to have to skip trace the owner. You can purchase software to do this task or you can hire someone from Fiverr or Upwork to do the work for you. It’s also a good idea to get out in the neighborhood and talk to neighbors, sometimes they are the best sources of information.

Skip tracking can be tedious but it can also yield great results.

I hope this helps.

Best,

Canesha

@John Chambers

Hey John-

You’re in a very unique situation. If I may offer my two cents.

If you take the $600k appraisal and cash out everything, this is taking the highest risk in my opinion. However, high risk sometimes equals high reward. What is your plan for the additional money? What’s the opportunity cost here? If the money will be rolled into another deal, it might be worth the risk. If you don’t necessarily have a plan for the money, give it more thought before making a move. Parking the money in a bank account is the worse option.

Risk to consider:

- Negative Cash flow. Are you financially able to cover the cash flow short fall every month?

- potential to be upside in your mortgage. The concern here is not being able to refinance later at a higher price. Say the market tanks and the house in only worth $500k, you’re stuck paying the mortgage on a $600k note. Not very appealing.

On a more conservative note…. You could only refi at the realistic value, limiting your downside risk. If the market keeps rising then you can look to refi again in a year, but if we run into a downturn, you’ll sleep a little better at night. If you truly know the appraisal price is inflated…. Air on the side of caution when making your decision.

Just my 2 cents.

Canesha

@Adam Lowe

You should manage your first property in my opinion. You get a feel for dealing with tenants, the process of leasing and turning units. This is invaluable experience. A lot of investors get ripped off when it comes to property management. Learn the ropes first. When you have more units in your portfolio, then you can consider outsourcing the management.