All Forum Posts by: Cassi Justiz

Hey @Thalia Higuera, I'd be happy to chat with you! Feel free to send a message or reach out! 

I also second checking out your local meetups! InvestHer is one of my favorite meetups. I run the OKC chapter and it's always a good time! If there's a local chapter in San Franscisco, it would be a great place to get connected with other investors. 

Honestly, I love new construction. I have sold several new builds to investors and purchased a new build as my personal home as well. 
If I had the cash to make the numbers work, I would love to have all of my rentals be newer construction homes. In our market, builders are offering some great incentives like paying all closing costs and they've even done a few price drops. 

Something to keep in mind is your maintenance and cap-ex plans. Theoretically, in a new build you shouldn't have to replace any systems for the first 5-10 years (minimum). In this market, renovation costs have gone up like crazy too and contractors as just as busy as ever. 

You'll almost always get a better return if you can buy a distressed house, renovate it and pull your cash back out. It's really a give and take on what your goals are.  For a true "passive" rental,  a new build is about as hands off as you can get.  

I think it's still a great time to get into the market and properties are likely not going to get cheaper in most areas. As entry level price points get pushed up, cash flowing rentals will be more difficult to come by. 

Here are a few things to think about: 

How are you planning to finance the property? If you are taking out a mortgage and the property doesn't cashflow, this could hurt your debt to income ratio down the road if you plan to buy additional properties. With investment rates easily over 8%, you may need to plan to put down a large down payment to cashflow with a mortgage. 

Condo HOAs aren't the worst, but they can be unpredictable. I'm talking to a seller right now that has seen his condo HOA fees double over the last 3 years without any improvements or new amenities. They were $200/month when he purchased the condo in 2021 and they are set to increase to $500/month this summer. We've also seen several condo boards recently decide to push anti-landlord policies requiring a lot of red tape to rent out properties. Unless you can get a condo with strong enough margins to make up for possible HOA shenanigans, I wouldn't want a condo in this environment.

Are you 100% sold on the Colorado and AZ markets? There are many markets where you can buy a new construction home for less than $300k. Just as an example, I'm based in the OKC market. Our average sales price for a single family home is around $270k. You can pick up a basic builder grade 3/2/2 1200 sq ft new construction home for just over $210k and rent it out for $1400-$1500+/month.

I think it's worth expanding your search if you aren't finding deals that make sense in your market. Between face time and weekend trips, you can invest out of state pretty easily with today's technology. 

Ultimately, look at your long term goals and decide what makes sense for you! 

I really like that plan. I bought a new construction home in 2022 (locked in pricing in 2021) and have seen significant appreciation since then. HOWEVER, that's certainly not the norm. We had a lot of unique scenarios leading up to those conditions. I've been really happy with our home and neighborhood. If and when the time comes to rent it out, it could make an awesome rental property too. 

I agree with your analysis that Choctaw and Harrah will probably have more growth than Shawnee. Shawnee is growing, but it's definitely a different market. With Choctaw and Harrah being closer to the city, they are typically going to have a larger renter pool than the Shawnee market. 

I think new construction can be a great option depending on your goals. With a plan to live in it for a while and then do a long term hold, you're definitely in a good position to buy new construction. Several of the builders are partnering with local lenders to do some decent incentives like rate buy downs or paying all closing costs. 

I know that Home Creations is building in Choctaw and I believe Rausch Coleman has a development in Harrah. Ideal Homes has developments in both areas. Home Creations and Ideal will both start closer to the top of your price point, but Rausch Coleman should have decent options sub 275k. 

It would definitely be worth meeting with a few builder reps and have them run some numbers for you. The incentives for new builds are better now than I've seen in years, it just will depend on whether it makes sense for you and your financial situation.

Feel free to send me a message if you need builder rep contacts or would like more info on any of these builders. 

If the property is already tenant occupied with Section 8 tenants, make sure you do a full home inspection. Sometimes people skip inspections if there are tenants in place. Don't do this. 

Section 8 offices all operate differently. In my market, we have 2 different offices that cover different areas. Once is MUCH easier to work with than the other. However, they are both operating on a huge backlog and can take weeks to get the property inspected from the time you approve a tenant. As you start narrowing down a market, I would definitely ask around for the Section 8 experiences of investors in that market. I would also want to find a few property managers that are comfortable managing Section 8 properties and going through those inspections. The operations of the individual Section 8 offices can definitely make an impact on your experience with Section 8 investing. 

I wouldn't be as worried about your agent not being licensed as I would be about them being inexperienced in the area that you are looking for. The state real estate commission is the one overseeing the licensure, so you can always call them to verify license and make sure the agent does not have any disciplinary action against them. If their license is active online, then you're probably good on that end. 

To vet an agent to buy investment property, a great test is to ask them for rental comps. Many agents (and some property managers!) don't even know where to start with rental comps. If your agent can provide you with solid rental comps, that's a good start. Ask them about cash on cash return, cashflow numbers, etc. You want to be able to run your own numbers, but you also want an agent that understands what you are talking about when you say you are looking for a specific cash on cash return or 1% rule deal. 

I would also ask them specific questions about the leasing process, eviction process, average property management fees, etc. If they are working with investors and familiar with investment properties, they should easily be able to answer any of these questions for you. 

Good luck! 

This is really going to depend on the state you are looking to do business in. The entity may or may not matter. I wouldn't imaging the state where the entity is registered makes a big difference for most buying and selling purposes as long as you can provide all of the required documents for title purposes. However, many states now require some version of a license to wholesale, so I'd identify a market first and then dig into their specific wholesaler requirements. 

I know in some college towns, landlords will charge by the room rather than per unit. So if you could find a group of tenants and all put it through as one lease, you could potentially rent out both units for a premium amount through one lease.
It could also be appealing to a buyer looking for multigenerational living, but I would imagine that would be a smaller buyer pool. 

I've done this several times. I collect a full month's rent up front and then add an account credit to be applied to the next month's rent. Most people are pretty understanding as long as you explain everything up front. 

Since you will be living in the home, you'll also want to consider the lifestyle that you want. It looks like you've already started working on that idea, but I'd keep digging into it a little more. Another good option for you would be to figure out what price point you'll be in and what those houses and neighborhoods actually look like. Take a few weekends to go explore the top 2 or 3 options that you're leaning towards and see how you feel about the areas. I responded to someone else a few days ago asking a similar question, so I'll share what I shared with them.

Look for areas with population and job growth, new industries, decent price/rent ratios and affordable starter homes. You'll also want to explore what the landlord/tenants laws look like. Find out what the average property taxes are and look at how much they've increased over the last 3-5 years. There are tons of "best places to invest" lists that can at least give you an idea of where to start your searches.

I'd also try to define a few factors that you specifically care about. These are things that I've heard from different people.

-Proximity to a 4 year university

-Public transportation availability

-Direct flight availability from home airport

-Proximity to military base

If I were starting from a blank slate, I'd look up the top 20ish metros that are gaining population. Find out average home prices and average rent prices in each metro and start filtering through that way. As you see some areas have better ratios than than others, you can dig into those metro areas a little further.