All Forum Posts by: Neil Schoepp

@Luke O'Connor

Congrats is this your first purchase. House hacking is a great way to get into a property just be careful during tenant selection. You essentially will be living with this person.

If I were renting I would prefer the ground floor. Much easier for moving furniture in and out, groceries, emergencies, etc.

By you taking the upstairs it also broadens the tenant base you can draw from. The stairs may exclude some one with a limp, or an older couple that just don't do stairs anymore.  And if you end up renting to a family with a toddler you won't hear all the running and jumping kids just naturally do.

@Steve Yoo

You have two Values to look at. 

What is the bare land worth if you tore down the bldg. If the land is worth more than the 260 you just got the building for free. 

How much would it cost to build a new bldg on the site. If your buying under replacement cost then this also may be a good deal.

That's how I would value a non performing piece of property. 

Remember that when you buy you are not buying a property, per say. What your buying is the income stream that property is producing. 

With all that being said if this turns into a deal for you I would consider bringing in a more seasoned investor that has done this before. You will learn a lot and foster a new relationship.

Please remember that the value of this property IS NOT based on what it might rent for after all the work is done. Yes this is important information you will need to know but it does NOT affect the sales price.

Lastly look at what the highest and best use would be. Don't get stuck on its multifamily so it must stay multi family. 

@Mark Graffagnino 

Yep it's gonna be a bit more than my example.

When I see something like this in which I am trying to come up with a ballpark I break it down into steps.

1. Deconstruct the deck  1/2 day

2. Deconstruct the pool 1 day

3. Carry it all out to the dumpster 1/2 day

So, I would budget for three days, four if you want to be conservative. Four would be my number as if it takes 3 the "saved" money will just be spent somewhere else like electrical or plumbing. This demo is straight forward and shouldn't have to many surprises.

Curious, what's you plan for the drop off you will have after the pool is down.

@Hiral Lai

Welcome aboard. Assuming you have your area and are now narrowing it down to a neighborhood. I would look at the following.

Crimes stats

School districts and if the district is more than one elementary school then which school is better than the other.

Here in my area there are 3 elementary schools each school has its own individual reputation. So be aware that just because your in a great school district doesn't mean all schools in that district are great.

Besides that start thinking like a tenant. How far from the hwy are you, how close is the grocery store, mall, park, public transportation, laundry mat, etc.

Drive the neighborhoods your considering. Would you feel safe at 8pm in January? Would the wife and kids feel safe if they had to stop by for some reason? 

Are the lawns mowed, yards in good order? Do you get a feeling that the people already here take pride in their homes? Derelict autos in driveways, graffiti, trash or just a dirty feeling. Are there people hanging out at all hours of the night or is it relatively calm and peaceful. Is the a town park? Is it in good order?

This is a start I'm sure others will chime in with how they go about it.

@Mark Graffagnino

I just had a 24' round installed and it took them 8 hrs. They were not hustling and it was a hot day, even by my standards and I love the heat. They got paid by the job so it didn't matter to me. Anyway I would budget two guys at 6hrs if your keeping it and 4hrs if it's finding its way to the dumpster. There's really not much to it. It took my guys about half that time (the 8hrs) to prep and unpack everything. 

The 6 and 4 hrs are conservative numbers. It would think it would be less but it's always better to build in that Ah f@@k Factor. 

Welcome aboard @David Santore

This is house hacking. 

You need to look at the numbers and make sure that when you move out and put a tenant in "your" half that it will cashflow.  If it will not then you force yourself into selling when you decide to move on, and if you can't sell for whatever reason then your stuck. So just make sure you give your exit strategy it's due.

Rental payments aren't necessarily tied to the mortgage. They are tied to all your expenses plus your reserves. Your expenses are your debt service (mortgage), taxes, insurance, property management, utilities (heat, electric, trash, water/sewer) some duplexes already come with separate utilities for each unit. This type is better especially down the road when you move and rent out the whole building. 

Make sure you have reserves for when the water heater goes or the roof starts leaking. 

This house hacking is done all the time you'll do fine just read up a bit and ask more questions as you come across certain concepts. 

Oh my last thought is don't just focus on duplexes, in your search you may come across a Tri or quad. It's still the same concept. 

@Nigel Dollentas

HELL YES!  

Start with education.

Read a few forum post a day.

Go to the top and click on the education tab then systematically start reading each sub tab.

Start looking to pick up some work with any of the following: CPAs office, attorney that works with real estate, title insurance company or my personal favorite a property management company. Maybe some work with a contractor. Couny clerks office is an option also, like the recorder of deeds.

Most high schools have a work study program so you may be able to talk with a guidence counselor and get to leave school early to go to work. Imagine that learning about real estate while getting paid AND earning school credit talk about hitting the trifecta.  

Public library could be another good source. 

And when you just want to sit and chill, listen to a podcasts. They are up top under the education tab. Each podcast gives book recommendations at the end. 

Above all else never be afraid to ask for help or post questions when you come across something you don't quite get. The answer to your problem is just a question away. 

@Kyle Lane

It is said to follow the jobs. Job growth brings population growth which brings supporting jobs and tenants. If you can get pass the guru stuff Lindahls book Emerging Markets gives some good points. But I really like  @Brian Burke suggestion to identify a market that is early enough in the process........

Brian, can you offer any suggestions as to how to tell that a market is early enough in the process where prices have a lot of runway left. I fear that due to lack of experience I may think a market is early enough only to find out its late. How can one tell which it is?

@Jenny Keffer

Re-read Brandons ultimate guide to screening tenants

You set minumum income levels why not credit score limits.

Remember that you cannot turn someone away because they are divorced and a single mother. I'm not suggesting that you would just reminding you that, that can't be even part of your reason or thinking if called on the carpet about why you turned her away, if indeed you do.

Her income DOES NOT meet the minimum if it cannot be verified. 

You actually donot need any advice. You already know what to do. That tingling feeling your feeling in your belly, that's your gut telling you to run. So get to running.  Don't second guess yourself. 

We can only re-act to the info you give us. One important factor is the vibe your getting from being the one actually dealing with this senerio. Listen to it.

I am attempting to do some market research. It was suggested to me to go to the Bureau of Labor and Statistics and do a search for "forecasted job growth".  The results all seem to be based on occupations as opposed to cities. I did searches for "forecasted job growth by city" and "forecasted job growth by MSA". I also clicked around to no avail.

Finally, I'll get to my question.

1. Is there a way to see forecasted job growth broken down by city? If so would you be so kind to lead me in the correct direction.

Ultimately I want to be able to look at the data and say ok the five areas (down to specific cities/towns/MSAs) in the country that have the largest job growth are............ and then concentrate on these areas to rule them out.

Is it out there? What should I be doing to find it?