All Forum Posts by: Corin Prendiville

A picture of the flooring will help answer if replacing the flooring is worth it. If it won't alter the rent to replace the flooring I advise you not replace the flooring.

If you do replace flooring I would avoid laminate though on a rental, it looks nice for about 5 minutes then a tenant puts a giant gouge in it or the kitchen sink leaks and it buckles and it looks like hell. LVP is the only right choice for a rental unless you want to replace your flooring on a regular basis. I'd recommend Home Depots Lifeproof but there are other good options if you don't like the patterns like Floor & Decors NuCore. 

You could put tile in the bathrooms if you like as well. 

Be careful not to over-update out of excitement, its very easy to replace a few things and then feel like you need to do everything. Look at the rentals in the area and see what the best competition is, don't go above that or you'll find your profits being eaten by pointless CapEx.

Hey @John-Patrick D. Bailey! Everyone feels like an imposter when they are new to things, you just move forward and do it. The learning is in the doing. 

The best way to learn about REI is by house-hacking your own place or getting into a small multi-family and renting it out. REI is made up of only three things: Buy, Manage, Sell. Be okay with messing up your buy sometimes (even the best investors mess it up sometimes), stumbling through your management at the beginning is okay just don't sleep on it, and some day you'll sell at a profit if you don't over-extend yourself!

Start with a house-hack, then think about the second one once you feel like you got a handle on it, work your way toward distressed properties, flipping, etc. If you can find someone to work alongside who does flipping or management and needs help take the opportunity, but its far from required to get started. 

Welcome to BP @Edward Luna! Being an agent can be tough especially getting started, just lead with value and always be communicating to new people about real estate.

Hope you enjoy your stay, BP is a great place to be. 

You can house-hack in any major metroplex, but the thing you are looking for is an area with more demand for housing than supply. The higher the demand, the less the supply, the easier it is to rent rooms out and for more money.

DFW is a good market for this, so is Austin. Probably price per bedroom is better in DFW than Austin. What I would do is look up the specific area you want to house-hack or are considering on Roomies or another room share app or a place like Facebook Marketplace. Find out what the low and high is for a bedroom in the area and pay attention to the condition of the rooms and nearby amenities. 

If you get a place near where traveling workers are you will have the best results (near hospitals, colleges, close to downtown, close to airports, etc). I think house-hacking is still an amazing way to build wealth and cut your expenses with very little downside, its how I got started investing and if I wasn't married I'd be doing it to this day.

I would consider how you feel living in the city above which one is best for house-hacking, all of them work.

Different agents have different deals, for on-market deals I would probably work with 1 agent per area someone you like and who is responsive, but no reason to not have any number of agents who can bring you off-market deals. Sometimes an agent could come across a distressed property with a seller who can't wait to go to market due to extenuating circumstances, having a line on multiple agents who come across deals like this doesn't hurt anyone. 

Don't show a house with one agent and then let another agent handle the paperwork and collect the commission, that is scummy. 

If you buy locally are you going to house-hack it? If so that advantage makes it worth staying local. If you can self-manage locally and are willing I'd also stay local for that reason, saving 8-10% on a PM and getting firsthand knowledge of how to properly manage a property will help you a ton once you do upgrade to using a PM.

As others have said, there are other risks associated with buying out of state, if you have the capital to manage and weather any storms you may run into from afar its not out of the question as to whether it is worth it but as a new investor you truly do not know what you do not know so I wouldn't recommend investing long-distance. That being said its not impossible for it to not work out and for many investors living in places like San Francisco or LA it only really makes sense for them to invest long-distance. 

Not a lot else to say on what an appraisal waiver is but I thought I'd add some strategy advise. 

In this market appraisal waivers are becoming commonplace. Its important that your agent is able to provide you with a properly prepared CMA so that you know what you are buying is worth what you are paying for it. This at least reduces the risk that you will be having to pay a lot out of pocket to cover a low appraisal. The most important thing with an appraisal waiver is to not do one if you do not have the funds in order to cover it (or are unwilling to assume that risk).

The market is ever changing so there are no guarantees that what you buy today will be worth what you paid for it tomorrow even if the house does appraise. In a multi-family property situation I would be looking more at the cash on cash return, cashflow and condition of the property as an indication of whether the property is a worthwhile investment, if the price I offer doesn't appraise at a bank that shouldn't matter to me if I ran my numbers correctly and plan to hold the investment long-term. Obviously, the better price you get on entry the better the investment will do for you over the long-haul but nobody is giving away multi-families in this market. 

If you have a good CMA, and the numbers make sense for you then the last question is whether you have the liquidity to cover the costs of a low appraisal and to what degree. For example if I offer $400,000 for a property with 25% down I have to have $100,000 in cash + closing costs, but lets say it appraises at $375,000 I now need to cover 25% of $375,000 or $93,750 + $25,000 difference of what I offered over appraisal which comes out to $118,750 + closing costs.

When you have an appraisal contingency you have the right to walk away when the property doesn't appraise, or negotiate with the seller if they are willing (maybe meet halfway or they reduce all the way). Waiving that contingency puts you in a weak negotiating position if the property fails to appraise, and also puts your earnest money at risk if you are unable to perform. In a sellers market they can often ask for it because it reduces risk for them, however if a seller receives no offers with an appraisal waiver they will likely accept an offer that does have an appraisal contingency in it.

You can also do a partial appraisal waiver which means you'll waive up to a certain amount. Lets say you only have $15,000 extra cash to put down toward the down payment in the case it doesn't appraise, now you can afford for the property to appraise as low as $380,000 and still go forward with the deal (you'd need $115,000 total in this scenario to go forward with the deal). You submit an offer with a partial appraisal waiver up to the amount you can afford to waive. This makes your offer as strong as possible without putting yourself in a position to lose your earnest money. 

Your offer is always a balancing act of indicating to the seller what you are willing and able to do in order to perform, and protecting your earnest money. Every offer is structured differently based on what the buyer can and is willing to do. Just remember not every seller is going to get all cash offers with appraisal waivers, inspection waivers and 3 month leasebacks (even if they are requesting it - if you like the house but are unable or unwilling to do an appraisal waiver it won't hurt you to submit an offer without one, just know your offer is going to be weaker than an equivalent one that has a waiver in it. Worst case scenario is they accept another offer).

Last thing to mention is that less than 8% of properties do not appraise. If you are offering well above asking price or a proper CMA is telling you the property isn't worth what you are paying for it you are significantly increasing your risk of getting a low appraisal. On the other hand if you get a good CMA and it is telling you the house is worth what you are offering you will most likely come out okay on an appraisal or be in a good position to contest a low appraisal. 

I've looked at several multi-families in the Fort Worth area and in east dallas and surrounding communities that cashflow pretty well with 20% down. Single-family is doable but harder, North Dallas markets you will pretty much not get a cash-flowing property unless you BRRRR it but like others have said you also won't be pulling all your cash out of the deal, so you could be looking at ending up at 10-20% cash in, the remodel effort and time and then just decent cashflow but at least then you are in an area primed to appreciate significantly more over the next decade.

The game is changing, you either change with it or get left behind. People waiting for a repeat of 2008 might be waiting until 2108 for all we know. 

I would try to find some Youtubers who invest in the area you want to and see what those areas are like and the things they go through. Watch out for reading too much into paper returns, I can show you some great $10,000 houses outside of St. Louis that cash flow $500 a month. I'll check in on you in 10 years and you can let me know how those returns went. 

Every market has pros and cons you just need to run your numbers and see what works for you. A lot of people invest locally because they can cut out management and do some repairs themselves if it comes down to it, for others that doesn't turn those houses into good deals and eating management costs still nets better returns than their local market could provide. We are exiting the era of cash-flowing properties with 0% down in nearly all growing markets. You can find them, but they are like a needle in the haystack not just throwing a dart at the MLS and putting in an offer.

Personally I won't invest anywhere that isn't seeing consistent population growth, the last thing I need is a house in an area where populations are going down 10% a decade and I can't rent or sell my house to anyone. I'm in this for the long game not what few hundred dollars I could secure this year by buying cheap - my rentals are my retirement plan so I need them to be solid investments for a long stretch of time not speculative or good today and Detroit tomorrow. 

Welcome to Dallas @Yen Chian tan ! If you have any questions about being an agent, investing in Dallas or anything else feel free to reach out. Uber can be a great way to meet people and I'm sure you are getting to know the city a lot better as well so that is a huge plus. 

The market is definitely hot right now. We can hope things cool down over the next year but its hard to say whether prices are going to come down or just stabilize at their new levels. Either way it sounds like you got a good plan of action to get started!