All Forum Posts by: Damien Lee

@Marcus Auerbach

Is this including in price points where I'm looking? Which are in the sub 100k range really. And that's awesome! I'm glad to hear you're doing well! I feel like due to my price point I won't be getting a lot of first time home buyers where I'm looking, I'll be checking out the zip codes that Rebecca sent me (@Rebecca Knox thanks!) but are those areas also included in the market update videos on your channel?

@Jon Coleman 

Hi Jon! Thanks for taking the time to respond! I'm currently living in Midtown and all the prices for REI here are comparable to the Bay Area as they're more suited for appreciation than cashflow. Plus I'm noticing quite a lot of new residential buildings popping up. This being said it doesn't seem very wise to invest in the Atlanta area. There's also the caveat that I don't have a car nor am I planning to get one and I don't plan on staying in Atlanta for more than another year from now on. With all this said investing anywhere in Atlanta that would make sense at my price point would pretty much have the same struggles as investing in an out of state market so I looked around and found Milwaukee as a viable option before settling down and choosing this market. The two areas I'm looking to get a new job are in Madison Wisconsin and Boston Massachusetts.

Since a lot of property management is based around scheduling appointments I feel like once I find a reliable handy man I can do a decent amount of the property investing myself. I've heard from another investor who's also investing in long distance properties that she's managing her properties herself using that method so I'd like to give it a hand. I believe if I can get the feel for managing one property I can use that to start building or at least think about how to build the systems I need for when I have more than one. And I'll definitely take a look at his channel, after I respond to him, haha!

@Marcus Auerbach

Hi Marcus! As mentioned before, with my current situation investing anywhere in the Atlanta area that would be considered a homefield advantage to me would pretty much be the same as investing remotely, plus since I'm planning on moving within a year. While it may be advantageous to get a car and pick Atlanta as my main market for investing, if my only reason to invest is because it's my backyard than that advantage becomes moot once I move. I'll start taking a look at your channel and I hope you don't mind if I start asking you questions! It may be that I may decide not to invest in Milwaukee after watching your channel but my strategy is for long term buy and holds and I feel like Milwaukee may have some potential (although probably would have to wait at least a decade before the appreciation gets serious). But again, I'll make a decision after I get educated from watching your channel!

@Rebecca Knox

Hi Rebecca! Thanks for the advice! I was using neighborhood scout to figure out what would be the safer areas and found that those areas were less dangerous than the inner city, but they're still pretty dangerous. It was the cashflow that I would be able to make with the duplexes that got me really interested in that area, although with the concerns I had which led to this post. Could you suggest the neighborhoods you were mentioning? Or are you saying better neighborhoods out of Milwaukee?

Hi all,

I'm a recently new investor that decided to get started in real estate, but due to the cap on my funds to start investing in real estate I'm looking at the sub $100K range for duplexes and between $100-$110K for a SFH. After doing research I've chosen Milwaukee as my main market that I want to focus on since it can fit my price range but seeing the statistics on crime and the average salary is making me a bit wary. I'm currently looking in the inner city (near walnut hill and Midtown) to mitigate the affect of crime but I'm wondering if there's anything I'm missing.

I’m mainly looking for a cashflow rental for my first property since I just want to get used to the flow of being a property manager which is why I’m looking at mainly duplexes. Does anyone know if that Midtown Area or Walnut Hill area are decent places to start off my investing journey or am I better suited towards a different market? I’ve read a bunch of books on investing and I think at this point I’m letting fear get the best of me but since I’ve never been to Milwaukee I want to make sure I’m not missing any vital pieces of information.

Thanks in advance and happy investing!

Hi all,

I'm a recently new investor that decided to get started in real estate, but due to the cap on my funds to start investing in real estate I'm looking at the sub $100K range for duplexes and between $100-$110K for a SFH. I'm mainly looking for a cashflow rental for my first property since I just want to get used to the flow of being a property manager which is why I'm looking at duplexes, but due to this cap on price it seems like the only area I can invest in are considered relatively high crime rate areas. Is this just due to the market that I've chosen or something that's common for these areas?

And for those who are investing in what’s considered a more “high crime rate area” what do you do to mitigate the risks? One of the statistics that I read was that the average rent around the area I’m looking for is $600 but the average salary of the tenants is around 20-30k, and this is per person (info pulled from City Data). One of the investors I’ve been talking to told me it’s fine and as long I do a proper gut check it’s alright but I wanted to see what other people in similar situations are doing as well.

Thanks in advance and happy investing!

Hi Everyone!

I'm pretty new at investing and I'm trying to identify a market that would make sense for me to invest in. I've been using the website City-Data.com to get some basic information like Median Age, Rent, Median house price, and Population growth but I feel like the tool is a little too broad (or I'm just using it incorrectly). For example, the population growth it gives me is over a period of 20 years, and I don't see a way to decrease that time range. It seems a little too broad especially with the impact of Coronavirus happening only within the last year which has greatly changed migratory patterns. Additionally, for income and house prices, and a lot of the numbers, they list Median which is great, but can also be very misconstruing based on the dataset it's pulled from.

Does anyone have a better tool than City-Data.com for finding city metrics like population growth/net migratory patterns, average & median income/house prices/rent, crime rates and so on during a smaller time frame? I believe I had found a map that detailed population growth but for the life of me I can't remember where I found it. Any sort of website or tool that you use to analyze a new market to invest in would be greatly appreciated!

Do you guys have any other sites that you find are more useful and up to date for finding the metrics of a market? I'm trying to find net migration patterns within the past 1-5 years, as well as what age the people who are moving is as well as the population percentage by age.

Hi Everyone!

I'm pretty new at investing and I'm trying to identify a market that would make sense for me to invest in. I've been using the website City-Data.com to get some basic information like Median Age, Rent, Median house price, and Population growth but I feel like the tool is a little too broad (or I'm just using it incorrectly). For example, the population growth it gives me is over a period of 20 years, and I don't see a way to decrease that time range. It seems a little too broad especially with the impact of Coronavirus happening only within the last year which has greatly changed migratory patterns. Additionally, for income and house prices, and a lot of the numbers, they list Median which is great, but can also be very misconstruing based on the dataset it's pulled from.

Does anyone have a better tool than City-Data.com for finding city metrics like population growth/net migratory patterns, average & median income/house prices/rent, crime rates and so on during a smaller time frame? I believe I had found a map that detailed population growth but for the life of me I can't remember where I found it. Any sort of website or tool that you use to analyze a new market to invest in would be greatly appreciated!

Do you guys have any other sites that you find are more useful and up to date for finding the metrics of a market? I'm trying to find net migration patterns within the past 1-5 years, as well as what age the people who are moving is as well as the population percentage by age.

Hi Everyone! 

I'm pretty new at investing and I'm trying to identify a market that would make sense for me to invest in. I've been using the website City-Data.com to get some basic information like Median Age, Rent, Median house price, and Population growth but I feel like the tool is a little too broad (or I'm just using it incorrectly). For example, the population growth it gives me is over a period of 20 years, and I don't see a way to decrease that time range. It seems a little too broad especially with the impact of Coronavirus happening only within the last year which has greatly changed migratory patterns. Additionally, for income and house prices, and a lot of the numbers, they list Median which is great, but can also be very misconstruing based on the dataset it's pulled from. 

Does anyone have a better tool than City-Data.com for finding city metrics like population growth/net migratory patterns, average & median income/house prices/rent, crime rates and so on during a smaller time frame? I believe I had found a map that detailed population growth but for the life of me I can't remember where I found it. Any sort of website or tool that you use to analyze a new market to invest in would be greatly appreciated!

Do you guys have any other sites that you find are more useful and up to date for finding the metrics of a market? I'm trying to find net migration patterns within the past 1-5 years, as well as what age the people who are moving is as well as the population percentage by age. 

Responses Part 2!

@David Song

This makes sense but currently I’m not at a stage where I can do this. If I had outside cashflow to support this property that’d be fine but since I don’t I’d need to use the money from my W2 job which leaves me less money to invest in more properties thus making it harder to take advantage of compounding returns and thus exponential growth. There’s also talk about the 1031 Exchange being repealed by Biden (however unlikely it’s still a risk) and the fact that Atlanta has already been rising by so much it may not reach the same rapid levels of growth as previous years. I don’t know nearly enough about how a market appreciates so it would feel more like gambling than investing should I try an appreciation play at this point. Later on when I have more cashflow this is definitely something I’d consider but not while starting out.

@David A Lisowski

Thanks for the feedback!

@John Patton

Gotcha, I haven’t even considered buying a new home. I think for now I want to be able to build some equity in my deals or not have to worry about whether or not a new house will be able to cashflow, but this is something to consider!

@Nick B.

Thank you! Are the metrics applied such as Pop. Growth, Income, Job, and Property Value Growth all only for Metro or can they also be applied to more suburban areas? Is there a resource I can look at to find more information? This is definitely a systematic approach that I’ll try to be adopting in the future!

@Axel Meierhoefer

Thanks for pointing that out! I didn’t even consider this, I was using numbers I had gotten for when I was looking at a house hack before I found out about BP, which is where the 2.75% came from, but I didn’t realize interest would be different for investments.

I was actually wondering about closing costs. Is there a reasons it’s always 3% of the actual home value or is it just a rule of thumb? It doesn’t make sense to me that a $100K house would have the same closing cost % as a $1 Mill house for the paperwork.

Again, for Turnkey properties I'm a bit wary on all the negatives that I've heard about them (such as them running bad numbers, making bad deals look good, and purposely having a high tenant turnover rate). Do you have a criteria when looking for Turnkeys or a process to vet them? Right now I have a more aggressive approach but a less risky approach is definitely something I'll look towards in the future later in my REI career. I also think to get to my time freedom point faster, I'll need to leverage my time as I don't have as much capital.

Currently my end goal is to get to 5-15k cashflow/month by the end of 6-7 years at the latest. I think 10K is definitely doable and 15K is very ambitious, but I’ll have to see and adjust as I get more experience. Thank you for the feedback!

@Duane Alexander

Gotcha, that makes sense. Ultimately I was thinking about investing out of state after running the numbers in metro atlanta.

Thanks again for all the feedback! I’ll definitely take this into account for my next analysis! Again, I really appreciate everyone helping me out! (responses broken up in two parts)

@Audrey X.

That makes a lot of sense. I was wondering why I saw so many renovated condos but still saw a decent amount of the condos still for rent. Thanks for the advice! I’ve never actually thought about building a new home, maybe when I have more capital/I’m further along in my investing career I can consider it!

@Jingru Sui

That makes sense. Currently since I’m just starting out and don’t have the cashflow to support an appreciation play I probably won’t be able to consider this. Do you know what specific suburbs would be a good idea to look at? I also feel like suburbs far from the city wouldn’t benefit from Atlanta’s growth for a few years which is the main reason I wasn’t exactly looking at them

@Neal Shue

Wow, that’s actually an amazing story! There’s probably no way I can replicate that. On the topic of Turnkeys, I’m very wary towards them since I’ve heard that most of them are pretty terrible at calculating the numbers and they try to make a bad deal look good just to sell you on the property and make money. Obviously that’s not what your experience with them have been. Plus just starting out I think I would want to have a higher return even if it comes with a little more risk. Do you have any advice on how exactly you vetted your turnkey companies to not fall into the common traps/pitfalls that I’ve heard of about Turnkey property investing? I’m glad that you were able to find a partner you could trust and figured out how to deal with the whole Covid situation!

@Maryanne Cameron

Please refer towards the end of the analysis. You’ll be able to see purchase price necessary for 10% CoCROI, Break even, and $200 Monthly cashflow!

@Ola Dantis

Understood! Thank you for pointing this out! I think I’m going to start looking towards markets out of state that have numbers that actually make sense to practice now. I’m not too worried about finding a deal since my main purpose is to learn and not find deals. Although I’m sure I will get weary once I actively start looking for them!

@Allen L.

Thank you! It took me quite some time to make the sheet! My next goal for this sheet is to read the book someone else had previously mentioned on estimating rehab costs and factor that into the spreadsheet for more accurate estimates. Hearing your feedback just makes it an even higher priority for me since I realize how important accurate numbers are.

Thank you everyone for the amazing advice! I can’t express enough how grateful I am that you’re all taking the time to teach me.

@Joseph Brown 

Got it, I've only ever looked at Midtown so I'm not really sure what a reasonable HOA price is. I'll have to look at other properties to get a better understanding

@Andrew Pfleger 

Well I was really more talking about deals that would be worth analyzing. I understand that 2% and 50% rule of thumbs, it’s just that I feel like in this market if I only analyzed deals on those properties I would never analyze deals and get better. But you bring up a valid point where I should focus my time on deals that would be worth buying. This is just one of the properties I really liked before I found BiggerPockets and was considering buying without running the numbers. Then I ran the numbers and needless to say I was pretty shocked at how awful this could have been for me.

@Jonah Kolsrud 

Understood, I’ve heard Brandon talk about value adds on his podcasts but I’ve never been actively looking for them. I guess it’s something to keep in mind while searching, but you’re right. I do need to learn how to filter things down more quickly.

Do you have any suggestions of what I should be looking at specifically to analyze a deal in under 5-10 minutes? Right now I'd consider looking at the CoCROI, NOI, and Cashflow, but that's really all I can think of. Of course if I'm looking at this deal for the 5 minute test then it would have gone through my minimum criteria filter such as location, criteria, and 1% rule and such.

@William Wiebolt 

I've actually had this question for a while but do you think the 1% rule should be more lax considering interest rates are at an all time low and the 1% rule was devised more for when rates were about twice as high as they are now? Or is this already being taken into account seeing as it's usually the 2% rule? And is the 1% for rent = around 10% cash return for things with HOAs exclusively or does it work for properties without HOAs as well? Makes a lot of sense of how you might want to get a better house than deal with an HOA.

@Rick Baggenstoss 

I’ve never actually thought of it that way! That makes a lot more sense than just estimating a bunch of numbers for the rehab. And while I think rents will be climbing I don’t think it’ll be climbing by very much. There have been quite a lot of development and new residential buildings/apartments being built in the area which leads me to believe rent appreciation will be of limited growth. But I’m also not sure how accurate this may be. And I’ll keep in mind about investing in condos, thanks!

@Neal Shue 

Thank you for the feedback! Glad to hear it's accurate, and interesting perspective to take. I haven't really considered rent to cost ratios for the market so I guess that'd be a great start if I'm trying to find narrow down the market I'm looking for. I am planning on investing out of state (once I get more familiar with the basics) and the main way I wanted to pursue it was through partnerships. Would you be able to shed some light on finding trustworthy partners for REI out of state?