All Forum Posts by: Dan Nelson

I agree with all the general information here.  And I will add this.  I read every book, and talked to anyone that would share advice.  I spent ten years trying to get up the nerve to buy the first house.  Everything I read and heard taught me 10% of what you learn by doing it.

For the most part, the only mistake you can make is waiting.  Everything else is learning.  Find a great agent in the area that works with investors and shares your goals.  If you don't know anyone, I am happy to recommend someone in UT. Run the numbers.  Buy something.  Learn.  Do it again.  Eventually, it will seem so easy you have no idea why everyone doesn't do it.

Very good answers above about why to sell and how to analyze.  With no information except what you provide, I am certain  I would Get a Heloc on my property and use that money to buy my next property and rent the current one out.   

Recessions are not bad for buyers - only sellers.  The challenge for buyers is trying to decide which property to get.  They can get overwhelmed thinking the market is going to get worse or they are overpaying.  The best thing you can do is pay attention to the market and know if it is going up or down.  If it is going down, you can get more aggressive on the asking price.  They want to see you bring knowledge, share it with them, and lead confidently.  If you do that, they will love you. 

The real challenge is if you are selling during a recession.  If the market really goes that way - and I am not certain it will because we still have a massive inventory problem, you just have to be realistic with sellers.  During a downturn, the houses that are finished are going to sell first.  Any unfinished house is going to look like a bargain to buyers and they should be prepared for that.  

Basically, there is no reason to be worried.  Pay attention to what's happening and know your market.  You will always have success if you do that in any market.

I absolutely loved this response by @Erik Browning.  

@Daniel K Houck I totally understand how you feel this way.  I have two comments and then some advice. 

1) Because you are on Bigger Pockets, it seems like most people do this, but the reality is almost no one does.  I cannot tell you how many renters I have where I say, "you could buy a condo or a home for this price.  Let me help you."  And they just can't do it.

2) You did not say how old you are now, but I suspect it absolutely achievable.  

And here is my advice.  

Having money is not your obstacle.  It is just a small problem. Everything about having a career in real estate is solving with small problems.  There are very few problems that are big. I agree that buying your first property is the hardest.  The second is hard too.  Third also hard.  After that, it is just up to what you want to do.  Regarding my first point, very few people do this because they don't tackle that small problem or instead focus on what seems impossible.  it is not impossible.  If you come back here and say, you called every lender on biggerpockets and sat in the chair of every local bank in your town and no one had any idea how you can get a loan, we can tell you what to do next.  Start there though.  I am a realtor. I just sold a 2-unit property to a 25-year-old kid that had no money.  Every place we looked his mother came with him and told him he was making the dumbest mistake in his life.  I suspect by the time he is 40, he will have $4-5 Million dollars in real estate.  Everyday you get up and decide to go to work.  You make sure your family has food and a roof overhead.  That is 100,000 times harder. And more important.  Best of luck.

It sounds like you have your answer.  If you want to househack, you have to do it where you are living.  There are other areas where you can make much more cashflow, but your house might appreciate faster than other markets.  If you can put 70K down and get a house you can afford with tenants, it makes a lot of sense.  The worst-case scenario is you hate being a landlord and you sell your house.  If you do it out of state, it is far more complicated.  But either is a great idea.  As long as you do the math and know the property fits your goals, the only mistake you can make is waiting.  My biggest regret is that I spent years trying to learn everything before starting.  You really don't learn anything until you start.

Great comment from @Joe Jackson, Jr.

I assume you want to finish your rehab before you do either. The most important factor is what it will appraise for and you want that number to be as high as possible. I too would suggest a HELOC. You only pay for what you take out. I can only assume if you refi now, your rate will be much higher. Your HELOC will also be high, but it will only be on the relatively small amount you are borrowing against your equity. At this point, you need to talk to some lenders and have them give you scenarios for both and see what works for you.

Alexis, I really impressed you figured out the situation from these comments.  You got this.  You will get the next one.

Hi Tracey,

It is no secret that in Chicago May 1 is the golden time when you can always find a new tenant.  However, June 1st is also excellent.  If that is your only question, May is better, but June is still very good.  If I were in your situation, I would make one May 1 and one June 1 so that if both leave in the future, I don't have to fix, clean, and fill both apartments simultaneously.  If you are not bothered by that, I would recommend making them both May 1.

The goal is to build a relationship with a contractor.  It sounds like you don't really have a contractor in mind, but simply want to find out what it would cost to do the work.  

Because you don't have a relationship with a contractor right now, I suggest you get a referral from someone for a contractor and pitch this idea.  Tell them you are happy to pay for their time and a general budget.  Many will do this, some won't.  Don't be offended by the ones that won't do it.

Eventually, after you have worked with a contractor who knows you and that you are reliable, they will do this every time. No one wants to work for free, but when they know you are serious, they will be happy to help out because they know this is the process for future work.

I am delighted by the optimism in these responses.  I too am extremely optimistic about rental properties in the Chicago area.