All Forum Posts by: Darlington Agu

@Josh Thomas

Just a thought but have you thought about renting the rooms out individually? That way there is four different leases and it could theoretically increase your overall cashflow. I'm doing that with one of my SFR and it's very profitable.

@Brandon Turner

What are your thoughts on moving in to the self storage side of real estate investing. I’m still fairly new to investing but I hear self storage is a great option

Originally posted by @Ryan Johnson:

Which area of Houston if you don’t mind me asking? Some areas that attract not so great tenants now are up and coming and may have some appreciation upside in the future.

 I purchased my first property in the sugar land area 

Hey BP,

Im relocating to the Winston-Salem, NC area and looking to begin acquiring a few SFR properties. My experience is mostly concentrated in smaller multifamily properties. Any suggestions on entering the SFR market?

Also if you have any recommendations for a great agent in the winston salem area I would really appreciate it. 

Im currently in escrow for my second quadplex in Houston TX, this deal im financing with a 7/1 arm and the cashflow is around 800$ after expenses. My first purchase wasn't a home run by no means its taken much more work to position the property to the cashflow amount that im comfortable with. The issue im having is that the area isn't very promising although the cash flow is good ( 1200$) , the quality of tenants that are attracted to this area is very low. Im constantly going back and fixing small things here and there which has eaten into my cashflow. My cap rate is about 5% now which isn't that high but from what I hear this has become the norm. My question is would you sell and look for another deal or hang on to increase cap rate in a few years and then sell? Please let me know your thoughts.

Originally posted by @Peter Tverdov:

Originally posted by @Jaron Walling:

@Darlington Agu What's your strategy after year 7? Rates will be way higher by then I'm sure. 

Thought I would respond to you since I have done something similar on one property. I chose a 7/1 ARM amortized over 30 years. The difference in the rate of the 7/1 ARM and the 30 year equaled several hundred dollars (larger loan). I am taking that delta and applying it to the principal every single month. So while I am getting a rate of 4.125% on my 7/1 ARM, I am paying the loan like it's 5% 30 year, except I am hammering principal. After 7 years my principal will be the same (or close to it) as the principal would be on Year 10 of a 30 year loan. At that point I plan to roll into a 20 year amortization or if rates were insane, I would refi back to a 30 year.

 This a really great strategy, especially with the impending decline approaching hopefully rates will decrease in the near 5-7 years, ill definitely consider this moving forward.

@Aaron Wade I think buying turnkey is a great strategy to get your feet wet but when it comes to growing in number of units I’d say look to buying and doing the work yourself (finding a deal, rehabbing and handing off to property manager) it’s a lot of work but the rewards are nice. I’ve finally created a team in Houston that allows me to Buy properties out of state with out even seeing it. It took a lot of work but it’s paid off. I own 8 rentals now and working on getting more.

@Jaron Walling I planned my exit at year five to either refinance or sell in order to take advantage of any deals that may arise due to foreclosure.

@Axel Ragnarsson Awesome testimonial and congrats on your business. I believe your suggestions and situations are unique to your area so kudos to you knowing your market well. I personally feel that cashflow wins over appreciation at least at this early stage of my business. In Houston, Tx appreciation values have been a bit out of the norm in the 10%+ Range but historically it’s been in the 5%. For my properties I have here focusing on cashflow has worked well. In say Los Angeles where I also own property it’s common to own property that cashflows negatively but with the appreciation values being so great some areas 20% per year, I find focusing appreciation values being the best strategy.

@Nicole Obregon Im relatively new to realestate investing and already I’ve had the unpleasant experience of evicting two tenants in the last 6 months. What I learned through this experience was to pay close attention to their eviction history not their income. For my new tenants I required no evictions in the last 4 yrs. The eviction process is such a headache I’ll do whatever I can to stay away from it