All Forum Posts by: Evan Thomas

There is a lot to be said about commercial multi-families where you can have a lot of units under one roof which consolidates management, creates economies of scale for maintenance and capex projects, and also gives you an easier time of managing/visiting your investment. And since you already have a background in CRE, you could leverage your network and knowledge much quicker to find a better deal in that space than re-learning a whole new investing dynamic. Whatever you do, good luck to you!

I'd like to start looking for deals, but I'm facing a few problems:
1. I live in NYC, and I don't own a car.
2. Current Rent: $1,450/month
3. Potential Lowest Rent in White Plains, NY (where I work and would like to start living & looking for investment properties): $1,000/month
4. Recent graduate with great credit but minimal savings due to points 1&2. 

I found a studio in a co-op that's 400 square feet which would suit me perfectly, and it would allow me to save money in terms of rent expense ($1,450/month would turn into $600/month all in), commuting expense (I would bike the 2 miles to work and back), and general cost of living from moving out of the city. 

Without the time to get around in White Plains to find a multi-family househack or even a FSBO deal, wouldn't it make sense to buy the shares in this co-op to pay $600/month (includes mortgage, utilities, maintenance, HOA, everything besides wifi) instead of continuing to rent?

Is there another option that would be viable in my situation that I'm not seeing?

Thank you very much.

@Jonathan Johnson I'm crying at my desk at work from laughing at your play-by-play. Fantastic. 

Hey All,

I just graduated from college last May, and I've been paying rent in NYC for about a year. I'd like to get pre-approved for a mortgage so I can househack my first deal with an FHA loan. While looking through the pre-approval guidelines on Investopedia & Quicken Loans for an outline of what I need, I noticed that it will be very hard for a bank to verify my credit history and pay history since it's so short.

I've only had a credit card (that I've been diligently paying off for a year) and a credit history of 742 currently, I only have 1 W-2 since I just started my job last July, and my bank account is pretty slim because I'm currently paying such high rent. 

If I'm starting to save now, should I try to get pre-approved now or should I wait 3 months which is when I'll have some money in the bank? If I got a tiny pre-approval now, could I get a bigger pre-approval letter in a few months from now (when I have more history and savings) without the stigma of the first pre-approval amount?

Thank you so much for your input. 

I'm just starting out as well, but here are two books I really like on the subject. 

1. The BP Book on Rental Property Investing by Brandon Turner
2. Hold: How to Find, Buy, and Rent Houses for Wealth by Steve Chader

What have you been reading?

There was a BP podcast (episode 140 w/ Bill Syrios) where he talks a little bit about his student housing rentals. One of the thing he mentions that I heard in a few other podcasts was the idea of having a contact person in your rentals so you don't have to split everything between all of the different roommates. That single contact person relays all messages from the roommates to you, and all of your messages to his/her roommates. They would also be responsible for the rent and security deposit and splitting out one check you send to him/her for their roommates. 

This might ease your pain a little bit in the process, streamlining some of the work. 

Taking off from Ravi's point about firing the current PM due to lack of business, you could do possibly:
1. Fire the current PM immediately
2. Hire a local property manager that would generally work on small/large multi-families
3. And while that more expensive monthly PM is keeping you afloat in the near term, you can get busy using HCareers, Indeed, SimplyHired, or another outlet to find a long-term, live-in property manager who can diligently manage the motels. 

Once you have the new PM your mother will have enough time & money to research a little bit about the systems that will keep her new PM accountable. In less than 6 months your mom should have two cash-flowing properties that she can hold on to or sell at a better value. 

Another avenue would be to use some of that 150-200k to pay down your mortgage, then take out a line of credit on your home to get started in the Real Estate Investing world. If you leverage the investment in your house, you could potentially buy even more income producing properties (assuming you've already made some payments). 

@Account Closed Those are fantastic pros to sticking with the 30 year mortgage. Not only does it give you downside risk management (lots of podcast guests, as well as Bloomberg and other news sources have been talking about weakness or coming weakness in RE markets), it also saves you money by giving you more cash which you can use to pay the loan off early. 

I've been thinking about the pros and cons of longer vs shorter debt, and you've sold me on longer. Especially while rates are still so low. 

One thing I noticed is that you list vacancy at the top at 5%, then you lump it in with capex & repairs which total 9%. But that 9% of the $2,450 rent should be $220.50, not $196. So your bottom line cash flow would be $276.50. Not a bad deal since you're still getting cash flow every month, but you might be able to find a better deal where you can keep a higher barrier between repairs/capex and a higher cash flow (like the $100/door that Brandon talks about in the BP Podcasts).