All Forum Posts by: James Harryton
James Harryton has started 6 posts and replied 19 times.
Post: Looking for advice 21 year old firefighter
- Posts 19
- Votes 5
Hey guys my end goal is to scale and hit the million dollar number to live well off and leave something behind for my family. I'm a 21 year old firefighter I make around $60k a year. I have a rental property that I paid for using fha for about 200k and I owe 191k on it I want to be able to hold it long enough to build equity, get a heloc on it and buy another one maybe duplex tri plex etc. however this year I'm going to be at a stand still because I'm going to paramedic school which is a year and I'm saving up for my wedding because I am getting married shortly after. Outside of that I still want to hit that number by late 30's I've been trying to figure out how to buy a cash flowing business with little to no money down I've had thoughts of using my heloc to then use on an sba loan to buy a business and I've also thought about taking out a life insurance policy to then put inside of a trust along with the home and borrow against the trust but I was advised not to do that from a Financial Advisor since the rates would be too high and it would take longer to build the wealth. Any ideas or advice on how I can navigate would be so helpful thank you so much!
Post: Investing advice 21 year old firefighter
- Posts 19
- Votes 5
@Mackaylee Beach thank you so much! I've been looking into fix and flips have a guy who has a company he does all the work he just needs someone to partner with to get constant job. I'm trying to use him as my contractor now I'm just trying to figure out the insides of fix and flip and how the numbers work
Post: Investing advice 21 year old firefighter
- Posts 19
- Votes 5
Hey guys my end goal is to scale and hit the million dollar number to live well off and leave something behind for my family. I'm a 21 year old firefighter I make around $60k a year. I have a rental property that I paid for using fha for about 200k and I owe 191k on it I want to be able to hold it long enough to build equity, get a heloc on it and buy another one maybe duplex tri plex etc. however this year I'm going to be at a stand still because I'm going to paramedic school which is a year and I'm saving up for my wedding because I am getting married shortly after. Outside of that I still want to hit that number by late 30's I've been trying to figure out how to buy a cash flowing business with little to no money down I've had thoughts of using my heloc to then use on an sba loan to buy a business and I've also thought about taking out a life insurance policy to then put inside of a trust along with the home and borrow against the trust but I was advised not to do that from a Financial Advisor since the rates would be too high and it would take longer to build the wealth. Any ideas or advice on how I can navigate would be so helpful thank you so much!
Post: New Rental advice
- Posts 19
- Votes 5
I recently bought a home in Avon park Fl. The rent in that area goes for 1500-1600. I have mine for 1800, I’ve been receiving a lot of attention on and people have been touring it a lot, however no one has finally made the next steps to move in. Should I drop the price to 1700? I’ve had the home listed for about 30 days now
Post: How much is too much
- Posts 19
- Votes 5
Quote from @Ray Hage:
@Dan H. I am somewhat familiar with Polk county but I don't believe the rental demand is super high in that area in general. That's the main reason why I wouldn't worry if there were no hits in the first two days. Now we are 4 days along, so if still nothing, I would start to worry and do something about it.
@James HarrytonAny update for us?
I dropped the price to $1800 no utilities included I’ve had 3 hits so far one was viewed the property and loved it then when it was time for the background check she disappeared. The 2nd just told me she couldn’t afford it because was taking care of her father and going to school. The last one just reached out to me a couple minutes ago asking about the pet policy
Post: How much is too much
- Posts 19
- Votes 5
Quote from @James Harryton:
Quote from @Dan H.:
Quote from @Ray Hage:
I wouldn't worry too much yet but if after a couple more days of no activity, I would bring the price down a bit to be closer to the top end of the market and see if there are recent comparables that have been rented (especially if you have access to the MLS)
I disagree about not worrying about getting no interest in 2 days. Every market is different, but when my add first gets posted get inquiries immediately.
These are rough numbers, 30 inquiries results in 5 to 8 property views, that results in 1 to 3 applications received. In my market, it requires a lot of inquiries to get a qualified tenant. If you have zero inquiries, you are not likely to get a qualified tenant.
By the OP’s own numbers, he is above the top end of average rent range. OP does not state any reason his unit warrants above average rent. Note, because it looses money otherwise might be a reason from the LL’s perspective but is not from the tenant’s perspective.
I highly question the underwriting performed. Note I do my underwriting with conservative numbers so I would have used $1500 rent, but seeing that the OP apparently wants to use top down f market rent.
$1800 (high end of rent range) - $1535 (hopefully mortgage includes full PITI) - $90 (5% vacancy) - $400 maintenance/cap ex - $180 PM (at that low rent point I am using 10% all inclusive) - $50 misc (bookkeeping, utilities that are not tenant responsibility such as slab leak, tax man, allocation of asset protection, etc). Negative $455/Month and at that price/rent point, poor historical rent growth and appreciation.
What is the expected source of return? Note residential RE is not passive even with the use of a pm. To be worth the effort, it should produce return significantly greater than passive options. D you see this property accomplishing that?
Good luck
I don’t believe it would be able to accomplish significant cashflow due to the location. My next goal would be to rent it for that and not take any cash flow from the property yet just keep it in the reserves then try to refinance at a later date or see if the home appreciates enough
Post: How much is too much
- Posts 19
- Votes 5
Quote from @Dan H.:
Quote from @Ray Hage:
I wouldn't worry too much yet but if after a couple more days of no activity, I would bring the price down a bit to be closer to the top end of the market and see if there are recent comparables that have been rented (especially if you have access to the MLS)
I disagree about not worrying about getting no interest in 2 days. Every market is different, but when my add first gets posted get inquiries immediately.
These are rough numbers, 30 inquiries results in 5 to 8 property views, that results in 1 to 3 applications received. In my market, it requires a lot of inquiries to get a qualified tenant. If you have zero inquiries, you are not likely to get a qualified tenant.
By the OP’s own numbers, he is above the top end of average rent range. OP does not state any reason his unit warrants above average rent. Note, because it looses money otherwise might be a reason from the LL’s perspective but is not from the tenant’s perspective.
I highly question the underwriting performed. Note I do my underwriting with conservative numbers so I would have used $1500 rent, but seeing that the OP apparently wants to use top down f market rent.
$1800 (high end of rent range) - $1535 (hopefully mortgage includes full PITI) - $90 (5% vacancy) - $400 maintenance/cap ex - $180 PM (at that low rent point I am using 10% all inclusive) - $50 misc (bookkeeping, utilities that are not tenant responsibility such as slab leak, tax man, allocation of asset protection, etc). Negative $455/Month and at that price/rent point, poor historical rent growth and appreciation.
What is the expected source of return? Note residential RE is not passive even with the use of a pm. To be worth the effort, it should produce return significantly greater than passive options. D you see this property accomplishing that?
Good luck
I don’t believe it would be able to accomplish significant cashflow due to the location. My next goal would be to rent it for that and not take any cash flow from the property yet just keep it in the reserves then try to refinance at a later date or see if the home appreciates enough
Post: How much is too much
- Posts 19
- Votes 5
Quote from @Nathan Gesner:
Quote from @James Harryton:
This doesn't sound like a wise investment. An investment should pay for itself and have enough left over to set aside for reserves. If you buy a house with a $1,500 mortgage, you also need enough to cover taxes, insurance, and maintenance. Then it would help if you still had more to set aside for future vacancies and capital expenditures. A good investment will typically bring in around 50% more than the mortgage payment. Using your house as an example, I would want to rent it for at least $2,300 or more. You will probably lose money even if you rent it for $1,800.
The insurance and taxes are tied into into the mortgage payment I was able to get the house for 3.5% so I have to pay pmi which is why the mortgage is higher I’m trying to figure out a way for it to be profitable
Post: How much is too much
- Posts 19
- Votes 5
Quote from @Theresa Harris:
Ask yourself what makes your property worth $2100 (incl water) when rents in the area range from $1500-1800 (assuming that doesn't include water)? If it has something that the others don't, then perhaps.
One option is to lower the price and have tenants pay for the water. They see the lower rent and don't factor in the extra expense. I have water bills in my name for two places and tenants add that cost onto the rent when I get the bill every 3 months.
I figured since it has been completely remodeled it looks a lot better the the surrounding comps going for that price
Post: How much is too much
- Posts 19
- Votes 5
I just relisted the property for $1800 with no utilities included hopefully I can get it rented out rather quickly