All Forum Posts by: Jaron Walling

The answer is really simple. Neighborhood class. Just because you can buy $500 per month in cash-flow doesn't mean you want too. It's more than likely going to come with PM headaches, more turnover, and damaged flooring, etc. 

I'm not from Cedar Rapids, IA but we know what quality neighborhoods look like. We invest in C+/B class locations that COST MORE but equal less headaches long term. That property has been listed almost 100 days. In my opinion it's a C class at best. It's probably over priced a little bit as well. That's big theme in most markets right now. Tell me what's wrong with it? It's not an amazing turnkey deal because of the location and what I mentioned above. 

@Mike St. Jean Homes are constructed differently in every market. I'd start looking at rental comps to figure out what materials other investors are using. Carpet is cheap but if you want to stand out spend a little more. It's great for bedrooms but like you stated it gets torn up really quick.

If any of the renovation is a wet space I'd consider 100% waterproof vinyl flooring. Its easy to install (reducing labor costs) and really affordable depending on the wear layer thickness and brand. Shop around or look online for bulk pricing. A property built in 1910 may have uneven floors. If you do it makes vinyl flooring a great option. It's some what flexible helping with installation. LVP is another option BUT it's not going to be 100% waterproof. Many options with those. The end boss is solid wood floors. It's more expensive but lasts a lifetime. 

We recently installed Everlife Andover Series MSI flooring in our bedroom and it's 10/10 quality. It's not budget friendly for a rental property but it's really good stuff. It's textured and has a superior wear layer.   

@Ashley Meilunas Unless your married or have a written business agreement I would not buy real estate with any of those people. It's pretty risky. 

And by agreement I mean a legally binding document that outlines the terms and conditions of the business relationship or transaction between two or more parties. I should establish responsibilities and expectations for each party. 

It's no different than a lease stating the responsibilities between a tenant and landlord. It's important and evolves overtime.  

That's just my 2 cents. 

@Ashley Meilunas You mentioned a partner. 

My brother also made sacrifices because we lived in a construction zone for 5 months. Make sacrifices at a young age if you can because it's so much easier. 

@Ashley Meilunas The best way to get into into REI (not the easiest) is by buying a distressed property (aim for cosmetic+ rehab) and renovate it while living there. You can achieve this and put very little down if you buy in fridge areas, do the research, and negotiate a good price. You can add some value and fix it up. You could also rent by the room or house-hack at the same time which is very popular right now do to high housing costs.

Live-in flip, house-hacking, or a combination is basically a REI degree. It requires sacrifice, sweat equity, contractor relations, and property management (like screening tenants). You could live with family, find a roommate, or market the unit of a duplex. It all requires effort. You will gain knowledge from different aspects of the business which is invaluable. When you move out or sell the property is already fixed up. It's a long term win win.

I lived with my brother for 2 years, hired contractors as I could afford it, refinanced, and eventually moved out keeping it as an LTR. If an average guy from the mid west making $60k per year can do it you can too. Cheers. 

@Ryan Sherring Any experience fixing up houses? If you target the B/C class neighborhoods and find a good distressed property you could BRRRR and create your 15% DP via remodel (value-add). You're local and should know what a good deals look like. At a minimum I'd run the numbers in other locations, and see if the strategy works in your market (I'm sure it does).

@Kurt Patrice Do you have experience with real estate? Any family have a RE license? Who's bringing what to the table? Partners have roles, responsibilities, and tasks to complete. Partnering with family to buy deals is no different than renting to family. It's tricky and changes the dynamics of the relationship. 

I would create a clear business plan before going down that path. If it's your first investment property you don't need an LLC. Keep things simple and get it in writing. You need boots on the ground, market research, buy [box], cash/pre-approved loans, negotiation skills, and local knowledge to bring it all together.

@Luka Milicevic Interesting discussion and I believe the changes are already happening in specific industries. We watch YT videos and some of the best content creators typically hire out editing to make high quality videos. They're just the face of the brand with an entire team actually making the videos. They can now edit videos/podcast episodes using A.I software. It can cut, chop, and match up cameras with who ever is speaking in minutes. Videos that took hours to edit now take minutes. 

That's less people needed to accomplish the same goal. The social media and music industry is changing before our eyes. 

@Charoki Raposa-Luther We are primarily value-add investors and look for distressed opportunities (BRRRR) and from a management prospective it's been really easy. It's mainly due to rehabbing each property. Basically everything the tenants use including the kitchens, bathrooms, HVAC, and door locks have been repaired or replaced. We even trimmed the trees and try our best to keep branches away from the gutters. It's made it easy to self manage!

I also think the tenants are not complaining due to lower rent, and possibly fixing little issues without our knowledge. Regardless we're prepared to tack issues. If we have a turnover I'll expect a "reset" of expectations until they live there for at least a year. Ideally it's multiple years creating a win-win situation with low levels of maintenance.

Spend the money upfront, renovate/replace/repair problems, and thank yourself later. 

@David Tuma It's exciting and terrifying to buy the first house. It's bit said above but you really need to establish boots on the ground BEFORE you make any offers. Go out of your way to sit down, drink a beer, and discuss your REI goals. If it's house hacking, value add, or just "I want to live here for 5 years" with plans to move after that, you need a plan. Connecting with local professionals will help you.

If you don't plan to live in the house or stay in the area for multiple years I would not buy real estate. It's not enough time to see the benefits unless you're doing a live-flip deal. Cheers.