All Forum Posts by: Jeff Roth

Hi Felipe from Atlanta, Georgia-

You have a single-family rental in Macon, Ga. You had some larger, unexpected expenses recently on the property you bought a year ago. With the added expense from those repairs, you are breaking even.

Then, your tenant stopped paying rent two months ago and there is now a bug infestation. 

You ask if you should continue learning and renting the property or consider selling.

I am sorry this is happening Felipe. One thing I do not know is the current market value of the property but you say you are definitely negative so far on the investment. Another thing to consider is how well are properties renting there or is the demand and rents softening which you can see looking at the number properties for rent that are similar, how long they take to rent, and if rent reductions or similar incentives are happening. If the rents and rental market is stable and you can afford to stabilize the property, you may want to keep it for the long-term appreciation and tax benefits.

Or, if you are emotionally and financial done, you can sell and because you have owned it over a year any gains would be taxed as a long-term capital gain.

The choice is personal for you in the end and your overall financial picture.

To Your Success!

Hi Chris from Columbus, Ohio!

You are one year into your real estate investing journey and looking to connect with other professionals to grow your portfolio of income properties and fix and flip projects.

Congratulations on deciding to focus on real estate as a valuable asset class to have in your portfolio and benefit from the government giving you tax incentives to provide housing.

If you are looking to diversify your portfolio into Michigan, we can be of assistance and a resource. We have relationships across the state with top property managers for long-term and short-term rentals as well as off-market residential and commercial properties and investor friendly contractors to help you with those fix and flip projects. We also help people buy and sell boring, recession resistant businesses like laundromats.

To Your Success!

Hi Eli from Athens, Georgia-

Great question! You want to get into real estate investing but the area you live in is too expensive.

You asked if it's bad to buy in an area that is more affordable about an hour and a half away from you for your first investment.

First off, I think it is smart to be within driving distance of your first investment if you can, preferably within an hour, but close enough to get to it.

However, having a solid local team that acts as your fiduciary, should really limit your need to go and see the property and extend where you buy properties-even out-of-state. This should include an investor friendly Realtor and experienced, well reviewed, property manager. Its also makes owning your property more passive and you are more likely to keep building your portfolio. Plus, a solid property manager should help keep tenants happy, reduce turnover, and add value to your property. They should basically pay for themselves with the value they add to you, the tenants, and the property.

To Your Success!

Hi Xavier from New Jersey-

Congratulations! You are looking to buy your first house, you make good money, and have good credit. The only issue is you don't have enough for a downpayment and you would like this house to be your first investment home.

You are not alone in wanting your first home but not having enough for the down payment.

Look into downpayment assistance programs and loans to help you with the down payment and look for roommates to help you pay the mortgage.

Another option is to approach rental properties that you might want to own and ask the landlord if they would consider selling to you with seller financing. Make sure to have a local real estate attorney draft and review the agreement but you may be able to get into a house with minimal down especially if the landlord is tired of renting the property out.

To Your Success!

Hi Jonathan from Los Angeles-

Great question and congratulations on saving $100K for your first investment!

You are interested in investing out-of-state and wonder which markets to consider and if you should pay cash or use leverage.

First, make sure you know you have the best team in place in the market you are considering including an investor friendly Realtor and highly experienced and well reviewed property manager. You can buy properties in your price range but without the local team in place it will be very risky at any price.

One market to look at is Lansing, Michigan. It is the State capital. There is lots of economic development, which is good for jobs, which drives housing, rental demand, and appreciation.

You can buy a single-family house for cash with that amount, which you stated is your goal, but you might save a bit more or use leverage to get a duplex for around $140K and have two units with hopefully one always bringing in rent.

To Your Success!

Hi Angel from Chicago, Il-

Great question! You are looking to get started in real estate in the Chicagoland area and are considering house hacking and renting out rooms to help make the payment. 

You asked how much money is needed to buy your first property. 

Certainly buying the property as a primary residence will keep the downpayment and interest rate low but also look to get seller credits toward closing costs to help with those expenses as well.

Try to have some reserve for unexpected expenses or repairs.

To Your Success!

Hi Poojitha from northern California-

Great question! You are a first time out-of-state investor with 400K in cash and looking to build your portfolio over the next five years.

You asked about good cash flowing markets and whether you should pay cash or use leverage with a mortgage to get the best return.

Understandably, you want to make the best decision and are concerned being a first time out-of-state investor.

Depending on your goals, having a few paid off units with free cashflow can provide as much cashflow as several leveraged properties with more management involved.

Mathematically, you will generally be further ahead using leverage but it is a matter of your goals and risk tolerance.

Whether buying with cash or using leverage, you will need an excellent local team including property management and investor friendly Realtor that acts as your fiduciary.

If you haven't looked at Michigan, there are many markets that cashflow well with a reasonable climate and demand for rentals. We have helped many investors from California and other states invest successfully in Michigan.

To Your Success!

Hi Kenny-

Great question! You are 24yrs. old and new to real estate investing and have analyzed deals under $250K for 3 bed/2 bath houses near you and the numbers don't work. You wonder what to do next.

Since you say you have read the books and watched the videos but lack experience, I would find an experienced mentor to help you find your first deal.

You can find your mentor in another investor, a local property manager, or an investor friendly Realtor with a teacher's heart.

Ideally, you want a mentor who has investment experience and can recommend the rest of the team you need to be successful especially if you start looking out-of-state.

Try expanding your search area locally first but there are plenty of markets in Michigan that cashflow at or below your search criteria.

To Your Success! 

Hi Stephanie-

Great question! You asked if you and your spouse can have two primary residences for tax purposes in California.

While I am not a tax expert and you should consult a local tax expert in California and/or real estate attorney; in Michigan, if a married couple files taxes separately, they can claim homestead exemption property taxes on two separate primary residences. While this lowers property taxes (which does help), it does not affect income taxes.

To Your Success!

Hi Avani from California-

Great question! You asked about out-of-state markets that cashflow as the properties in your area are too expensive. You are not the only one experiencing this where they live.

Fortunately, there are many markets that cashflow under your $500,000 budget in Michigan.

We have excellent property manager partners (including short term rental property managers), property inspectors that find everything, reliable investor friendly contractors, and have helped many investors from California and across the country.

The key to successful out-of-state investing is having a strong team that acts as your fiduciary including an investor friendly Realtor.

To Your Success!