All Forum Posts by: Jeff Roth

Hi Abigail in Austin Texas!

You are considering putting a tiny home on your existing property as an ADU or using that money to save up and buy the next investment property and wondering which would be the wiser choice.

I think ADUs can help provide additional, much needed, housing. Make sure the zoning, local building department/regulations, and neighborhood allow you to put a tiny house on your property and rent it out.

If that is not possible, using that money for the next property makes sense.

In general, I think increasing housing density will help provide more badly needed housing affordably.

To Your Success!

Hi Jade in Kaukauna, WI!

You own a home there, you think will cashflow if you rent it, and intend to buy your next home.

Your question is should you rent it or sell it and buy the next house?

I think this is a calculation a lot of homeowners are making right now--especially if they have a low interest mortgage, equity, and their house will cashflow as a rental.

The choice is a personal one of course, but I think your future self will thank you if you pull out some equity from your existing home with a HELOC for the downpayment on the next house and a cushion renting your current home, use a property manager as you have other things to do, and buy the next house and do the same thing again. Your existing low interest rate mortgage is an asset that you likely won't get again.

To Your Success!

Hi Fulati-

Congratulations on planning to sell one property and having between $200K-250K cash to invest into a rental property and you wondered good areas to invest.

I would look at Grand Rapids, Lansing, and Kalamazoo, Michigan. Try to get as many units in the building as you can.

To Your Success!

Try the University of Michigan Credit Union. They will do one investment property. Not sure how far regionally they lend to but that is one in my area that will do investment property.

Hi Holly from Georgia-

You own a rental in Colorado and you are looking to purchase a new primary residence and possibly use the equity in the rental for the downpayment.

You have two options I am aware of with the rental to access the equity:

1. You can work with a local credit union that does HELOCs, Home Equity Lines of Credit or Loans, on investment property. Most will not do 100% loan-to-value so plan on something less than that for the loan amount.

2. You can do a cash out refinance and pull equity out that way. Look into a DSCR, Debt Service Coverage Ratio, loan where the rental income can be used to qualify the cash out refinance instead of your personal income.

To Your Success!

Hi Martin in Seattle. 

You and your wife are considering a move to be closer to her parents in Scottsdale.

The largest source of liquidity for you is the equity in your home at 1M and you have a 4% mortgage and it will cashflow positive if you rent your home in Seattle.

Your question is should your sell your house in Seattle or rent it. That 4% mortgage is a real asset. We are not likely to see rates that low again in our lifetime. Additionally, the supply of homes for sale is constrained because of this and will be for some time putting upward pressure on prices in most markets.

Thinking about renting your house in Seattle would be wise as someone else will pay the mortgage down, and rents and the value of the property will go up over time. I think your future self will thank you for doing that.

Perhaps take out an equity line of credit in case you need it and using a property manager. You may even be able to use some of your equity as a downpayment on a house in Scottsdale.

To Your Success!

Hi Breeya in Austin Texas-

You are looking for a Title Company to help you with a property in Detroit, Michigan.

Capital Title

https://www.capitaltitle.net/

To Your Success! 

Hi Nicholas from Buffalo Grove, IL!

You are interested in a certain market to use the BRRRR (Buy, Rehab, Rent, Refinance, and Repeat) method to purchase property.

To find these properties, you asked how many Realtors you would contact in that area.

Honestly, most Realtors do not speak investor language and are not investors themselves. What you want is an investor friendly Realtor who is, ideally, an investor themselves which is a very, very small percentage of Realtors.

Yes, you should find an investor friendly Realtor to have on your team. Some ways to find that person is local Real Estate Investor Facebook groups, local Real Estate Investor Associations, Realtors who list multiple properties for other investors, Bigger Pockets website's forum, and local property managers.

You will also want to try to get on the buyer's list for local real estate wholesalers.

To Your Success!

Hi Matt from upstate New York-

You are interested in real estate investing and considering relocating. 

You are particularly interested in short-term and long-term rentals, promising ROI, and locations with a mix of affordability and growth opportunities.

Being willing to move and live in a part of a 1-4 unit property will help you get better financing, for sure, and require less down. This is a great way to go and you can keep buying properties like that every year or so.

Michigan, with it's Great Lakes, has many markets where short-term rentals do well as well as having many affordable markets for long-term rentals, ROI, and growth potential.

To Your Success!

Hi Lina from Texas-

Congratulations on your interest in investing in mid-term rentals and you are wondering how and where to get started.

I get this question frequently from investors.

Sometimes and investor is looking to keep their property cashflow positive as insurance and taxes have squeezed cashflow by turning units into mid-term or short-term rentals.

First off, ideally, the property will cashflow as a long-term rental should something disrupt the mid-term rental model.

You will also want to have the property be near where there would be a demand for mid-term rentals (hospitals, universities, research centers).

Monthly rents for mid-term rentals are about 20% (+/-) higher than unfurnished similar long-term rentals.

There are property managers that will manage mid-term rentals for you and I always advise my clients to use property managers to keep their investment as passive as possible and for compliance issues related to Fair Housing Laws and local regulations.

To Your Success!