All Forum Posts by: John Knisely

@Ethan Summers, definitely a decent strategy, Do you find that google streetview is actually current enough? I feel like its hard to see the telltale signs of distress from streetview such as uncut grass, nobody living there, sights, sounds, smells etc. Its a great first step, especially in a market where Google stays current, but I do think the boots on the ground really can make all the difference! 

@Timothy Crawford wow man! You definitely seem to have gotten a great first opportunity in a motivated seller, keep us posted on how it works out for you.

Hey John, first off wow, that list price! I am not used to seeing California prices. What are the approximate rental comps in this area?

Yes, househacking is good idea instead of just straight renting I'd say! As long as the place you buy is reasonable, it gives you some leeway on needing a good deal vs a great deal I think. You'll be there to take care of emergent issues and learn the ins and outs of landlording.

Great that you checked with the city first. Prefab/tiny home is definitely not a bad idea, keep the costs down and the cashflow up if you are planning to live in it. It may actually be a better long term investment to go the traditional home route depending on what your rental market expects though.

@Leann Lilly welcome!  It looks like we are neighbors. You're taking the right first step by educating yourself on Biggerpockets. I'm in a similar situation, working full time while taking action to transition to full time real estate (agent and investor). If there's anything I can help you with in your journey, feel free to reach out to me. Hope to see you around at the networking events!

Tiffany, I can't speak specifically about Raleigh but generally a HML is going to want to see either experience or skin in the game (your cash in the deal), or both. What you're suggesting is neither. Perhaps you can shadow or partner with a more experienced flipper by bringing them a deal, or providing them some sort of value (even if its just labor!)?

@Robert Barnes Seems like a decent buy, not a home run but I've seen worse. Do you plan to refinance out of PMI eventually? What are you including in the $710 a month figure, just PITI? It's good to budget for vacancy, repairs, capex, utilities etc, something I didn't do a great job of when I bought my househack. That's why the 2% rule has a lot of value. For a duplex househack you can use comparable market rent for the side you are living in to estimate total rental income. At 115k acquisition and upfront repairs, you'd need to pull in $2300 a month in rent to hit that 2% rule, so you are about at a 1% rule. There are lots of other variables that these rule of thumbs ignore, such as property taxes varying largely in different part of the country, HOA fees etc.

How are your cash reserves? Right now cash reserves are my saving grace due to unforeseen repairs on my hoarder unit (hard to see underneath all of the junk!).

@Megan Greathouse congrats! You seem infinitely more prepared for your first investment property than I was. Good on you!

Hey Philly area BP'ers,

Wondering if anyone has any experience or recommendations on helping me estimate teardown costs.

House is a brick SFR, small lot, ~900 sqft, 2 floor building, public utilties, mostly gutted inside, 50+ years old (potential to have asbestos removal as an added cost I've been told). This property is in Delaware county. Plan would be to teardown and rebuild new or potentially sell the lot to adjacent lot if the price is right.

Thanks!

@Timothy Crawford this is a great strategy and often can set you apart from the keyboard quarterbacks who are looking to Tim Ferris their way into real estate millions. Nothing wrong with that but sometimes I find that there is no substitute for boots on the ground, meeting with owners.

You'll always find unmotivated sellers in direct mail and in person, the beauty of direct mail is that the effort comes from the owner to contact you, rather than you seeking them out. It's definitely a numbers game with direct mail, so you may have a significantly higher success rate by doorknocking. It will definitely take you more time of course to find properties, track down owners and then give your pitch.

I think there is potential to get more deals this way if you also focus on your "failed" leads as an opportunity to put them to work...give them your card, tell them to contact you if anyone they know is looking to sell. It will grow your network of leads in an area in a way that direct mail might not as its very easy to throw away a postcard.

Nick, my 2 cents on your question from a buy and hold perspective...no, you should avoid ARMs if you can. The fixed interest rate mortgage (especially with the rates we are still seeing these days) is one of the biggest boons of investing.

I'll let someone with more banking experience tackle your other questions.

Hey @Jason Douglas, awesome that you made it here! You're on the right track starting with BP. With an investment property, there really is no "ideal" down payment percentage, it all depends on your situation and your goals. If you believe you have found a home run deal and its worth paying a bit more on the financing to get in ASAP, that could justify a low down payment (rather than waiting to acquire/save personal funds).

Cash for emergencies is ideal. There are simply some expenses you can't easily finance (assuming you want to keep your credit score up), so I am firm believer in having at least 3 months of expenses/reserves (vacancy included) AFTER closing on the house.  I recommend even more if you are a sole income earner and don't have a lot to fall back on (family, spouse etc) financially.