All Forum Posts by: Jon Kelly

@Albert Velasquez flip or hold is a personal decision that should be made based on your goals. I would suggest analyzing the property and determining if it meets your COC return or monthly cashflow targets. If it does then keep it as a rental. If it does not then flip it.

You have an opportunity to make $125k+ (assuming $50k in purchasing / selling expenses)... I would exhaust all avenues to come up with the money. Start with local banks or credit unions. You can also seek Hard Money lenders that will provide short-term financing. Tell them your plan to sell the property immediately and they will lend you funds for 3, 6 or 9 months. 

@Tyler Coleman Not sure you need much advice... You're already in a great position. The "emergency" calls will likely be few and far between. You're smart to proactively network with contractors, plumbers, electricians, etc. 

I would also suggest interviewing property management companies in your area JUST IN CASE you become overwhelmed and need to use a professional company. A property manager will handle everything you're currently fearful of. They will also provide you with more time to find your next property and start to scale. 

@Josh M. Utilize free websites that lists apartments in your area... Zillow, Apartments.com, Hotpads, etc. Make sure you're looking at comparable apartments (e.g. # of beds, baths, sq. ft., etc.) 

You may not need to adjust for the noise if you find other apartments in the vicinity because they should also be dealing with the noise issue. You can always start high and decrease your listed rent if you aren't getting any qualified applicants. 

@Ryan Tessier has zero to do with morality... If you feel compelled to help this individual then you should pay for their first month's rent to live somewhere else. 

@Ricardo Hernandez if they’re vacating in one month I wouldn’t bother collecting too much. Signed lease, name and phone number should get you through the next 2 months. Just make sure you communicate via text and/or letter stating you are the new landlord

@James Rohrbach First you have to understand what CAPEX is. These are your larger expenses to upgrade/repair the property such as: roof, HVAC/furnace, siding, windows, plumbing, electrical, etc. If this 5-unit is one building why would your CAPEX need to be per door? You have 1 roof, 1 HVAC/furnace (maybe), 1 property to replace siding.

The answer is 5%. The next question is... is 5% appropriate? You have to factor in the age of the building and the age of all CAPEX items I listed above. Your agent, property manager or contractor can help answer that question.

@Austin Shandley Put this in the BP calculator or any other simple rental property calculator and you'll get your answer right away. You need to include expenses and assumptions for repairs, CAPEX, vacancy, etc.

You tell us if this meets your COC return or monthly cashflow thresholds.

@Brian Simental Go with an LLC if it provides you more comfort. If you keep it in your personal name consider an umbrella insurance policy to cover liability.

Really doesn't matter too much on the first one. Pick whichever is more comfortable for you and your wife and get started. 

@Mike Lettko For what it's worth I don't like option #2. I would treat buying your new home and whatever you choose to do with your existing home as two completely different transactions. It's likely not the financially best decision to buy the $410k home, but you're doing it for other non-financial reasons. Then, I'd look at what to do with your current home (e.g. rent or sell). To make the decision on rent vs. sell you should consider it as if you were buying it today. Would you buy your home for $350k as an investment property? Run the numbers on how it is today. What you bought it for years ago is irrelevant for this decision. 

Option 3 is a great option. You're home is already under contract, so you're halfway there. Now you just need to find an investment property(ies) to start your REI journey!

@Kirolos Michael remove your limiting beliefs and language. Look at all of the words you used... "20 year old," "I doubt I can get a loan," "unfortunately the Nashville market is super hot...," "have been trying..." 

No reason to lead with your age (it doesn't matter if you're 20 or 50). The other stuff are reasons you're trying to convince yourself not to get started. 

I would start by defining what you want to do. Do you want to be an agent, wholesaler, investor, other? 

You have some cash so investor could be a good option. Now consider what kind of investment property do you want to start with? Househack, single-family investment property, multi-family investment property? Then define what price you can buy. Then define the market. Then connect with professionals in your area (probably best to start with an agent).