All Forum Posts by: Kevin McGuire

@John Reardon when you speak of negative cash flow are you accounting for the rent you would be saving that’s now going into the mortgage? I think you need to factor in the financial value of house hacking versus renting and buying elsewhere. That way you can do a straight up apples to apples comparison of investments. That is, separate out:

1) Where you want to live (San Diego)

2) Where you want to invest (could be anywhere in the US)

3) Whether that investment makes sense for your investment goals.

All investment decisions are choices between alternatives with differing cost/benefit/risk. Clarity of goal and personal investment strategy helps reduce the confusing array of choices which cause us to freeze up.

Finally, if you manage the downside risk (e.g. don’t get overly leveraged) then there’s no bad choice just alternatives where some are better, as long as you can choose your exit versus having it forced upon you.

Best of luck!

@Terrell Garren fantastic 😀

It hurts my eyes!

But this thread is also a great example of this:

https://en.m.wikipedia.org/wiki/Law_of_triviality

:)

According to

https://www.warealtor.org/resources/media/REmagazi...

"WUCIOA replaces the Condominium Acts (both of them), the Homeowner Association Act and the Land Development Act but it ONLY impacts communities with CC&Rs that were recorded AFTER July 1, 2018. If an association’s CC&Rs were recorded prior to July 1, 2018, the association is NOT a Common Interest Community (“CIC”) as that term is created and defined by WUCIOA"

which jives with what Robert said.

@David Maradiaga Same, although I use Microsoft OneDrive and the office apps. I put everything in there: a folder for each property, sub folders for original listing, signed contract and closing documents, leases, property bills...

I bought a duplex scanner with a document feeder so when I get paper I drop it in, scan, then shred the paper.

I was using spreadsheets for expenses and revenue but recently switched to QuickBooks Online.

@Sean Lasher thanks!

"How do you find historical price appreciation numbers for a given county?"

I thought, "What a great question!".

He is considering buying a house for his sister and wants a sense of possible appreciation over time. He's asking purely for financial planning, it won't affect his choice.

Thanks in advance.

@James Dainard Thanks in advance for putting this together.

@Joel Arndt The numbers looked legit to me, I toured the property with my agent and spoke with the seller. I thought the maintenance allocation was low but when I toured it I saw why: they had somewhat recently renovated the place to purpose built it into student housing. There were two units, upper and lower, each with their own hvac etc. The sellers were a duo where one was a contractor and the other a real estate agent. My impression was that the sellers know what they're doing. They had all the paperwork for the reno which they were willing to share once under contract. This wasn't their first student reno.

If you wanted good cash flow, it was turn-key. I toured it because I was interested in how they did it. It was smart.

I think the problem with the place is that most people don't have the stomach, as you say. You walk in there and it's a rat warren of dudes watching streaming video games with recycling piled up on the counter tops. There were more TVs per square foot than a Best Buy. I viewed the washrooms from the hall and sprayed myself down with Lysol afterwards. I wanted to give them some pro tips that if they wanted to get girlfriends they'd need to clean the place up. 

Like you said, I'd only do it with a property manager.

One reason it might not have sold is that the cost per square foot is high for the area. SFH's of that size in the area were more like $500. I think the price makes sense when you consider the work they did to turn it into a duplex of student housing, and when you look at the cash flow. Ultimately at that point it's value is the cash flow so the comparables aren't other SFHs, it's other student housing. And there-in is the challenge as a seller: the market for this kind of property is small, and most buyers either can't wrap their head around the investment or don't want the hassle of students.

Summary:

- Awesome cash flow

- Valuation based on cash flow

- Management hassle

- Difficult to unload

@Edlen O., what @James Edgar said :)

On the student housing front, Ottawa has two universities and a college so lots of student housing needs. I did some investigation recently and they cash flowed better than a SFH. Here's one I happen to have their numbers on. I see the listing has since been cancelled but it'll give you an idea:

34 Westwood Dr

MLS 1130159

Asking: 699,880.

Annual gross income $63,420.

Cash flow $50,827

Operating expenses: $12,593 as follows:

Property Taxes  $4,123 

Insurance   $2,201 

Water/sewer   $1,184 

Heating   $773 

Hydro   $2,859 

Lawn   $875 

Maintenance   $578