All Forum Posts by: Ko Kashiwagi

Hi Nehru,

It sounds like the age-old appreciation vs cash flow scenario here. If you are confident that it will appreciate and the negative cash flow won't risk you at all, it could make sense. 

Is it impossible to find properties cash flowing in the same area? It may take more deal sourcing and offers, but I think it's totally worth it if you can find a better property that both cash flows and appreciates - or breaks even at the least. Also, betting on appreciation for a short span (2 years) sounds too risky, as there's a lot of volatility that can happen in just 2 years.

Hi Grace,

Have you built up equity in your current townhome? You may be able to refinance or use a HELOC to access your equity. This will allow you to obtain cash to put towards a downpayment. Alternatively, have you looked into house-hacking? A common strategy here would be to move out of the townhome -> rent the townhome out -> house-hack and live in a new property with low down payment.

Hi Mary,

To clarify, are you looking to purchase a primary residence that you'll live in, or an investment property that you will rent out? If it's a primary, as long as you are actually moving into it, you can get conventional programs as long as you qualify. If you are self-employed or cannot qualify conventional, you can use non-QM programs. If it's an investment property, the process for buying out of state is pretty similar as in-state. You can use DSCR programs that only looks at your credit and the property itself.

Either way, it will be important to have a high enough credit and down payment to qualify.

Hi Cannen,

Great to see other young aspiring people on this platform! I highly recommend local meetups, as you can meet other investors who have already gone through the wins and losses. It's going to be slightly intimidating to talk to experience professionals at first, but if you put yourself out there and provide value, you will find people going out of their way to help you.

Hi Scott,

The calculation on repairs is very market/property dependent. Are you referring to a cosmetic or a structural repairs? If you want a rule of thumb, I would look at the average price/sqft for the repairs you are looking for in that area - whether it's floors or foundation repairs the prices differ from city to city.

Hi Joseph,

Is there a particular reason you are attracted to this property? As long as you conduct your due-diligence well, this property may be a good cash flow property, but personally there seems to be a lot of risks. Properties built that old typically come with more repairs and cap ex, which can eat away your cash flow.

Major things to look at for would be how recent the plumbing, electrical, HVAC and roof was updated. Getting estimates for insurance before making the purchase is important, as insurance companies typically charge higher prices for properties like this.

Best of Luck!

Hi William,

There's a feature you can use on prop wire to download your leads into a spreadsheet. You can edit the spreadsheet and make a notes column, which is a free way to keep track. Alternatively, you can just create a spreadsheet that only has leads that have potential, and just copy the information/write notes on it.

Podio, Zoho and monday.com are popular CRMs out there.

Hi Wade,

DSCR loans are business-purpose loans that qualifies lenders based on their credit score and rent/debt ratio (rent/PITI). Lenders typically look for a DSCR greater than 1.0, indicating that the property generates enough income to cover its debt payments.

DSCR loans are not just for SFH purchases - it can be used for condo units and multi-family properties as well. For commercial properties, the guidelines usually differ a little bit, but the main concept is the same. It looks at the debt to income such as the NOI/Debt ratio.

Hi Isaiah,

Property deducted expenses from your rental property can reduce the taxable income generated by the property. Buy and hold rental income is generally considered a passive investment income unless you are a real estate professional. Losses from passive activities typically cannot offset active income (W-2). This is a major reason some W-2 employees get into STR, as managing STR could classify you as a real estate professional with enough activity. With that being said, it's probably advisable to use a tax professional on this topic!

Hi Amir,

It seems like the decision would depend on the value of the property and its potential use. Is the property in a condition that can fixed up and rented, or would it be a complete teardown/ground up build? If there's a lot of potential in the land use, you could possibly partner up with a developer.