All Forum Posts by: Konstantin Ginzburg

@Sharon Supera

If the condition is as bad as you say it is, this will be a problem when you are trying to sell the property and many buyers may ask either for you to make repairs prior to closing, lower the asking price, or provide seller credits for repairs. Selling may wind up costing you a fair amount of extra money as well unless you are willing to be very patient and wait on a buyer willing to purchase at a price you are comfortable with in "as is" condition. The choice to sell vs rent is usually summarized by: do you need the money right now or not? If you do not have an immediate need for a property, then holding the property often makes more sense if you think that the market in that area will continue to appreciate in both home and rent values. 

There is a common saying in real estate: "you make money when you buy, not when you sell". This means that you should have a good idea of what the return on investment will be on a property before you close on the property since making money after the fact becomes far harder. If the property was not a good deal at closing, then there are not many options to turn it into a good deal in a short amount of time. The good news though, is that with real estate; even a bad deal can become good if enough time passes. Both property values and rent tends to go up over time, so given enough time; the property should begin to cash flow if you are willing to keep it and put in the time and effort. If you decide to sell, you may need to be prepared to accept a net loss in the sale. 

@Chase Caudill

Real estate and rental markets can differ greatly based on location. If you are concerned about a 1 bed, 1 bath in your market; then do a search on Zillow or similar platform for rentals similar to yours and track how long they stay on the market for. If these rentals appear to remain listed for months, then this can be a real concern. 

@Matthew Vanhorn

A 1031 exchange can be used to exchange any property for another, regardless of whether it is a good or a bad property. The idea behind a 1031 exchange is to keep the maximum possible proceeds for a home you are selling and sending those proceeds towards the purchase of a replacement property. By using a 1031 exchange, you can keep full proceeds since you are not losing anything to taxes. 

@John Gross

If you are only able to charge one or the other in your market, then I would heavily favor the security deposit. You will not truly get a scope for the repair and cleaning costs needed to turn a property until after someone moves out. If you waive the security deposit, then once that last month goes by and they move out, you will not have much recourse if the price to flip the unit becomes substantial. The security deposit balance should only be refunded once a unit is flipped and ready to rent again. 

@Kiara Spence

There are two steps I would take first. The first is joining a local real estate networking group that is near you. Networking is crucial to success in real estate investing and joining a group like this would give you access to mentors, realtors, financers, ect. They will not only be able to guide you through the process but also provide you with resources to ensure you have a successful journey. 

The next step would be to begin talking with lenders near you and see what kind of lending terms and rates you are able to qualify for. This will give you an idea of what kind of budget you can take on and in turn, give you an idea of the kinds of properties you are currently in position to target. 

@Michael Ashe

A HELOC is one method to acquire property down payments and many have used this method before but I would proceed with caution with this strategy. You will be adding debt on top of debt with this strategy and increasing your expenses due to needing to pay interest on the HELOC. If the numbers make sense and you are getting a good return on your investment on a specific property than go ahead, but it will likely be difficult to find a property with a high enough return on investment to offset both the high interest paid on a current mortgage and the high interest that would be needed for a HELOC.

@Cody Warhurst

If you believe that your numbers work, then you should go on with your plans. The real estate industry now is not the same as it was in the 1970s. There are new challenges that need to be overcome now and the strategies that worked then, likely will not work now but there are still deals that can be found and profit that can be made. 

"Be fearful when others are greedy and to be greedy only when others are fearful" - Warren Buffet

I do like the idea of buying office space in the near future because I believe that will be due a large price correction as interest rates on those loans adjust or balloon payments come due so there may be a lot of future potential to get office space at a discount soon but I don't think we have reached that point yet. 

@Caleb Rehg

Zillow is a good source in my experience but make sure to use rentals that have less than 2-3 weeks on the market. If a rental has been on the market for 1 month or more, they are likely pricing above market rates. 

@Robert Dunbar

I have not personally done this yet but have spoken to many who have. The best advice I have generally gotten from them is to select a property you want to exchange into first before completing the sale of your property since there is a time window to consider in a 1031 exchange. Due to low inventory, it is a lot harder to find a property to buy in the current market while houses for sale tend to get scooped up relatively quicker due to the same low inventory. 

@Estrella Carolina Mckinney

We have some things we do that are similar to your ideas, primarily around offering a unique experience to guests tailored to them and their visit. If we know someone is coming in for a birthday, we are sure to put up some birthday decorations. If they are coming in for a game, we have some gifts related to that game for them. If there is no special occasion and they are just visiting to enjoy the area, we get them local gifts such as a local cake for their stay. 

We are also in the process of coming up with ways to differentiate our listing from others with fun decor choices such as an "instagram wall" which will be a wall filled with Mardi Gras masks (we are in the New Orleans market) that guests can pose in front of. All of this is in addition to making sure we clean the property well and offer all guests a comfortable stay. It has taken the better part of a year to gain traction but we are now consistently getting booked each weekend and getting more and more weekday guests so we are making progress towards our end goal (still have some more to accomplish before we reach that goal).