All Forum Posts by: Marshall Easlick

Another thing: you probably shouldn't try to negotiate a seller down to one price, have them meet it, and then proceed to  negotiate an even lower price. I just don't think that's how the game is played- it comes off as a little greedy. Imagine if someone did that to you, how would you feel about the deal?

Did you run any numbers on it? My market is in Northern Colorado and it is very common for SFHs to sell for more than asking price - that's just the market. I am not very experienced but, based on what I have read and heard, it's not a big deal as long as your numbers are good. I agree with the downturn sentiment but I don't really have any evidence to base it on, so I am just building capital until a) the market corrects itself (which is not likely to affect my market very much anyway) or b) I have enough money to pull the trigger on something.

In any event, the numbers don't lie. Just don't cut your margins too closely to leave you uncomfortable in case of a down turn.

I'm not a macroeconomist but I think we would have to correlate this metric with other data to really get a good idea if rental vacancy rate is a leading or trailing indicator. How much do you know about economics?

Yeah, I see that too. I think that the increased vacancy rate seen after 2007 was because the real estate investors who owned the rentals weren't educated enough and/or didn't have enough foresight to see that their rents wouldn't cover the mortgage payments after the adjustable rates kicked in. They couldn't afford the houses anymore, so they walked.

https://fred.stlouisfed.org/series/USRVAC

I like this one more because it gives a bigger picture in order to compare the post 2007 bubble-pop to a longer trend.

@Cole Hagen @Karen O. Karen O. brought this up and I am surprised that no one else asked it (or maybe they did and I missed it) but, how long does it take to get vested in your company's 401K? If it takes 6 years to be vested and you don't think that you'll be with the company for 6 years, then contributing to their 401k doesn't mean much.

I worked for an oil and gas company that required 6 years of employment with no more than 6-month gaps in that employment in order to be vested. The oil fields are so cyclical and unpredictable that I knew I would be laid off for more than a 6-month period before I reached that 6 years, so I didn't even bother with their 401k. I now work for a different oil and gas company that only requires 2 years to be vested and I started with them when the oil fields started to recover, so I took the bet. I am currently contributing to their 401k because I think that I will be employed by them for 2 years before I get laid off. I am not maxing out my annual contribution but I am contributing enough to max my company's match (5%) because it's free money that I will probably get and I plan to create a self-directed 401k.

I am sure that you are in a different employment situation than I am but this is how I decide whether or not to contribute to an employer's retirement fund. If there is little possibility that I will get the match money, then I will control my own money for investment. If I will probably see that money one day, then they can control it for now and I will use my 401k for note investing down the road.

I don't have the answer for you but I am interested to know what it is. Based on human nature that people tend to be reactive instead of proactive, I would guess that vacancy rate spikes would be a leading indicator. I would like to hear some input from someone more educated than myself.

@Jay Raught Thank you, Jay!

@Kishore P. WOW! Thank you so much! This is exactly what I needed!

@Jennifer Slaughter I would like to have cash flow AND organic appreciation if I can find it (they aren't mutually exclusive, are they?) but I won't be ready to buy another house for at least another year if I use another bank-funded loan. I work a lot, so my ability to find and close on value add opportunities are limited. I am at a point where I am accumulating capital again, so I have some time to figure out clear cut goals.

This is great! These are all questions and ideas that I couldn't come up with on my own. I don't know why but I have had trouble analyzing my dead end. Thanks again, everyone.

@Jeff Petsche Thanks, Jeff, and thank you for your service in both the military and civilian sectors. I have a lender who is qualified in the VA loan realm and he told me that my best option (assuming that I use him, of course) is to refinance after a year in to a conventional loan. Since he told me this, I am assuming that he knows what the VA requires and that he knows that it is possible. Regarding the multi-unit rentals, that seems to be the next step for me and living in one is totally possible. I would live in a studio apartment if I needed to in order to expand my investing capability. As for the VA loan refunding fee, I paid for that with cash because I don't like to finance money if I don't have to. I am new to real estate investing and I figured that financing $7,500 (roughly) for thirty years was a bad idea since I don't plan to sell the property ever and it would just cost more in the long run.

@John Leavelle John, that's a great point about treating my investing as a business. So far I only have one investment property and I haven't even considered it as a business because I kind of stumbled into buying that house in the first place. I realized how awesome it was to have a roommate give me money every month and I wanted more of that, so I made a goal to buy another house when I had the capital to do so, which was 2.5 years later. I don't know if I have run a proper Cash Flow analysis but this is what I have considered on the rental property: $1,100 mortgage/tax/insurance payment, $30/month HOA, $1,700 per month in rents minus 11% for property management = $1,513. It's a new house, so I don't anticipate much capital expenditure but I did spend $2,600 for an AC unit up front to make it more appealing to renters and so I could charge more for it. I guess I should deduct that from the first year's rents. Frankly, I dove into this head first after doing some basic math and research before I found BiggerPockets, so it's not a perfect investment but it is something.

Thank you both for your interest and help. I really appreciate your time and any advice you have.