All Forum Posts by: Michael Dumler

@Hassan Ali all great suggestions/input from BP members so far. I would simply add that if you do decide to go the AirBNB route to check your local laws and run your numbers riligiously. I believe Houston does not have a short term rental ordinance in effect, but double check. What is the average vancay rate when it comes to AirBNB in your market for SFH? What percentage fee does AirBNB take for each stay? How much would a cleaning service run? Basic, but imperative analysis that will help in the long run. Best of luck!

@Tom O. congrats on getting under contract. Which market is the property located in? Are both units tenant occupied already? 

1. I would never expect tenants to be responsible for taking care of the yard. Maintenance needs to be budgeted for and run in your analysis. Find a cheap, but reliable service that can run out to the property and handle the lawn. 

2. I would not assign washer/dryer per unit. I lived in a fourplex which had a shared room with only one washer and dryer and we all managed to corporate usage. Come to to think about it though, I have no idea how the electric bill was flipped for that haha, this was in college. 

3. Long term calculations can always be tricky. Will property taxes remain the same or will they creep up over time in your target market? Hard to say. I thought the BP calcs show ten year projections but maybe I'm wrong. Would be interested to hear other BP members and see if they have any resources for this. 

Best of luck! 

@Stephanie Ro I think you're on the right track. Many investors start their portfolio with turn key properties for the simplicity and overall ease of the first deal. It's also a plus that you have identified your target market, Nashville, property type, SFH 1-2 bed/1-2 bath, and budeget, 85-100k. I would take action and start developing your core four (agent, lender, pm, contractor). Continue to network here on BP to assemble your team and other investors will proivide more insight on the market, and what's working for them. Last thing to note, be careful with HOA communities, many have rental restirctions that could therefore limit your investment strategy. Hope this helps.

@Sanjeev Kumar saw a very similar post the other day. From my experience and networking... generally your south east and mid west states posses affordable housing (150-200k) that cash flow. Also, make note of state laws that are landlord favored. Not to be biased, but Georgia is a landlord friendly state that many out of state investors look into. Overall, I think it's extremely important for you to first identify your criteria and then pick your target market. Once you have your market selected, stick to it like a pro. I have worked with several individuals that try to broaden their net by selecting multiple markets. While this may seem beneficial, it's quite counterintuitive and hurts them in the long run. As many other BP enthusiast mention, wherever you invest, it's essential that you form your core four (RE agent, contractor, property manager, lender). Hope this helps.

@Kevin Holt the inspector should be working for you, not the agent. Also, there is nothing wrong with accompanying the inspector for the first hour or so of the inspection. Whenever I tag along for an inspection, I'm always asking questions that are of concern. If the inspector does not allow you to join, that is a red flag to me. After the inspection, the inspector should issue a full report (40+ pages) detailing each major item, he should not just "OK" the property. To keep things simple, most inspectors should have reviews on Yelp or Google. There is also the American Society of Home Inspectors which allows you to search for an inspector in your area. Hope this helps. 

@Abigail Hansen In my opinion, not worth it. There is always the debate of whether or not RE investors should obtain a license. I think unless you're doing multiple transactions a year, it doesn't make much sense. To give you an idea of costs associated with obtaining a license: RE course ~ $500, state and national exam ~ $200, fee to activate license ~ $200, becoming a member of the National Association of Realtors to access contract forms ~ $500 annually. Also, keep in mind commission splits between the brokergae is usually 70/30 or 60/40, you do not pocket it all. Fianlly, the state commission requires you to take continuing education courses throughout  the year. Hopefully this gives you some insight.

@Sam Bedich if you are a responsible spender, then I recommend starting with a secure card. You have the right idea, credit score is one of many variables lenders look at when underwriting a loan for approval. Length of credit history accounts for about 15% of your total credit score. Obviously, pay your credit statement on time. Set up auto pay so you don't even have to worry about it. Research Discover It secure card. Great beginner card to establish credit. Hope this helps. 

@Zachary Bowers congratulations on your first home purchase. I would keep things simple and first speak with your original lender who completed the underwriting. Be aware, most cash-out refinances are limited to 80% of your home's equity. For your situation, I believe a cash-out refinance is more suitable then a HELOC to achieve a better interest rates. Also, take into consideration additional fees and closing costs when refinancing. Best of luck.

@Reda Eldehiry typically, condos are known for not appreciating as much as SFH. Think about it this way, when you purchase a condo, you only own the unit. For a condo purchase, there is no land associated, therefore, value is not as significant as SFH. Also, it's much easier for developers to provide a higher supply of units on a single plot of land, whereas one SFH may take up the same amount of land space.

The most insightful answer I've heard on the future of housing comes from the OG @David Greene. The man really does think a step ahead when a majority of others are in the fear, uncertainty, and doubtful mindset. Essentially, he sums up the likely idea that a wave of tenants/non-homeowners will complain and drive politicians on the issue of rental affordability. For the politicians to keep everyone happy and receive their votes, the government will roll out a massive stimulus into the section eight housing program. Evidently, tenants will remain in their prior housing and landlords will receive the bulk of rent from the government. A win for landlords given they hold the asset, but a loss for tax payers. Thoughts?