All Forum Posts by: Michael K Gallagher

Hey @Devin Ellinwood welcome to BP and congrats on jumping in!!  I am not too familiar with the RI market as I'm in central Ohio...However, this is a pretty common question I think everyone deals with.  As David Greene has said many times...trying to time the market is a fools errand.  No-one has a crystal ball and no-one can tell you what the market is going to do....if they try to they are either 1) full of SH*T or 2) they are really really high up in the FED and might actually know something so pay attention to them hahaha!  I kid I kid!  

In all seriousness I tend to look at it this way...Real estate can get very competitive, as in "my deal did better than your deal" which is great and usually in good fun, but when starting out really try to focus on if the deal will make your specific situation better.  Will it get you closer to your goals?  will it improve your current situation?  If yes, then I'd say to go for it, of course assuming the numbers make sense.  You said "negative cash flow" I take this to mean that you would still need to pay some portion of the mortgage while you are living in your unit.  That is fairly common, that happened to me with my house hack.  The real question is what will things look like when you move out...if it does not cashflow then I'd say to look elsewhere...while there are reasons and ways to make that work it does not work for my goals.  It might work for yours though.  

I say all that to say, don't buy into the "market dropping" or "market to the moon" hype.  If its a good deal, its a good deal in any market.  And even if you break even, and gain some experience...that could be worth it to you too.  A base hit for your first deal is not only ok...its incredible and you should be proud of that base hit.  Because guess what...99% of people don't even make it to the dugout.

@Neil Adams I am not a flipper, but was just talking to one who operates here in central OH in the Dayton area.  She was telling me that her and her husband both spend a ton of their time looking for auctions and other alternative places to get flipping products.  They have not been able to do it with lumber, but she said that they have purchased a shipping container, and literally are stock piling things because of this reason.  They apparently have all kinds of electrical things, lights, fixtures, plumbing connections, fasteners...like anything they can get their hands on cheap and in bulk through like amazon returns, or auction sites/locations locally they are doing it.  

She even mentioned they are approaching sellers on AliBaba to buy like bulk orders of things directly from the manufacturer.  Obviously this comes with a higher price tag up front...but right now the extra time they are spending on acquiring things is having a huge impact on their margins.   

@Nathan Gesner here in Columbus you do have to register your property as a rental...just with with the owners contact or rental contact info from what I remember.  I don't believe there's a fee associated with it, and you don't need an inspection.  Here it usually feels like the city or local government is always trying to "solve the housing crisis" or whatever, just for the news articles and political postering.  They never actually come up with a solution to deal with the root of the issues, to your point it just inhibits the law abiding citizens from doing what they are already doing. 

Damn @Account Closed woke up and chose chaos!  Love this discussion and thats why BP so amazing! The concept is great and could work fine... everything in real estate is negotiable.  I just think it comes down to how long the client or buyer wants to spend learning, researching, drafting paperwork etc to avoid working with an agent.   If that is the most valuable use of their time to save $15K then by all means!  

@Emanuel Eyssallenne congrats on jumping in! what a huge move! Here in Ohio we don't normally see "due diligence" money just the earnest money so I'm not too familiar with the specifics around getting it returned to you, but in my experience since those issues are now known the seller will need to disclose those issues to anyone else.  So if I'm the seller I'm still going to try and work with you, the deal thats in my hand, given that you know about all the issues. Might be worth a call to the seller once you have the quotes back to discuss how to handle things...perhaps they don't want to price to come down but they'd give you credits or cash at closing for the repairs...depends on their motivation and its usually worth asking.  

Keep us updated on the progress!

Hey @Easton Curtis if you have not done so already I'd take a look at @Mindy Jensen and Josh's book they just put out "First time Home Buyer".  If you have not heard it already their discussion with Jay and Carrol on BPBP was epic!  and so good, for someone in your situation its really worth the mindset shift they discuss.  

Regarding your specific situation.  The buying a property and then moving out of state for your first deal does present some higher risk.  but if you are prepared to deal with that risk through intense property management interviews and systems from the beginning then you should be able to mitigate that risk somewhat.  

Counter to @Jaron Walling 's point of view on the retirement pull, which is still very sound advice on his part so do take that to heart.  However, I myself pulled money out of my retirement to purchase my wife and my first house.  We bought it at the right time in the right area, and were able to sell it 2 years later for a large profit and take that money and put it into a downpayment on our house hack.  So in my situation it worked, and I'm so glad I did it.

Just make sure you understand the implications and lost opportunity cost of pulling that money out, do the math and look at the data and decide for yourself and your specific desires and situation.  Most people will tell you to "never pull out of retirement"...and I get why...but what matters at the end of the day is if the situation works for you and if you are ok with not having those long term returns on that money and are more happy or comfortable or better off with it in real estate...that is completely your decision.

I myself plan to probably never have any kind of real money in the stock market simply because I like real estate better as an asset class...thats just me, and it fits my personality and my goals for myself.  

I'd also say for your first property especially if you are already planning to go FHA, looking at duplexes for a house hack is really really worth it and really can give you some long term power to make some big moves later.

Let us know how it goes! cheers, 

Honestly...I wish I took action sooner...trust the numbers, and trust the process, but if its a good deal don't talk your self out of it.  If you are committed to getting the property..go get it, you've done the homework...and you know where to get the info you'll need later.  Jump in! you got this!

hey @Adriana Vergara I have had this conversation with myself many a many a time!  and there really is no "right" or "wrong".  So I'd attack this with the mindset of trying to make your situation better, and how you go about it just depends on your goals, and your situation and your personality and what you are comfortable with.  

If you otherwise have good credit, and your DTI is the only issue, I'd personally if in your situation, go with knocking off the debt, and buying a property, especially if its a duplex or 4 plex and you're going to house hack it, because then you are literally making money off it so its a good deal all around.

However, and please do your own research, but from my understanding their is language in the stimulus bills that lets you pull out of your retirement and not pay the penalty...again confirm this form yourself but I do remember seeing that.

If you are using the money to pay off your credit cards and just go right back to spending on them...thats a different story, but if you are clearing them off to be able to make moves here in Real estate...to me personally it would be worth it...but again thats just me.     

understood, yeah that makes a ton of sense.  If it is a 1-off its not a big deal but as soon as its every three people yeah that becomes a lot.  Perhaps an opportunity for a "FAQ's" sheet or something to assist until they are more serious or have actually applied?  

@Mindy Jensen let’s go!!! Just became an agent in OH and I am so excited for this!