All Forum Posts by: Michael K Gallagher

Just found him on tik tok using the hash tag “BiggerPockets” what a Sham. Anyone know if he’s still hold up in Portugal fleeing he’s lawsuits? Going to blowing up his comments so no one else is duped. All are welcome to join!

@Benjamin Kanevsky I'll be an Ohio guy on here and echo what @Remington Lyman said, Columbus is a great place to invest, but in my opinion you will need to alter your search strategy to get a good deal here.  Obviously I am not sure where your criteria came from, but, Central OH is basically built inside or outside the 270 loop.  So if you are outside the loop, or in the burbs that are just inside, where the good schools are, you are competing with people trying to find their primary residence, and the market for good school districts is crazy hot here, so SF houses are going for huge premiums and the top rents in the area just don't support that premium of a price.  

So, the good deals in the area, at least I think, are in small multifamily.  The rents support it better, and they are still very affordable and a large portion of the surrounding downtown area comes with 10-15 year 100% tax abatements.

Now if you go as far out as like Zanesville, or Delaware, or Marysville, honestly I don't know enough about those areas to comment, but you might find better deals in those areas that more closely fit your criteria for a SFR.

If you have questions about a specific area let us know, us "Ohio Guys" are always happy to chat.

Or you know...like @Michael P. said, "stay out, no good deals here"!  
  

Cheers, 

Michael

I wish I would have realized how big of a role the property taxes play in the month to month payment.  Here in Columbus OH, we have many areas of the city that are tax abated.  So if you are flexible in where you want to purchase, you can save yourself hundreds of dollars a month on taxes simply by paying attention to where the property is located.  As an example, my monthly payment (with the same down payment percentage) on a $185K home in Dublin (the burbs) was only about $300 dollars less than my current monthly payment on a $340K house in a tax abated area.

Just a heads up to all those investors in Columbus OH, if you do not already know there is a measure going to city council that there was a community meeting on last night.  The basics of the measure are as follows...

- Landlords will not be able to denny tenants for source of income, so you will be required to accept Section 8, Social Security Etc.

- Landlord will be able to deny them for amount of income, so income multiple may still be used to weed out tenants.  

- There will be a limit on security deposit equal to 1/2 of a months rent.

I'll be calling city council today to express my opinion on the matter, and I encourage any other Cbus Landlords and investors to do the same.  This is one of the best investment cities in the country in my humble opinion and the lawmakers need to hear from the people doing this day in and day out to keep it that way.

Cheers, 

@David Messam I don't think being new will be a hindrance.  If you frame it as you are new when asked and be forthcoming and honest about it, that in itself will go a long way.  If you are worried about them thinking you don't know what you are doing, then look to systems, and expertise of the process to build that trust with the seller.  If you know what you are doing, and know the rules, and follow a real system then I think you'll have better results in the short and long term. If anyone really isn't going to work with you because you are new then you probably don't want to work with them anyway, and come back to them later.  

Cheers and good luck, 

Michael

@Jennifer Horowitz I was thinking about this more, and if that is your goal....to have a multifamily property basically when it is all rented out, be able to pay for itself and a single family home for you...Then you may want to be looking at Tri Plexes and Quads. I'm not sure what your market is, but here in Columbus OH, if you were going to find a deal to do it...you'd have more luck in those ranges. And if your are trying to put the least amount of money down to do it, then you can still get FHA loans up to 4 units.

Hey @Jennifer Horowitz if I am understanding correctly the mortgage on the Duplex would be more than the rental income do I understand that correctly? 

So the way I understand it is that the total gross rent on the duplex would be considered income, but the banks usually only take into account 75% of that income to account for vacancy and the like.  So What you would need to do is find a duplex where 75% of the gross rental income (either of both sides or the one side depending on if you house hack it or not) is more than the mortgage.  That way you have "income" form that property.  Now it will depend on the deal and the property of how much that income is, but yes if the income from the rental does not cover the mortgage then yes you'd have a negative Debt to Income Ratio.

The way it worked for us was that when we moved out of our duplex and got a single family but kept the duplex, because the duplex made money and cash flowed, the mortgage of the duplex basically did not count against us in our debt to income ratio, it was only the new single family we were looking at.  If you are looking for the duplex to generate enough income to not only pay for itself but make you enough money to then buy a single family....I'm not saying it can't work, it obviously can, At least in my market it would just take a really really good deal to make that happen.  But it's obviously possible.

Ok,

So my wife and I just bought a freshly flipped house (again) and I’ve been fixing a lot of really basic stuff, that isn’t a huge deal in the grand scheme of a project, but if I weren’t a decently handy person it would be a huge headache. And I realize that’s what a home warranty is for but I’ve also seen where a lot of home warranties don’t cover “improper installation” which is what all my issues are.

So my question is....would you as a flipper want to know when the people you sold to had these issues? Is it value added or just annoying?

The things are, master bath toilette leaks and I had to reseal it, master bath sink p trap leaks, and before you

Go bananas over “why didn’t you get an inspection” we did but theses issues came up after living in it. kitchen sink not installed with proper clips so the hose pops off...basically a bunch of “oh this little piece I’m left with probably doesn’t matter...”

Anyway, thanks and looking forward to the feedback!

I'll beat the same dead horse that is....if you can make the conventional work do it, its the better option, but if you can't there is nothing wrong at all with FHA, and it's a great tool to get into a House hack. Thats what we did. You can always refi later back to conventional.

I do all of the reading, the looking at deals, the analyzing, but the main reason that my wife and I are in a position to have a duplex and a single family is because of my wife. She is my REI secret weapon. So in order to hopefully help others engage their spouse or partner in REI...below are some key life events and how my wife, and partner, was so key to our success.

1) Bought out first house, sold our first house two years later for a large profit, because my wife works and has such a great income we were able to afford that first house in the burbs. 

2) house in the burbs appreciates in value in 2 years, we sell it, take that money, buy a duplex, house hack it, and drop our living expenses by more than 50%.  The only reason I could house hack the duplex was because my wife was ok enough with the idea of long term wealth and our future, that a couple years in a duplex was worth it to her. She didn't have to really understand or care about the fine details, all she needed to know and be ok with is that living in a duplex would let us cut costs and save more for the future.

3) I was able to start my on LLC. With our costs were so low, because of the house hack, and because my wife still has a great job, last year I was able to start my own LLC and take a risk that, had we not been living in a duplex, I would not have been able to take.

4) My wife literally bought the new house.  We just closed on a single family to be a primary residence, and because my wife has a great W2, and we have income from the duplex, she was able to buy our current home in her own name, and qualify for some credits because my income as a 1099 didn't count.  

Long story short, I would not be where I am currently in life without a key life partner who may not know anything about cash on cash returns, or the BRRRRR method, but she has been the most important part of the investing we've been able to do so far.