All Forum Posts by: Alan Brown

wow!  Welcome Ryan... you have the right attitude, that's for sure!  Enjoy... you're already on your way to early retirement!

Big Welcome!  Sounds like you've got a plan... have you made a 5 year plan?  Would be good to identify where you're headed asap so you can start familiarizing yourself with the market there... I know how hard it is to be away from the mountains, and to know that you're only temporary where you are!  Difficult to put down roots but maybe not so tough to find good representatives (realtor, prop manager, etc) where you're headed and maybe invest from afar... Its not easy but it can work!  

good luck!

Grant Boynton, how did you do that so fast?  Last I heard you were in school and just thinking about how to do it!  Congrats!

Wow I just drove through Jersey City for the first time... looks really promising up and coming... are there really affordable rental homes there?  

Hey!  Welcome to BP... you are in the right place!  I wish I had had this resource available to me when I was young and just getting started... Listen to ALL the podcasts... they will fire you up for sure.

You may need to start at the very bottom, depending on what your current skills are, but it will be worth your while if you focus hard on the prize.  I have no Idea how big Marysville is, but if you can find a Realtor that needs an assistant, or a Property Management company... sign on and do whatever is necessary to learn every possible thing you can.  Look for 'meet ups' in your area of Real Estate Investors, and network with them and find out what their suggestions are.  Maybe they need an assistant?  

Once you get a good solid job, start saving for a down payment, and building credit.  The 'forums' at BP will find you answers on ANY possible question you could have.  

When I was renting, I wish I had known about house hacking... best to find a 4 plex if you can, but a duplex will do.  As an owner occupant, You can qualify for this with as little as 3.5% down, or 0 down if you're a Veteran, and if the rents are right, those might cover or partially cover your own rent payment... this means you can save MORE money for future projects.  If you have some experience at that point in managing rentals as your job, a lender will probably allow you to manage your own, or you may have to factor in management fees.  The point is, when you decide to move on, if you've chosen your property well, you could be cash flowing on that, which may cover some portion of your next mortgage payment, and on and on and on!!  With any decent appreciation on the properties, your portfolio can grow exponentially... WHILE paying you dividends in Rent.. it can all snowball fast if you stay focused and true to your path.  

Good luck!

Hey!  a big welcome to BP!  

I've been living in Connecticut the last couple of years working on a couple of projects and commuting to the West...  I recently had to roll money from a 1031 Exchange on a property I sold in Colorado, and I only had 45 days to identify my replacement properties.. so I was scrambling hard!! Being closest to Kingston, NY, and Poughkeepsie, I focused on them to find multi family properties.  There are some out there in your price range for sure...

I really liked Kingston and the waterfront Rondout (sp?)area... I bet you could find something there that doesn't need too much work. The town is definitely coming back, which is what I waas looking for:  something with upside.  But that will provide pressure on prices eventually, obviously.   It seems like there's a community of people from NYC that are looking for affordable places to find a second home, and Bard College up by Rhinebeck supplies art graduates that like the lower prices of Kingston to establish themselves after art school.  Also I guess there's a bus that goes to NYC every day and it's packed with commuters!    

I tend to look for things that do need work so I can get them for less and can value add... 

Poughkeepsie seemed slightly rougher to me, but on one trip there, I got the feeling the town might be coming back.  the walking bridge across the hudson is apparently NY state's most popular state park!! 

Saugerties is pretty sweet, and might be affordable, too.  The town is in good shape, seems family oriented.

I imagine all these places with vibrant boat activity--if I lived in NYC and could afford a boat slip, I'd love to be able to motor (or sail) my boat up to one of these little towns to get away on some weekends!  

good luck!  I might be interested in partnering on something in there, so keep me in mind...

Welcome!

i'm sure you probably are already, but listen to every one of BP's podcasts!  there's a PhD in there somewhere...  and go to meet ups!  the networking is where it's at, to get some mentorship and/or partners!

cheers

What interest rate do you have on that ARM?

For running my numbers, I like to use VMTIM:  

VACANCY( find out what it is in your area--typically 3% to 7%set aside monthly in a decent area), MAINTENANCE (5% set aside monthly)

TAXES,  INSURANCE

and MANAGEMENT, if you're not doing it yourself, which is usually anywhere from 5% to 10% depending on your area.  

don't forget closing costs, 

and be careful not to want the deal too much.  Be COLD to the numbers... make sure you're OVER estimating repairs, and may have pleasant surprises.  DO NOT skimp on inspecting well septic furnace roof and foundation.  Get a flow test, find out how deeep the well is, and get ahold of the drilling records.  I usually have seller pay for septic to be pumped and inspected... be careful, 1/3 an acre is not enough room for a new septic if the field is failing in any way.  Hard to imagine how they got well and septic on the same 1/3 acre lot...Are you sure it's well and septic?   Pick every inspectors brain and make sure you understand those systems... they can take you down.  seriously.  been there!

Late tenant might not be a problem, but if it's easy to rent there, consider a new tenant... especially if you need to get in and upgrade, getting rid of a lousy tenant is a good way... Otherwise, if tenant pays on time most of the time, and is happy there, it might give you a little time to save some capx money.  No point in changing out interior stuff if tenant is happy OR is not timely with rent!!

cheers

I would fully agree with George on that.  It only takes one crazy tenant to tie up a property long enough to lose a lot of money in a difficult eviction state.  I have been lucky that my properties are in Colorado and Idaho, but now I am buying some in KC, MO, which is NOT that friendly and can take a few months to get a snarky tenant out.  I'm hoping my new Property Managers will be up to the task... I've always managed my own before, (even from a very large distance) so wish me luck!

I have to stop managing my own, partly because I tend to be ridiculously nice to my tenants, bending over backwards to keep them happy, so that they will lease again... and like an idiot, I'm always surprised (for some reason) when they find some way to try to screw me!   And thus, the one rule I sadly have had to stick with, is:  when screening tenants, ALWAYS imagine them in the worst possible situation.  How nasty could they become?  Can that ultra sweet person become manipulative?  Litigious?  Whiney?  Look for any kind of signs that might give away these traits... This unfortunately can change your personality a little (or a lot if you let it), because it's a habit that can bleed over into other parts of life and make you cynical.  Still, it has sharpened my radar and saved me from some potentially ruinous renters, like the woman I walked through a mountain property of mine in high heels.  she caught the spikey things in a 3/8" gap in the deck and joked, 'good thing you have insurance"!!  Run Away, Run Away!

I digress.  And sound negative!  Sorry!  I have had mostly neutral and a lot of fabulous tenants, and have prospered well due to them, so it's worth whatever struggle we go through.  I have always avoided CA since I lived there and saw evictions taking 6 months or longer...  (and watched Pacific Heights--DO NOT MISS THIS MOVIE)

As to your choice in WHERE to begin focusing on REI, these are the things I would look at:

Where would you LIKE to live?  I prefer MT, but Spokane has some awesome reasons to be there.

Where would you have the best (or most--or ANY)  job prospects?  A W2 job will help you dramatically in qualifying for conventional loans.  Will make your process much easier, especially at the beginning.  

Demographics.. both have good rental markets and pretty affordable prices... Spokane is a lot larger, which probably means you will have a lot more opportunities to choose from.

one other more minor thing that falls under major due diligence as to picking a market, is how friendly a particular state or town is toward landlords... how long evictions take, for expample, if you plan on renting.  Brandon's book on Low or no money down investing would be great, and, as he is from Washington State, there might be nuggets in there of particular value to you.

Either place, as Pyrrha says, I would highly recommend house hacking to get going... super easy at your age, and an EXCELLENT way to build rental properties at an early age with tiny money down.  When you get closer to building a family, things get a lot more complicated, but if you start now, you'll probably have cash flow and good leverage (not to mention experience) in your pocket.

good luck!