All Forum Posts by: Nicholas L.

@Rodolfo Poe

hello.  have you done this successfully out of state before?  if so, great.  if not, i'd stay local in AZ.

the "all-in" number you threw out will put you well under the median price, and means it will be tough projects in potentially challenging areas.

@Taylor Steenburgen

hello.  i don't invest in STRs myself but i always get nervous when people want to get into them solely to offset taxes.  that by itself doesn't mean you'll be successful and the market is very tough right now.  just throwing that out for consideration.

@Chuck Spradlin

hello. do you already own a primary?  could you house hack?  a house hack is a great way to get started.  but, it is not a good fit for everyone.

the market is tough right now for both primary buyers and investors.  i don't know a lot about you, but i encourage new investors not to buy something just to "do a deal," but to be patient and potentially spend a significant amount of time looking.  if you are putting 20-25% down, that's a huge deal - it's a lot of capital to tie up in something.  a lot of new investors also expect to "cash flow" shortly after buying and this just isn't the way that residential real estate works.  it may take years to genuinely cash flow depending on how you plan to buy.

hope this helps

@Mike Dymski

agree with you and I think different people in different places are focusing on different aspects.

anyone have any predictions about what happens if this continues?

i think population growth may slow more quickly than was anticipated a few years ago.  could that ease demand side?

@Jay Hinrichs

@Marcus Auerbach

@Melissa M Blackwell

i know this isn't what you want to hear, but if you're "using the equity" with a HELOC and then financing the rest, you will likely just lose money, as it will be very difficult to find a property that can support 100% financing.

i would save up more cash first

hope this helps

@Vernon Martin

IMO they're all difficult right now since capital is expensive and that impacts just about every strategy. so i don't think there's an obvious answer.  what are you interested in?  

i'm working on a BRRRR. it's not going to cash flow when i refinance but i will have forced equity and my capital back. seems like your skillset might lend itself to that but i only know what you posted. and again, BRRRR is not a cash flow strategy, it's an equity strategy.

@Blake Armstrong

Hi Blake - I say the following not to discourage you, but to help reset your expectations.  There is no cash flow in long term rentals right now in the short term.  None.

If you want to invest for the long term, which is what a lot of us are doing, that's great.  But, immediately supplementing your income is basically impossible.

Just wanted to cut through the cheerleading to try to help.  I'd be happy to answer any questions you have.

@Sean Poulos

not with a HELOC - a HELOC is for a short term position then a refinance

not commenting on the underlying investment here just the financing

@Dawson Burton

this is a tough question to answer.  cash flow is really tough right now in residential / smaller RE in any market, because prices and interest rates are high.  if you buy a property in all cash, it will cash flow well, but your return won't be that great.  conversely, if you're fully leveraged, you're preserving more of your cash, but you likely won't cash flow... at all.

it also depends on how you're measuring it.  a lot of costs get ignored so that the math looks better than it actually is.  turns out, it's expensive just to transact real estate.  for example, say you buy a property with 25% down, spend $5000 on closing costs, $2500 to spruce it up, then a month's rent to a PM to get it rented out, then a few more repairs that get noticed.  then, the next month your rent is $50 more than your expenses in that specific month. did you 'cash flow' $50?  what about everything you spent to get into the property?  how long will it take to pay that back?

with that said, i have a few properties that break even, and a few that cash flow well... and the ones that cash flow have mortgages with rates in the low 4s.  i'm still buying, i'm just buying for equity right now.

hope this helps

happy to dialogue further

@Jeff Sacco

just curious, do you still have other rentals?  and are you in CT?  i have 1 property in Stamford and looked into Hartford 6+ years ago and decided not to invest there as I'm not local.  i think as with any market you can be successful or unsuccessful there.  

just to be candid, though, it always makes me nervous when someone hears on a podcast about a market and decides to take a look based solely on that.