All Forum Posts by: Nicholas L.

@Scott Trench thanks for this post - great detail.

We've been training to do nothing, right?  Hold stock, continue to stick to the fundamentals in RE.  Now's the test...

@Paul Newman can you post the numbers here?  I wouldn't think a 1% change in rates would kill a deal but who knows. 

@Amery Castaneda we are starting to get into very personal decisions like commuting... if your whole life is in the Bay Area I don't see how you'd house hack in Sacramento.

Unpopular opinion - wait until you have enough saved up to put down 20% on an investment property within driving distance.

@Lynn Tran you may also want property management at some point in the future, which will be 8-12% of gross rents.

@Leandro Gabriel Chavarria you got some great responses, and I'll also add the following from a much bigger picture perspective - I think folks usually have some other income stream on top of their rentals, whether it's a part-time job (theirs or a spouse or a family member); social security (for folks eligible for it); dividends from stocks; something online; etc.  People who have rental income only (after all expenses, as folks have pointed out) and nothing else whatsoever I think is pretty unusual.  For example, for my family, I plan on a combination of part time work, real estate income, and dividends.

@David Urena-Amaro

1: How do taxes work with property?

This varies significantly by state and locality.  You can usually look up what the taxes have been in the past.

2:Where do you recommend picking up a realtors license?

I don't know anything about being a realtor so I'm skipping this one. 

3:What is in your opinion the most minimal risk doing real estate?

House hacking.

@Amery Castaneda are you in a position to house hack?

@Kyle Schroeder these are wildly different markets, and I don't think there's a "best" area in the country without first defining your goals / your criteria / your buy box.  

With that said, if an "investment property" is a simple buy and hold, then these are not thought of typically as the easiest markets to get into.  For example, I don't know anything about the Idaho market, but I suspect the median house price in Boise is >2X what it is in Columbus.

@Rodney Sums interesting variation on the question - this is where something becomes a self-fulfilling prophecy.

So far - here we are in June 2022 - what I am seeing is low inventory still listed at unrealistically high prices... and so yes, there may be "big" price reductions / longer DOM to get those properties to sell, and maybe some sellers will panic list / panic accept an offer.

But, since everything is 2X what it was even 5 years ago, even a "big" reduction may still mean "big" increases for the seller over their buy price once there is an eventual sale.  Every seller's situation will obviously be different.  A 20% reduction would still not turn on-market properties into home run deals for investors.  But I think the media would call that a crash.

@Andrew Postell you seem to be saying that if you're borrowing money, it's not "your" money, and so you're reducing the amount of cash from your own checking account that you need to bring to closing.  Is that accurate?  I think all that @Kevin Sobilo is trying to say is that it still takes money from somewhere to close on a purchase!

(BTW - I've benefited a lot from your posts, and just finished my first BRRRR. Didn't hit it out of the park on the appraisal, but that's fine. Now I know how to make the next one better).

With that said, as I read the forums, I consistently worry that new investors are underestimating the amount of cash it takes to do anything in real estate.  Transacting is expensive. And the tough thing about BRRRR that's never mentioned in the simple examples is that the purchase costs, carrying costs, and refinance costs are non-trivial. You can crush the ARV and still easily have spent $20K+ on fees, points, utilities, insurance, etc. So to truly be out $0 at the end of the day is really, really, tough even on a great deal.

OK - carry on everyone.