All Forum Posts by: Nicholas L.

@Christopher Rubio

Not sure if the following will be helpful, but here goes.

-You don't have analysis paralysis.  Analysis paralysis was invented by the people selling the things to get the buyers to buy the things.  The market is just terrible right now.  You are rightly being cautious.  Buying a random property just to "do a deal" and lose money would take you backwards, not forwards.

-Out of state BRRRR in the price range you listed is a spectacularly high risk strategy. Unless you have a team in a market that you know well, do not start with this. So many investors in CA have done this and regretted it.

-There is no cash flow now in non value add LTRs.  None.  So if you buy something, you need to expect zero net cash flow for years and years.  You'll be fixing things and putting money in.

-OK, to answer your question.  How did I get started?  I kept a primary residence as a rental.

I hope this helps.  I'm here to help new investors not lose money, not to convince them to "do a deal."  If you do the wrong deal, everyone else will make money, and you will lose money.

@Karan More

i can't tell what you're asking.  are you saying you want to buy a long term rental, and put 10% or less down?  you most likely can't do this.

and, regardless of how much you put down, if you: buy a random property in a market you've never been to, without a team in place, at a price point that is less than the median for that market, you will most likely just lose money.  others will make money (the bank, the agent, the property manager, the contractor); you will lose it.

we see this over and over on BP:

https://www.biggerpockets.com/forums/48/topics/1242392-rough...

https://www.biggerpockets.com/forums/48/topics/1137397-balti...

https://www.biggerpockets.com/forums/432/topics/1231840-sell...

https://www.biggerpockets.com/forums/311/topics/840134-memph...

https://www.biggerpockets.com/forums/963/topics/1195280-expe...

i don't want to sugarcoat this for you.  the market is very tough right now.

hope this helps

@Joseph Bondarenko

can you start with a house hack?  this will not generate cash flow but will build equity.  equity is wealth.

and one thing to note is that long term rentals will not provide income initially.  It typically takes several years for them to be stabilized and actually start generating true income.

hope this helps

@Dominic Emory

you can buy on seller finance if mom owns the properties free and clear.  this seems to achieve part of what you want.  you wouldn't "pay her the rental income" exactly - you'd pay her the mortgage according to the terms of the loan you agreed to.

but this doesn't get you a bunch of cash up front.  and it only works if the properties are entirely free and clear.  if they have loans or liens it doesn't work.

it sounds like what you're saying is she'd gift you one or more properties, you'd refinance, use the proceeds yourself, and just set up some kind of payment back to her.

that is really complicated and you'd want to talk to legal and tax professionals.  it's also highly risky for the mom since the payments / note wouldn't be secured by the real estate.

@Sunil Kale

i would hire an attorney.  not hiring one just to save money seems unwise in the long term.

good luck

@Jessica Yuan

I don't mean the following response to be discouraging... but here goes.  You're trying to math your way to a market, which is understandable given the prices in California, but unfortunately what we see this lead to is investors buying in a random market thousands of miles away, in a challenging neighborhood, without a team that they know in place, and then they just lose money.  And what's the point of doing that?  These properties look like they make money on paper because they're bought with unrealistic assumptions... and then they don't turn out as planned.

https://www.biggerpockets.com/forums/48/topics/1242392-rough...

https://www.biggerpockets.com/forums/48/topics/1137397-balti...

https://www.biggerpockets.com/forums/432/topics/1231840-sell...

https://www.biggerpockets.com/forums/311/topics/840134-memph...

https://www.biggerpockets.com/forums/963/topics/1195280-expe...

If possible, I'd pick a market within a couple of hours of you.  Advantage: you can be there, yourself, in person.  And if you truly can't do that, I'd still pick a market that's closer, where you have family, or went to college in, or vacation in, or hope to move to someday, or are interested in going to.  Basically anything other than a low median home price as the top criterion.

If you're buying a plain long term rental, you are not going to cash flow right away, in any market. Not in Walnut Creek, and not in Scranton.  Just do the math - see how long it will take you just to pay off closing costs if you're "cash flowing" $78 a month.  

I hope this helps.  I'm happy to connect and/or answer any questions you have.  Again, not trying to be discouraging, just trying to protect your capital.

@Becca F.

hi Becca!  i'd go with repairs and prolonging life unless you think a new fence would help you get substantially higher rents.

@Robert Nebel

it's house hacking.

@Cameron Richard

I think CoC is tough to calculate since it's going to vary every year. Right now I'm just looking for deals where I can leave as little as possible in - like a BRRRR where I'm basically buying for closing costs. If I can do that and break even on rent every month, I'm good.

@Andrew Guzman

you'd refinance out of your current loan (assuming you had enough equity) and use a low DP loan again for the next property.