All Forum Posts by: Paul Bommarito

I found BiggerPockets about 2 years ago. It has been an amazing time learning so much about real estate investing and hearing all of the incredible stories from amazing investors around the world.

In the past 6 months though, I have truly experienced what I feel to be paralysis by information overload. I love the BP podcast, and I also really enjoyed all of the other ones I started listening to (Wheelbarrow Profits, Apartment Building Investing, The RE Syndication Show, etc). However, I found myself constantly struggling with what I should be doing next. There were new amazing guests on each week discussing why they love self storage, mobile home parks, BRRRR single family, senior housing, vacation rental, etc...

I found myself feeling a lot of anxiety and not taking any action. I decided at the end of 2019 that I was going to stop listening to RE podcasts for at least the first 6 months of 2020, and focus on figuring out what my next steps should be in RE that make sense.

So far it has been a great decision for me. I am still reading non RE related books (currently loving the Power of Focus and then onto How to Win Friends and Influence People), but I have felt a lot less distraction/shiny object syndrome, and am working through all my goals for 2020.

I would love to hear other BP members thoughts or feedback on how they handle all of the content out there and what strategies you have found to help you stay focused and not be overwhelmed by all of the different opinions/ideas on REI.

One thing that I have always been curious about and am ashamed to say I haven’t researched at all, is how certain areas in other cities experience incredible revitalizations. Coming from Chicago, the West Loop used to be a very rough areas 8-10 years ago. Today, it is arguably one of the most expensive and highest end areas of Chicago. However, I am very aware that it was a collective effort to bring all the attractive pieces (restaurants, shopping, jobs, etc...). The two aspects of Chicago that I feel are very different in Detroit are public transportation and density.

The L in Chicago is arguably one of the best sources to track development and growth, as investors follow the train stops to new areas after the old one has experienced substantial growth. It connects the city to all of the different regions and makes the city feel more connected IMHO.

On the density side, just from my personal viewpoint, there are so many vacant pieces of land all over the city of Detroit. They exist in Chicago, but certainly to a significantly lower extent.

I am very curious if Detroit has the ability to grow like Chicago. Of course the other massive difference is the diversity and size of employers in Chicago, which I think is absolutely critical to Detroit experiencing continued growth by drawing other industries to the city.

Great thread 

@Account Closed nailed it. My wife and I house hacked, and Brandon Turner’s book on managing rental properties was the the most actionable and hands on book we read. We used a lot of the resources that you get access to in it and took away a ton that we use to this day. 

@Matthew John thank you for sharing! It's a little disheartening to see so much negativity on this post, especially from some more seasoned investors. Matthew is not saying this is a perfect investment or trying to mislead anyone in my opinion, he is just sharing facts from his deal. If it doesn't workout then he has back up strategies. BP to me has always been a warm community that doesn't try to belittle or beat down others for being successful. Just because it hasn't worked for you or maybe you don't love the idea, doesn't mean it can't work for someone else. I appreciate him sharing this as a unique strategy to try to improve his return and provide a cool alternative for people who want to pay less than a hotel and have a different experience. Please keep us updated on how the winter goes and anything else you run into!

@Tom Shallcross that’s awesome that you are doing this. I know a couple individuals that were doing this exactly selling specifically to house hackers. There is a group called X Plus Real Estate who has been specializing in the 2-4 unit brokerage space for the past 6+ years that might be of help to your question. They work with a ton of first time house hackers.

We bought our 4 flat to house hack in Avondale, but it’s a unique property compared to everything we saw because it is 2 front and 2 back so we didn’t have the typical top smaller unit with a pitched roof.

I think it’s tough to say with this as a generalization and very dependent on each situation. I know some people who are just looking to live for less, but still want to be comfortable. And others who are focused on cash flow. Another question buyers like me often thought about is what happens after. If they move out after a year, what will the 3b 2ba rent for? If it’s a good amount less than $1600, it would be tougher on the cash flow. But again, probably very situational on the buyer.

If possible, I would see if you could even try to locate some buyers once you close and have them lined up and hear their thoughts. Not sure if this is possible, but might be worth looking into.

Regardless, the demand for these properties is super high in Chicago so I don’t think you will have a hard time selling a nice rehabbed property, regardless of which direction you go.

@Bud Gaffney there is a lot of great advice in here and congrats on the 4 unit with a clear value-add! The one thing I would say given the timing, and as you already somewhat mentioned, is to try and keep them until early spring before you do anything. I’m not sure how it is in the area, but we experienced a definite slow down in tenant interest in our property in Chicago since it is colder now. It took us about a month and a half to find a tenant for one of our units that became vacant October 1st, and I’m sure it would be even harder now.

Depending on the leases if there are any or if they are month-to-month, we issued brand new leases when we bought our property in August that at least got the current tenants through March. If we decided not to renew their leases or increase rents and they moved, then we would have time to rehab the unit and/or release at a better time of the year.

Definitely agree with the other feedback of fixing up the exterior of the property and showing the new tenants you are going to be a quality landlord that cares about their well being. Having great relationships with your tenants makes life so much easier. Good luck and keep us updated on what you do!

Second @Zachary Kucharek, check out https://www.rentometer.com/, Zillow, Apartments.com, etc... and see if you can find some comps for by the room rents. Sounds like a nice house. I am not familiar with renting by the room though and what other regulations there are around it if any, so I would brush up on that on BP as well and see if there are any local laws to be aware of.

Just realized you did not mention by the room. But you could look at both by itself to one tenant/tenant group/family, and by the room to individual tenants, and see which one would net you more.

@Jonathan Postema
Welcome to BP and congrats on getting started! There are a lot of good questions for you to think about, but I would also encourage you not to get stuck in information overload or analysis paralysis. I struggled with that for a bit and it was holding us back from pulling the trigger. Some questions to think about though:

1. Do you want to do rehabs? Either personally or with a contractor

2. Are you interested in living in the same building as your tenants and house hacking? BP just released The House Hacking strategy book by @Craig Curelop, who is the reason my wife and I bought our 4 unit to house hack

3. How active do you want to be in the investment? Do you want to be a landlord/manage a contractor etc?

4. What is your ultimate goal with REÍ and with that goal in mind, what is the best step for you to get there?

It is very easy to get overwhelmed with all the information out there and different podcasts available. I would encourage you to read Brandon Turner’s book on Rental Properties, which gives a pretty good overview of most investing niches, and then determine what is for you. Feel free to PM me if you want to chat more or meetup for coffee, I am in metro Detroit as well.

@Mike Roy, sorry if my response sounded terse, did not mean for it to sound that way when I read it back. For the listing agent representing both sides, what have you found to be the best way to do that? I have considered it, but have heard mixed reviews about whether agents allow it, the conflict of interest, etc... But it certainly seems attractive to both sides as long as the price negotiation is not too rough. Do I just reach out to the agent listed on the property and ask if they would be willing to do dual representation?

@Mike Roy I specifically stated that I do understand the point of having a good agent. However, this is a situation where I felt it potentially wasn’t necessary to have a good one as we aren’t really looking at something where I think a good agent is required. But yes, I do understand and appreciate what a good agent can bring to the table