All Forum Posts by: Payton Haight

Hi Timothy, welcome to Biggerpockets! It was a great resource for me as I was getting started (and continues to be). Good questions. See my responses below. Note that I am not a lender, lawyer, or CPA and these answers are based on my experiences.

1) The 'easiest' option with pretty good terms that I have used is an investment property loan with a 20-25% down payment. You would need to be able to cover the loan with your DTI and the loan would be in your name. If you wanted the loan and property to be under an LLC, you could go with a DSCR loan, but I have not found the terms to be as favorable and they can have prepayment penalties. I would not recommend using a HELOC for long-term debt. The rates are variable and generally higher than what you can get with an investment property loan so unless you are planning to pay the HELOC off quickly, there are probably better options.

2) This is up to you. I personally would not delay taking action at this stage to set up an LLC. I have purchased most of my properties in my personal name. If you are concerned about liability, you can increase your insurance policy. Also, if you want to purchase a property under your LLC, you will have more limited lending options. I am sure others will have differing opinions on this.

3) I have used STESSA and it worked quite well for tracking income/expenses, especially with a smaller portfolio. It was linked to my accounts and I just needed to get in once a week to make sure everything was assigned correctly. I also use Buildium for managing my properties. It is a bit expensive, but has worked really well for me. It has a good user-interface for tenants, I collect my rents online through the platform, and it has scaled very easily with my portfolio. If you only plan to purchase 1 or 2 properties, Buildium probably isn't worth the expense.

Feel free to reach out if you have any more questions. Glad to help if I can!

Hi Runbang, make sure you are accounting for CapEx. I assume you are lumping it in with your maintenance (depending on the condition and age of the property, that total number could definitely be higher). Outside of that, I don't believe you are doing anything wrong. As others have mentioned, there are many more factors to consider when evaluating the returns for a residential real estate investment. If you are only comparing the pure cash flow return for a long-term rental purchased at market value and today's interest rates vs. an index fund, I agree the numbers likely don't make sense. Once you start to factor in principal pay down, property appreciation, depreciation benefits, and rent growth over time, the deals start to look significantly better.

Additionally, there are other options to increase your returns such as mid-term or short-term rentals. I have purchased several properties in A and B areas where the cash flow would have been very poor as a long-term rental, but I have been able to get 10%+ returns as a mid-term rentals. These properties are in desirable areas so they have also seen above average appreciation and rent growths. 

I have experience long distance investing before I moved back to Columbus. Iwould be happy to connect with you and answer any questions!

Yes, for sure - send me a message whenever you've got some time. I can show you what I have done and my plans for the property. We should be finishing renovations on my unit in the next month and then will be moving to a live-in flip so we can get this one rented. 

@Charles Masten I am in Columbus and am actively looking for flips in the area. Let's connect. Glad to help if I can and also look at any excess deals you may have.

Congrats @Devan S.! That is a great location. I am not too far from you - also in a house hack duplex in Grandview. I have been very happy with the experience so far. I would be glad to share experiences and/or discuss future plans.