All Forum Posts by: Payton Haight

 @Maria Gabriela Rodriguez you are welcome. If you are looking to go the flip route, make sure you have some buffer in your budget for repairs and factor in holding costs as well. It could work and may be a good learning opportunity, but there isn't a lot of margin if you miss any big items. Could be a back up plan at least. Good luck!

 @Blair Ross Jr hard money is typically for a term of 12 months or less with high interest rates (roughly in the 10%+ range). Typically used for short-term financing while you are rehabbing a property. You would want to get long-term financing on a short-term rental. The rate would depend on how you are purchasing the property (primary residence, investment property loan, DSCR, etc.). I would recommend talking to a lender

That seems reasonable. If guests are staying 3-6 months on average - adding it in as part of your cleaning routine may be the easiest way to do it.

Hi Tyler, what sort of loan product did the lenders quote for you? Is this for primary home loan, investment property loan, vacation home loan, etc.? I have been seeing conventional 30 year mortgage rates for primary homes in the low 7% range (without paying points) so that doesn't seem crazy. Lot of details to consider such as down payment, property use, etc. I would get with a mortgage broker to see what options they may have available.

Hi Chris, 

As someone who currently has a ventless dryer in one of their furnished units, I would recommend putting in a regular 240V vented dryer if you reasonably can. Especially if you plan to hold the property for a while. If it's cost prohibitive, the 120V ventless dryer works but I wouldn't count on any regular maintenance from tenants. If you are doing long-term rentals I wouldn't provide a dryer for a 240V set up in my market. Not providing a dryer for a 120V set up might be trickier since that is less common.

Hi Tamara,

If you were to pay for this deal with cash and we assume that your net income is after all expenses (utilities you are responsible for, taxes, insurance, lawn maintenance, etc.), you are making $27k/year on a $190k investment. A 14% cash on cash return is really good. If you were to finance the deal at a 75% LTV, you could increase your cash on cash returns to 25% to 30%, which is great.

Make sure you are accounting for all potential expenses in your numbers, including vacancy and any loan or hard money costs. If you are confident in your numbers, it looks like this could be a good deal.

Hi Justin, I invest in both real estate and low-cost index funds. Personally, I prefer real estate because I have more control on how my real estate investments perform than I do in the stock market. You can switch strategies to find ways to increase cash flow from properties. For example, converting long-term rentals to mid-term rentals or a rent by the room. There are many ways an operator can pivot to make a deal work. There is not much I can do to prevent the stock market from dropping 20 percent.

Hey Dalton - Awesome, that is a great goal. I wish I was thinking that way when I was 18 (or even 28 for that matter). I would work on increasing your savings as much as possible. I don't know about the prices for 4-plexes in your area, but you are going to want to build up your savings to cover the down payment, closing costs, and inspections in addition to saving a few months of reserves available for when issues come up. 

The easiest way to qualify for a loan is likely going to be if your father can co-sign for you. He would need to qualify for the loan. I would recommend speaking with a few lenders in your area. They can help you understand what is going to be needed to qualify for a loan and they may even be able to recommend other options besides an FHA loan that would work better for your particular situation.

Hi @Songeze Ntsekwa - Do you have any specific areas of real estate investing interest? Long-term rentals, short-term rentals, etc. I really liked 'Real Estate by the Numbers' to help better understand the numbers and calculations to assess deals.

Hi Maria,

I see that you have your refinance interest rate at 5% - how are you planning to refinance to that rate? I have been seeing 30 year loans at 7.5%+ for investment properties (without buying the rate down). If you refi at 7.5%, that would cost ~$274 more per month which would put you negative on the cash flow if you refi at 75% LTV. Depending on the condition of your property and what you are updating with your renovation, you may want to budget slightly more for repairs and capex. Other than those items, looks like reasonable estimates to me. I am assuming that your tenants will be paying all utilities and handling lawn care.

Do you see opportunity for rent growth and/or above average appreciation in this area? If not, you are going to be negative on your cash flow for a while or will need to leave more money in the deal to make it cash flow. Are your hard money loans costs accounted for in the $30k rehab budget? You could potentially flip the property if your all in is $183k and you do not see a lot of long term upside.