All Forum Posts by: Pierce Belton

Personally, depending on your situation, I would start with stuff that is free. Education (on this site) is priceless, and free. Also, try to find some players in your market and see if you can follow them around, answer phones, or do some work for them for free. Education is everything in this business, and it will help you to avoid making very expensive mistakes. My two cents. I am choosing to save up some capital until I can afford to handle mistakes, before I jump into a 6 figure decision. Best of luck!

Hi Pedro,

In my opinion, 20% return on your investment is excellent. But, is the 20% based on your down payment, and the 7% based on your "equity" in the home?

Hi Sara. I'll do my best to try to answer some of your questions, with my limited knowledge. I'll preface this by saying I own a 6 unit building, and I will only speak from experience, and knowledge I've gained.

1. Unfortunately insurance tends to vary a bit (in my experience), and if you need accurate numbers, I would suggest calling for a quote or two. It's based on so many variables that it's difficult to estimate, but insurance agencies will quote you for free, and it usually takes about a 5 minute phone call.

2. I haven't found any great websites to estimate vacancy, but with my rentals I usually find it varies based on market and pricing. You could have 0% vacancy if you rent a place for $5 a month, or 100% vacancy if you list it for $100,000/month! (extreme examples but you get the picture). When analyzing, I typically use 5-10% (depending on the 'class' of neighborhood, normally you'll experience fewer vacancies in a nice neighborhood)

3. This one is too area specific. I would expect a local realtor would be helpful there. The calculator does suggest a number though.

4. I think there's a good book on this https://www.biggerpockets.com/store/flipping-estim... :) 

5. PMI is tricky... typically it's a percentage of the principle, divided by 12. I usually use ( (purchase price - down payment) * 0.0085/12 ) to get a monthly figure, but PMI rates (that 0.85%) vary based on your lender. Ask them what their chart shows for you.

6. For me, I estimate 5% if the property looks to be in good shape, maybe closer to 10% if it looks a bit rough. It's all just guestimation though.

7. 8% is probably okay as a baseline, but I would say alter it based on condition, as above ^, also you can go WAY in depth on this (if you want): https://www.biggerpockets.com/renewsblog/2015/10/1...

8. I don't have enough data to give you good info here, but I typically just put 3% across the board, and estimate 8% for selling costs. I typed those in once from a webinar and have copied them ever since.

I hope some of this was helpful! Let me know if you have other questions I can try to help answer.

Awesome, thanks @Kuba F.!

Thanks @Diane Campochiaro! I appreciate the input. I've been considering (possibly) a direct mail approach or some other way of finding off-market deals. Seems like in this market, most everything on the MLS is pretty bad. Thanks again for your reply :)

Hello everybody,

My name is Pierce, and I'm a newer member of BiggerPockets. I am an (aspiring) buy-and-hold real estate investor, and I'm most interested in the snowball effect of growing a portfolio of cash-flowing properties. 

I currently own a 6 unit building in Redding California where I am from, and intend to house-hack my next purchase here in San Diego. Looking for a 2-4 unit that /would/ cashflow if I weren't living in it. I intend to self-manage, do any type of rehab, and generally learn the business by doing everything myself at least once. I've met with a great realtor, been pre-approved for an FHA loan and evaluate at least one property a day with a spreadsheet I devised. Unfortunately 99.9% of the properties in San Diego are terrible cash-flow investments, but I only need one!

Anyhow, very excited to be a part of this community, and if anyone needs a grunt in San Diego, I'm a hard worker and I love to learn!