All Forum Posts by: Preston Dean

So as of November Fannie Mae is going to allow 5% down on 2-4 unit properties 🙌💯

https://singlefamily.fanniemae.com/media/36841/display?fbclid=IwAR0MoXuGvj6f--gLUcQP2BR61hcK-upNQZidPmVrOxyZoL49qSLvM-yZ244

I am 17 years old i am in Illinois and ready to start wholesaling as soon as i turn 18 i was wanting to get with and talk to some wholesalers that know something that could help me get started as soon as possible. 

I am new to real estate investing, and I have come across the 2% rule. I understand it is much like a litmus test for cash flow and is simply back of the envelope math. However, it seems there is rarely anything that comes close to this rule. So I have a few questions.

1. Is the 2% rule valid in today's market?

2. Is the 2% rule a way to quickly eliminate 95% of property investments allowing one to look at only a handful of deals?

3. Is the 2% rule an upper bound for a range of values? For example, a house's rent should fall between 1%-2% with 1% being a strong "no" and a 2% being a strong "yes".

also sorry if this is the wrong place for this question I am new to the forum.

EDIT: these questions came up after reading Brandon Turners book

Let's say you just completed a renovation project and the appraisal came back higher than you expected for once. You now have an opportunity to pull out a ton of equity with a cash out refi. Would you do this even if it meant the property would be put into a negative cash flow position?

I personally would only put the property into a neutral cash flow position. I don't like the idea of holding any negatively cash flowing properties. I am curious what other BRRRR investors would do in this scenario.

Hello, my name is Alison Olson. I am student looking to get into my first investment deal and plan to house hack in the Minneapolis area. I am looking for advice on how to find nice neighborhoods in or near the city to find appreciation. I am new to investing in real estate and look forward to connecting and receiving advice. As well as recommendations on the size of a first investment property, with 2b/2b or 3b/2b etc. I appreciate any help in advance. Thank you!

Hey all, 

I’ll try and keep this post as concise as I can!

My wife and I bought a townhouse in 2020 with the goal of moving from it and turning it into a rental as quickly as possible!  We were able to do that within about two years and bought ourselves our own single family home in the country for us.

The townhome profits very well and is in a desired area, we love it and plan on holding it forever! You can’t beat a 2.5% interest rate!

The problem is the single family home we have moved to, it was made in the 1950’s and was flipped by some really terrible flippers.  They really put lipstick on a pig and sold it to us and our long time home inspector retired so we didn’t catch the problems ourselves. We’re sitting at 6.78% interest comparatively.

Since moving in, we’ve had to totally repair the custom chimney (a couple of grand), get a new roof (had to get a 26k loan at 10%….. kill me now) and have discovered the crawl space ventilation needs to be addressed, our old cast iron pipes are blocking the plumbing up, and we need to change the pipes from Poly b in some places.  

If we sold the house we’re in for a minor profit, we could cover the costs of my roof loan, selling costs, expenses for fixing it up to sell etc. we’d essentially loose most of our down payment to get out of this deal.  we would have to move back into the town home and start saving again for another day.   that being said, we wouldn’t have the high interest debt and wouldn’t have to worry about paying for all of the big repairs.

We have our first baby on the way and are worried that the house is going to keep giving us problems and become a money pit. Would you keep the SFH with the big loan for the roof and just fix as it goes to hopefully maintain the long term (hoping no more major problems arise) or sell, cut my losses, reduce my high interest debt, and start over.


there’s always more to the story including personal reasons but hopefully this paints a picture, feel free to ask questions so I can clarify!

🙏🏼 
Conner

Hey Bigger Pockets World,

My wife and I recently relocated from MA to SC.  We did a few flips back in MA, some more successful than others but we learned a lot so when we moved here and saw how much cheaper places were we decided to buy a condo for a rental property.

Doing the reno was no problem and the place looks good but now I'm at a stand still with analysis paralysis and fear of getting a bad tenant.

I'm looking for a step by step process on how to get the unit rented.  It's rent ready so now what?  I'm thinking that I need to advertise it obviously, but where and how?  I've seen references to services that will post it to multiple rental sites like Zillow but no actual names of these listing sites.  Next, I believe once I start getting calls, it's a good idea to prescreen potential tenants during the initial conversation but what questions should I ask or what should be said to weed out the bad ones?  Then what about showings, applications, leases, etc, etc?

I'm not particularly tech savy as many of the younger people on here are so I'm hoping for some good advice on where to go and what to do, step by step that will not only help me find a good tenant for my rental unit but also to streamline the application process, back ground check, payment of rent and anything else I should be on the lookout for.

Thanks in advance for any advice and your help is greatly appreciated.