All Forum Posts by: Ramsey Blankenship

 @Bo Kim, 

What specifically do you like about those areas? low vacancies rates? affordable real estate? high equity? ect.   

Thanks for the post

@Jody Schnurrenberger Thank you for answering the question. It sounds like your reasoning is very similar to mine. One place because a familiarity, another because of proximity, and the last out of love for the area. 

@Terry Lao Thank you for that list. I am investing for cash-flow and I know many of the cities on that list are near impossible to find a decent cashflow. I Invest in Multi-Family properties and I am assuming this list from Realtor is describing sales and prices projected to be driven upwards because of an influx of home buyers. 

Thanks for the posts guys! please, if you have commented on this thread, I would love to hear the markets you are researching.

Thanks for the response guys! What are the markets you are researching outside of these? 

I recently moved from Panama City, Fl. to San Diego, Ca.   The real estate dynamic is completely different in Southern California so I am forcing myself to learn market research across the country. I am interested in the Top Three markets any of you are researching right now and why?  Here are my top three:

1.) Panama City, Fl. - Because I am familiar with the area and have a great team of agents, managers, cleaners, and contractors. Problem is, Panama City's market has grown exponentially over the past three years and deals are hard to come by (as I am sure is the case in most cities).

2.) Asheville, NC.  and surrounding areas - I simply love this city. One of my favorite places to visit, so therefor it is a place I would consider retiring. I have 8 years left in the Navy and want to hang up the flip flops and lace up my hiking boots. Asheville is another city that seems to have out priced itself however the surrounding areas have a decent amount of multi family homes. Asheville has a very large shortage of long term rentals, which is great for a landlord, however it has driven prices sky high any where near downtown. If I were to purchase in Asheville, I believe it would be in the surrounding area vs. downtown.

3.) Tucson, Az. - This is simply based on proximity to San Diego. Tucson seems to have ALOT of multi family and I have read articles that claim/prove that Tucson follows the Phoenix rental market. Phoenix has risen over the past three years and Tucson is showing signs of doing the same however the prices are still low. My concern with Tucson is the amount of MF I see for sale. This makes me wonder if vacancy rates are high and the Multi Family space is competitive. 

Essentially my top three are based on - A place I lived, a place I would like to live, and a place close to where I currently live. I am trying to break this mindset and invest in markets that make since financially, rather than proximity.  

Please participate in this conversation regardless of your experience, or even if you don't have three Markets.

Ramsey

Any update to this post? I am looking 10-15 unit complexes in Asheville and have little knowledge of the property management in the area. The last thing I will want is a paper based company as an out of town investor.

Here is the link to the story of my first house hack. It just goes to show that house hacking does not mean you have to "rough it".  We were living in a very nice house with children and dogs. House hack opportunities come in all shapes and sizes and can meet anyones needs.

https://www.biggerpockets.com/blogs/10056/64842-ho...

Enjoy

A house hack does not necessarily mean you are cash flowing while living in the property rather than supplementing your mortgage substantially. For instance, if rent in your area is $1,000 per month, and you can buy a duplex for $200,000 leaving you with a PITI of around $1200 - $1350, you can rent one side for $1,000 and your "rent" (mortgage) is now between $200-$350. You are not cash flowing, however you are supplementing your cost of living in a BIG way. From there, you can save the additional $650-$800 until you have enough to move out of the property into another multi family. This will then allow you to rent both sides of the original duplex for $1,000 giving you a cashflow of $650 - $800 on duplex #1, while house hacking the new unit the same way. The reason house hacking is so nice is because the down payments are MUCH lower when you are purchasing the property as a primary residence. You will need to live in each property for 12 months. Complete enough house hacks to gain enough cashflow where you can truly begin to save money. Once you have this income built up, and are an experienced investor, making the 20% down payments for investment properties is much easier to fathom.

 It truly depends on the market and the property if you can cash flow while house hacking, however if you can cover the majority of your living expenses - that is a success!

Originally posted by @Kevin Scott:

Thanks for the suggestions. Living in it isn't an option.  The hard money lender option keeps coming to mind but I don't know a lot about them.  Does anyone have any thoughts on that option?

Hard money is not a good option for long term financing. You may find someone who will take a lower down payment with Hard Money (its possible) however the interest rate will be nearly double and they will not lend to you for a long term hold. Hard money is a great option for flippers and/or the BRRRR Strategy. The money is available quick and they understand purchasing properties with the intent of fixing them up - where as banks are built for the 95% of people out there simply wanting to buy a property which is livable at its current state. As an investor, you are only allowed to have so many mortgages in your name until the doors to the bank begin to close for government backed lending. This is precisely why hard money exists. Hard money lenders understand that in order for a flipper/investor to grow his business, he needs capital to purchase and repair inventory. They will supply the funds for the purchase price and repairs at a high interest rate, and a short period (often 6-12 months) with a balloon payment at the end or the term. This gives the flipper time to purchase the fixer upper, complete all repairs, sell it for an increased value, and pay off the hard money loan + interest in less than a year. If you intend to perform a BRRRR, you can use hard money to get to the point of refinance in which you would refinance with a convention loan from a bank. The reason this is so crucial, is because with the BRRRR strategy, you can use hard money to Buy a property for cheap, Repair it up nicely, Re tenant it quickly, and Refinance with a bank (often times pulling out cash from your equity if you do it right), and be in the proper zero out of pocket.

If you go with a conventional loan up front, they will require 20% down payment of the "cost" (not to be confused with value). If you refinance with a bank and you have purchased the property with hard or private money, the bank will require you have 20% equity (value) remaining in the property. Example - buy a $100k property for $80k with a conventional loan - Bank requires $16,000 DP

Buy a house for $60k, put $20K in repairs, it appraises for $100K when complete-  you refinance with the bank and they will lend you 80% of the value. The bank gives you an $80k mortgage for a $100k house - you pay off your $80k in hard debt and the house is yours with no out of pocket.   These are very rough numbers and there are fees and interest rates you will have to pay but you get the idea.

lastly, Hard money lenders will want to see a track record. If you don't have one, partner with someone who does and be their boots on the ground. Pay them more than you pay yourself for their mentorship and knowledge. Once you figure it out HMLs will lend to you with your newly developed experience.

Ramsey 

Easy day. PM me and we can exchange contact info

Cara seems to be a wealth of knowledge and likely knows exactly what to do, however; Your a new Landlord. Get used to cutting your loses and pushing forward instead of waisting time looking back. 99% of the time neither person wants to go to court - they simply want to move on with their lives. If they have not been in contact with you, they likely will not call you to recover the rent because they know they left the house a wreck. Or they will call back to recover the rent, and you will have the chance to come to an agreement: they clean the place up and move their stuff out and you pro rate the rent for the overage days, or they leave their stuff and you charge them the months rent and keep the security deposit to cover cleanup and repair. I have had plenty of awkward endings with tenants, and never once did it end in court. Keep the money unless they make it right.