All Forum Posts by: Ryan Howell

@Jonathan Polacek - I'm local to the Asheville area. I invest in the area using the BRRRR strategy and I'm an agent that works with other investors, espcially those looking to house hack. I'm not with EXP, but happy to help.

I agree with everyone's statements. My one concern is if spending $2500 is going to leave you without reserves from how your speaking. If you were talking about spending $10k and being low on reserves, I wouldn't be as worried about your reserves, but if $2500 is significantly lowering your reserves, I suspect you may be running pretty lean. Be sure that you have a way to reasonable deal with an emergency issue if it were to arrive, if not in cash, at least with a line of credit or something at a reasonable interest rate. I would hate to see you spend $2500, have a $5k-$10k issue come up and have to pay 20% on a credit card, completely undermining your ROI on the $2500...If you're comfortable with reserves, I think $2500 for a $300/mo return is a great investment.

I would suggest avoiding moving forward with anything with these tenants.  From what I gather, its been ran less like a business in the past and that's what the tenants are used to, which means if you take it over, they will continue with that expectation, whereas it sounds like you want to run this like an actual business (no offense to your family).  It will be tough to overcome those expectations.  I suggest if you get it in your name, to give them notice and get it re-rented at market rent.  In NC there is something called life-estates, a way of holding title.  That might be something to investigate for you and your dad to investigate and make your grandmother more comfortable with deeding it over.

Agreed, your question is very broad.  Start by identifying your goals.  Where do you want to be in 5 or 10 years?  Then start identifying your strengths and weaknesses.  Listen to podcasts and read books on different strategies and you will start to see which strategy best aligns with you.

For me, I want to build wealth through long term appreciation in a sustainable and scalable way, in a market I know. While there are better markets, I invest locally in long term rentals with value add because I feel there will always be demand. I BRRRR because I have limited capital and I want to make it work for me as much as possible. I use a PM because I work a lot and want to focus my efforts on finding the next deal instead of tenant issues. I typically only buy stick built homes 1960s or newer because the maintenance/expenses are more predictable than the older homes. I buy around the Asheville area because I believe it is an area that people love to live and there is enough industry that I feel the market is going to continue to reasonably appreciate long term and I know the market well and I know contractors and subs here. As far as my strengths, I am a numbers person and I had dealt with a live-in flip so rehabs don't scare me.

You can read blogs all day about the best areas to invest.  I would say its easy to get caught up in finding the perfect market instead of getting started.  I would do the first deal within an hour or so of where you live.  Learn from that, adjust your criteria and then decide if you need to find a better market.  Good luck!

Do you plan to continue investing in Clearwater? I'm not a big fan of only having one unit in a town across the country. If you plan to continue investing there, then I would just consider the opportunity costs of holding and BRRRR'ing vs selling and reinvesting. It looks like you may be able to do a cash out refi and still cash flow.

Cash flow depends on how that person is financing the property.  If I bought it for cash, it would cash flow nicely.  While it may not meet your or my criteria, everyone has a different situation and different target returns or reasons for investing.  Perhaps someone has a 1031 with a huge gain and needs to put that money somewhere to avoid a big tax hit or perhaps its someone with high income that just wants to diversify out of the stock market and is okay with the low cap rate compared to the bond market, etc.

I also assume ~10% roughly for capex and maintenance, so you might be low there, depending on condition of your remodel.

Looks reasonable, except for PM...I typically see 10% or $130 in this case, unless your market is significantly lower for PM fees.

I would likely keep the properties in Nashville, refinance out of the FHA and use any cash out towards the next purchase. You likely already have a team in place in Nashville for any work that needs done, except for a PM. I would focus on finding the right PM so you can be hands off. This way all your eggs aren't in the same "basket". You get to diversify across different markets...you can still do FHA/house hack in LA, perhaps just at a lower price point depending on your cash out.

@Andrew B. - You are right, that's why its best to get something documented in writing to protect yourself.