All Forum Posts by: Ricardo Hidalgo

Does anyone have experience in investing in single family homes? I currently own a duplex and for me to buy another property I need a low down payment. The option my lender is giving me is a owner occupied loan at 5% for a single family home. Please give me constructive advice on investing in single family homes. 

Hi BP,

My name is Wu. New to BP and signed up for Pro membership couple months ago when I decide to buy my first property to house hack.

I have gotten a four unit property built in 1902 under contract. It is two-duplexes on the same lot with a four-car garage. My plan is to house hack in one of the duplexes and rent out the rest. The asking price is $349,000 with property tax around $5400/yr. Property insurance about $250/month. I’m going with 20% down conventional with rate locked at 6.625%. 

 Currently one duplex is rented to section 8 tenants. The rents on the first duplex is $1200 and $1300, could be higher when leases end. The second duplex is currently vacant, the rents could be $1200/unit when fixed up. Based on what I saw on my walk through, the vacant duplex needs a lot of work, such as new roof, windows and siding. I negotiated price down to $319,000. 

So, after the inspection last weekend, we  found there are more water damages to both duplexes because of missing gutters and holes on roof; also, foundation problems and old knob and tube wiring. And garage roof needs replaced as well.

I will definitely go back on the negotiation table and try to get seller credit. My question is should I walk away
from this deal because it has too much problems and too much money to fix it up? 

Any opinion helps! Thank you so much!

Wu

Good Morning BP Fam!

This will be my first BRRRR property, but I was wanting to get some feedback. I met an agent randomly who is also an investor. He showed me a 2 BR 1 BA house in Beacon Hill, San Antonio. PP 196K, saying it needs ~50K rehab, ARV 375K (to me this is high but someone please vouch), average rent ~$1500-1600 per month. I would convert it to a 2 BR 2 BA. Would this be more of a BRRRR or if it doesn't rent out, maybe I could do a fix and flip? What are my possible exit strategies if it doesn't work out? (This is fear kicking in). Deal or no deal? What are your thoughts? Thank you! <3

I have a wide range for how much rental grade rehabs cost. Where are you from, and how much are rental rehabs costing you and your team?

I found a sfh for sale 3/2/2 1250 SF, 40 year old home in decent shape. Its only $140K. Is this a good deal for buy and hold rental?

Price $140K ( its basically rent ready, but may need a little work to get rented - up to $5K budgeted to turn).

Market rent: $1700 ( much more than 1% rule!!)

Expenses: $1200 mortgage (taxes/insurance included) ( 20% down which is $28K, $112 financed at 6.5%), $170 PM fee, $170 cap-ex reserve.  Total exps $1540, so only $160 cash flow. 

Its still tempting because purchase price is so low, but so is cash flow. Are there any benefits to owning a low or no cash flow rental property?

Since I've started getting serious about investing, I've started getting numerous Instagram ads about different companies/opportunities:

HomeRoom, Spartan Investments, Peoples Equity Group, Fundrise are some of them that I just scrolled past just now.

Anyone ever invest with companies like these? If so, what was good or bad? 

For the experienced, what should we be looking for in such investments opportunities? Red flags?

Hi, I am looking to invest in my first buy and hold rental and I am not sure if I should take the traditional or brrrr approach. I certainly see the benefits to the brrrr approach but with no experience I sometimes believe I should take a traditional approach to minimize risk and learn the ins and outs of purchasing, maintaining, and managing a rental home. Any feedback would be greatly appreciated.

Let's say I purchase my first door with a conventional loan. Then to get my 2nd door, is it better to finance with another conventional loan or get a line of credit by borrowing off my first property (then get a line of credit from my 2nd door to put toward my 3rd door and repeat the cycle)? I don't understand the risks involved with either approach to know which is better. Thanks for any insights!

I am currently 20 years old and have been doing a lot of research in regard to Whole Life insurance with the main idea of using it as a savings vehicle and having access to the cash value I can use as a future down payment or whatever I see fit. The 4-5% interest, tax benefits, and having access to that money make it seem like a great investment as I pursue real estate and build wealth. Do you use whole life insurance? Why or why not? Any feedback is greatly appreciated! Thanks! 

I regularly hear people on BP discuss cashflow vs appreciation and which markets deliver on those.  There have seen heated debates in this forum, particularly when the "must have cashflow" people are arguing with those willing to accept negative cashflow in expensive markets.

But how does one identify which markets are "high appreciation" markets?  

In the last 5 years, which do you think had a higher percentage of appreciation?
- Cleveland Ohio or San Diego California?
- Portland Oregon or Memphis Tennessee
- Miami Florida or Indianapolis Indiana?
 - Honolulu Hawaii or El Paso Texas?

Conventional wisdom is that the more expensive markets have higher appreciation opportunity.   If this was your strategy, you were wrong.  In the last 5 years Cleveland beat San Diego, Memphis beat Portland, Indy edged out Miami, and while neither Honolulu or El Paso did well, El Paso did better.  You can see the data for yourself in this Bloomberg article https://www.bloomberg.com/grap...

Look at this graphic in particular.

Now, I'm sure some people will want to focus on the amount of dollar appreciation.  If that is your focus, I must ask you.  Are you better off having 73% appreciation on a $1M home in San Jose California, or 130% appreciation on 10 $100K homes in Dayton Ohio.  The math has the answer.

Just my 2 cents