All Forum Posts by: Ryan Mahoney

@Rene Miguel - Just run the numbers and see if it is still a good deal.  Sure higher property taxes do eat into profits, but if there is enough meat on the bone in terms of cash flow and/or potential appreciation than higher property taxes may be just fine.  It's no different than using leverage.  Paying 10% interest and 5 points on hard money may seem ridiculous, but if the deal is good enough than it is simply a cost of doing business.  

@Brian Adzadi makes great points about school districts and safe neighborhoods.  

@John Story When and where is the meetup?

What are you basing your ARV comps on - 2/1's or 3/1's? Is your $650 rent based on a 2/1 or a 3/1? How do you plan to finance the initial purchase and are you looking to BRRRR (Buy, repair, rent, refinance)? Have you had a contractor give you an estimate on repair costs and timeframes or are you doing the work yourself? What class is the neighborhood and what class is the house? Will you self manage or look to have a property management company? Does the market look strong for finding and keeping good tenants?

This could be a good deal or an awful one.  Without knowing more it is hard to say.  Share a little more and I am sure a lot of people on here can give you some more feedback.  

Great that you are running numbers and looking.  Have you ran it through one of the Bigger Pockets Calculators yet?  They are really nice tools.

@Katie Shepard - You do not have to use cash. The problem you may run into with conventional financing the initial purchase with a BRRRR is closing costs. You could have several thousand dollars in closing costs at the purchase then several thousand more dollars again when you refinance and pull your money out. That doesn't mean you can't do things that way but it may be more financially prudent to use private or hard money. The longer you wait to refinance the more congenital financing on the initial purchase may make sense.

Deavin - Welcome to BP!  Do you own a home or rent currently?  @Matthew Irish-Jones gave great advice about something called house-hacking.  This is where, as he stated, you buy a small multi-family and live in one unit and rent the others.  You can live for free or even make money if purchased and rehabbed correctly.  You also get the benefit of using conventional mortgage financing and very small down payments.  I recommend the BP podcasts and The Book on Rental Property Investing by Brandon Turner.  Brandon also co-wrote a recent book with Joshua Dorkin - How to Invest in Real Estate.  Easy reads / listens but great beginner information.  

Good luck on your journey!

@Alana Nevares - check out this blog post 

https://www.biggerpockets.com/blog/rent-to-own-investing

@Louie Masters - I use Pinnacle Bank. I was required to put down 20% as well. If you are making improvements, you can always wait a year or so and either refinance (could be costly) or pull money out via a HELOC if allowed. You can also have several properties spaced over several years where the 5 year lock term comes up each year. For example:

Property A comes up in 2024

Property B comes up in 2025

Property C comes up in 2026 ... etc.

This way each year you could refinance with a new appraisal and 5 years work of mortgage pay-down and probably pull your initial investment cash back out.  Sure you have to front the 20% initially on the first 4-5 properties but as you accumulate more and cash flow increases this will become easier.

Hey @Louie Masters - what are you getting for rent each month now?  I invest in Hastings, NE.

@Brock Best

Great job - looks like a good buy. Do you need to make any updates/repairs to the property? Does the rental demand market look solid for you?

I’m in Hastings, NE by the way. Mostly rent to students from Hastings College here.

I'd echo @Account Closed is also correct concerning plumbing.  I would also check the state of the electrical wiring.  Has it been updated recently or is it knob and tub or aluminum wiring from decades ago?  

I purchased a 100 year old duplex last summer.  Updated roof, plumbing, wiring, and all fixtures and switches.  There is still one bathroom that has some questionable repairs (not done by me) that I will completely redo once vacant.  So far no issues, it is just a half-you know what job that bothers me.  All that said - just be sure you run your numbers with repairs and updates for major systems and budget a little extra for cap-ex and repairs.  If it looks like a good deal after all that it can be a winner.