All Forum Posts by: Ryan Porter

Heck yeah! Congratulations on getting started early in life. I know a lot of us wish we had. I would begin my investor path by attending the local investor meetings. Fill up your CRM with contacts. Local hard money lenders, wholesalers, lenders, all the people. Then look for a slam dunk flip. Something easy, like paint, floors, maybe a roof. Use the bigger pockets flip calculators. Make sure it's a winner, and then do it. Use a partner if you have to. If you have a slam dunk deal, you can usually find someone to partner with. There may even be a hard money lender in your area who works with new investors. Once you finish the flip, you can brrr it or sell it. All the while, build your buyer list in your CRM and start putting deals together. Use your real estate license to help people find flips, then help them sell their flips. 

Figuring out where to start is hard sometimes. Especially when you do not have a steady flow of money to "invest." You have 60k, are adding 12k per year, and want to keep 30k in reserves. So your deal would be around $150,000 home if you did 20% down. Real estate is hyper-local. I would like to see what some of the other areas bring. In the Jackson, MS market, it would get a home that would rent around $1,400 a month. It would appreciate around $500-$1,000 a month. So, you will only make about $200 a month in cash. You can buy another home in two years if you save every penny and add it to your 12k per year. Or, in two years, you can sell your first home, cash in for a profit of $16,800, and pull back your $30k. Now you have $75,000 in two years plus your $30,000 cushion. 

Anything could go wrong with a house in that price range. Usually, they are older, rehabbed homes, which isn't too bad if the right person does the work. The best thing about getting to that $200,000 price range is getting a much newer home with less repair risk. 

Good luck! 

If they appreciate at all, that would make me feel better about the deal. I could see myself paying the above appraisal for a multi-unit quicker than I would an SFR, just because I know I could pay the note with it not being 100% capacity. I like to have two escapes on a property if things go south. One is renting it. That is the goal, of course. Two is selling it. I wouldn't count on being able to sell it for above appraisal. In this case, however, you have option two: lower the rent or have one or two renters who will help with your payment until it's fully rented. I would still want to sell as an option in a year or so. Even if you plan to keep them long-term, having that option is key. So, if they appreciate it at all, I would feel good about it.

Congrats! 

There is a lot of great advice here. I want to throw my thoughts in. I live and work as a broker in Mississippi and specialize in helping out-of-state investors. You can usually make money in rental homes in just about any decent-sized city in the Southeast: Birmingham, Alabama; Little Rock, Arkansas; Jackson, Mississippi; Atlanta, I could go on. What will decide if you will be profitable usually comes down to a few key things.

1. Get a good realtor who can provide accurate rental comps. "I recommend double-checking this with the property manager." Also, find out about the appreciation. Some areas appreciate up to $2000 a month, and some $100 a month. That's a big deal when you sell it in the future. Ensure your real estate agent knows you want a rent-ready home, the rental comps, and an appreciation report with every house they send you. Double-check everything. 

2. Have a rock-solid property manager. One that will help with rental comps and review the home inspections with you before buying the home. 

3. Have that good realtor negotiate any repairs so the home will be "rent-ready" at closing. Have the property manager inspect the repairs and confirm that the home is rent-ready. 

Once you close on the home, there really should not be any surprises. The home should be ready to market, and you should know exactly what to expect in rent. Once the home is rented, everything will depend on the property manager. He will make you or break you. After renting the house, you should be pretty dead on with your Bigger Pockets Rental Calculator Report, which I hope you used before you went under contract.

The two biggest mistakes I see people make when investing out of state is trying to rehab a home and not doing home inspections. I strongly recommend NOT doing that. Either one. First off, trusting contractors from afar is hard. Even if your manager or realtor says they will help or oversee the repairs, just say no. Buy a rent-ready home. Invest that hard-earned money in a lovely home in an area that will appreciate. If you want to brrr a home or flip a house, do it locally so you can monitor everything closely. #fliplocal. The second is to always budget for an inspection and reinspection from a licensed inspector. Get the full report. It is not an "investor-friendly" report. You are investing a LOT of money. Find out everything you need to know about what you are buying. 

I hope this helps; good luck with your first investment! 

Quick tip - Get a nice washer and dryer. Heavy duty, quick cycles. If this is your only one, and you are managing it, laundry has been my biggest headache. 

Use this calculation.   Time + Money = Profit

    How much time will you spend on the reno? How much money will you spend? How much will you profit if all goes to plan? 

    If you are good with what the wholesaler is asking, you have done the homework, and the home fits into your business plan, jump on it! 

    I see what you are asking, though. I think the answer is that some wholesalers are in-tune with the market, and some are idiots. Some overprice, some underprice. I have felt like I have gotten the best of several great wholesalers. I am sure they did well on their end and were happy though. There is no general rule here. Treat every deal open-mindedly. 

 

I have a formula I use just for this. Once you have your finances down and know exactly what you want to profit from, you can ask yourself one simple question. 

Where would I like to go on Vacation? Then research the plane tickets from your closest airport. Or see if a train goes, or how long of a drive. My point is, buy something you can enjoy. I love my "maintenance trips."  

Hey team. I am closing on my first short-term rental in a condo around Orange Beach, AL. in a few weeks. It has excellent reviews and is on iTrip now. I have looked at Vacasa as an option, and it seems they have the booking process down to an art. Both are around the 19% range after you throw in the extra fees. After a few searches here, I see that finding a local PM or sticking it on VRBO myself may be worth the headache. My BP questions are; 1. Does anyone know a local PM in the area? 2. What are the headaches of self-management on an STR?

Hey team! 

      A few years ago a good friend and I went in together and bought a few rental homes. Fast forward 3 years, we are in a position to refi, unload one, and have a hefty down payment for our next project. It ends up, we both have dreamed of having a nice condo on the beach we could visit a few times a year, and possibly make a small profit. We have narrowed our search to the Orange Beach to Pensacola area. Could anyone recommend an agent that is well versed in the condo market and is licensed in both states?

The underwriters would unfortunately apply the lease amount you are now in contract with to your LLC and count that against your DTI, but not give you credit from the income. The STR have that lender downfall. I am waiting out one of my rentals to turn it into a STR after the lease is up and the first tenant is out. That first 1 year lease provided me the immediate DTI gain needed. This has been my experience on a local lender level.