All Forum Posts by: Ryan Ross

Hi Everyone, I am having some trouble deciding on my criteria so I'd like to hear from the experience community at BiggerPockets. What criteria do you look for in a rental property, and what is your strategy for investing? Some things I've heard as components of criteria: 

- Population growth
- Rent to Income ratios 
- Low crime
- Good schools
- Close to public transportation
- Only in [State]
- Price per square foot

Thanks!

Ryan 

Triathlons (Ironman, Olympic-distance, maybe a sprint here or there), hiking/walking w/ my wife & puppy, reading, cooking, and general learning. I'm also a big fan of excel - so learning new excel formulas is pretty good nerdy fun. 

Welcome! One thing to know when you're starting, make sure you have the math down: Analyze deals, get an idea of what a good price in your area is. Use the calculators on BP. Read things by J. Scott - he is a great numbers guy! 

Hope this helps! 

Ryan

It will probably depend on the loan originator. I would speak with a mortgage agent for this type of situation. 

Hi Kevin, I'm working on similar situations i.e. using an FHA loan to decrease the risk burden at the outset.

Something else I'm considering is the BRRRR strategy. I have not done this myself yet, but this is what I believe the process is. From what I understand (and by the BRRRR definition), you buy, rehab, rent, refinance, repeat.

The critical element here is the refinance. Initially you will be using a "hard money lender", which allows you to take a SHORT TERM loan out for the purchase price + rehab budget. short term = 1 year or so. It will be a high interest rate: 10% or more. Fix it up and get it renting, FAST. Then, get it re-appraised. Because it is fixed up, looking shiny and producing some cash flow, it will hopefully be worth more. Once you have confirmed it is worth more, refinance it. Ideally you'll be able to get a mortgage (long-term loan) with a lower interest rate (perhaps 4%?). But critically, you will get more than you put into your original loan, netting you the difference. 

Let's take your example with a little embellishment; For your $285,000 duplex, you put $20k down and obtain a hard money loan of $300k ($20,000 down + $265,000 loan + $15k in rehabs). You refurbish the home, get it reappraised and it is worth, say, $320,000. Now you can go to a mortgage lender and get a loan for this amount. The mortgage wipes out the hard money loan + the new value of the home, you make $20k in appraisal value. Now you have a cash-flowing asset. 

A high possibility that I am wrong in this description (especially in the last refinancing element), as I am trying to learn by teaching. Even still, do some research on BRRRR method as I believe it holds tremendous value.

Maybe a veteran investor can correct me before I mislead you. 

Cheers,

Ryan

When is the next event on this topic? 

June 5th, 4pm EST, @Marshall Shen and I will be hosting a zoom meetup to discuss creative financing.

We have investors, real estate agents, mortgage brokers and a financial advisor joining us.

It will be 60-minutes, and we will be speaking about how to approach a few different cases, focused on multi-family investing.

Message me if you're interested!

Cheers,

Ryan

Hi Everyone, wanted to share some of the takeaways of a meetup I took part in. I wish I had made less of a derp face for the photo. 

We discussed the markets we were located/interested in investing in (Portland, Chicago and New Jersey), chatted about demographics and where and why populations would be moving in the future, and discussed a few books and media recommendations. We are all starting out in real estate investing, trying to learn more about the industry.

Topline Notes:

• 18-hour cities
• Condo is an apartment that you buy.
• Co-op: one building is one LLC.
• Peter Zeihan books:
  • https://www.amazon.co.uk/Peter-Zeihan/e/B00MPX86VK?ref=sr_ntt_srch_lnk_2&qid=1589040134&sr=1-2
• Upside Book:
  • https://www.amazon.co.uk/Upside-Profiting-Profound-Demographic-Shifts-ebook/dp/B01MU84PK0/ref=sr_1_1?dchild=1&keywords=upside+profiting&qid=1589040191&s=digital-text&sr=1-1
• Documentary Pruitt-Igoe
  • https://en.wikipedia.org/wiki/The_Pruitt-Igoe_Myth

Next time, we will be discussing creative financing,  Or, if you're a veteran and would like to share your wisdom, we would welcome your advice! 

Thanks for @Marshall Shen and Matt Burnham for joining.

I am investing in Jersey City, NJ. 

Next, i'd like to invest in towns that have similar characteristics - income to rent ratios, income to property values, household income, job growth, population growth. 

Anyone know where there is data to find this? 

thanks!

Ryan 

@mike this is a great point:

"I think it's better to take advantage of historic low interest rates that will benefit you for the life of the property than to avoid any potential short term problems you might have. Just to give a little perspective, a half point increase in interest on a $100,000 property over a 30 year loan will cost $10,000 and you'll pay $18,000 more in interest at a 1% higher rate."

How is the San Jose market? 

And, to answer the original questions that @Caleb Bryant asked: 

1. Are you still investing in real estate through the Covid-19 crisis?

I am a new real estate investor, so and I think this is a good time to be looking to buy into the market, later this year. 

2. Why or why not?

I think this is a good time to begin because a) every day is so routine that this is the right time to be making good habits, and for the past 6 weeks i've been waking up and analyzing deals. Also, I get a lot of joy out of the bigger pockets podcast because in hearing the stories of people in the market, I know that once I do build up a portfolio, I get ownership and equity over what i'm doing - that is so satisfying. It is a long game but very rewarding. 

3. What niches are you most focused on and why?

I am focused on Jersey City, NJ. My wife's job has their east coast headquarters there.  I anticipate that supply will go up and housing prices will decrease in the short term. This is already being seen in the Insights put out by bigger pockets. I am also interested in areas around Chicago, which is where my wife's job has their global headquarters, and because my accountability buddy @Marshall Shen is based there, so I learn about the market from him! (Thanks Marshall!). I am also interested in Portland, Oregon. My friend is a property manager there, so he has boots on the ground to let me know what deals are good. 

4. Is that the same focus you had before Covid-19 or not?

No. Until Covid-19, I had not considered real estate. For some reason it seemed too inaccessible - I have no idea why. But I have savings saved up, and as we enter this recession, I expect having liquidity and being able to employ it in something that can make me money, and provide housing for my family, is the best route to take. 

I view this as a lifelong game and developing a network and understanding the market is the most important thing to me. If you're interested in connecting, I'll be hosting virtual zoom calls on a monthly basis for everyone to share what they're seeing in the market and share their experience.