All Forum Posts by: Scott Heiman

Thanks all,

I really appreciate the time you've taken to share your experiences with me.

I think Dan is right in the ideal price point for a rental property around/below 160 for cashflow. I think the home my family wants and the house that is going to flow the most cash after we move on may be too far apart.  I am moving soon and will consider staying with family or renting for a few months. I had heard that the oil prices were just now affecting the upper end of the market and the thought was it will hit the market I'm looking at next.   Going the waiting route is tempting and I could use the time to find a deal or distressed home.

Thanks again,

Scott

Thanks for the insights, we had only considered northern sugarland, but I'll mark it off entirely as commute and schools are my top 2 priorities.  We looked at some new construction but I prefer older houses and not being 3 foot away from your neighbors house.

Hello,  

I just received a promotion and am going to be moving from Colorado to Houston in the next month. My job will be in the energy corridor and I'm interested in people's opinions of the suburbs around there. Our goal is to find a SFR to live in for a few years and then rent afterwards we are looking in the 300 and below range. The neighborhoods I have been considering are Katy, Cypress, and Sugarland. With that budget is there any of those neighborgoods that would be a better fit? Also what sort of pitfalls are there in Houston? I have heard don't buy in a flood plain or from KB homes. Thanks in advance for any insights.

Scott

@Bill S. 

Thanks again for all your insights. One of the most appealing things of a buy and hold rental for us in Denver was that if we could of gotten into a property anywhere below market value I felt like there was a lot of potential both in that the vacancy rate is so high right now it would allow us to be pretty selective on a tenant and the appreciation is also there.  

That being said, this is a new venture for me so I want to go into it prepared. What this forum helped me understand is that I haven't really decided on the niche we are going to focus on and I have a lot of options to consider. When I was looking at the financials I realized that I could not get into the type of property that I wanted and still have reserves. Rather than go out and buy a condo investment property now I am further researching the multi-family opportunities and SFR so when when my family is ready to move we can rent our current SFR and then qualify for better loan terms on our next property. Before I commit to buy I need to be more confident in my funds, the market, how to find/identify deals, and how to manage a rental.

Thanks to everyone who took the time to help me out and share their insights and experience with me.  I look forward to continue learning from the community and maybe see some of you at the meetups in the future.

Scott

Hi Brian,

Congrats on landing the deal! It sounds like a great investment.  I've decided that I need to take some time to learn what I am doing and hopefully build a network.   It's good to hear that people are still getting deals. 

Hey Bill,

I appreciate you taking the time to explain it to me.  You are right in the selling at bottom offsetting the selling after flip.  I knew that we were in a very high level of appreciation but not that it was more than 3x the norm for Denver.  I am trying to go into this investment with the mindset that we are making passive income first, gaining equity second, and whatever we get appreciation wise is icing on the cake.  That being said it doesn't work if there aren't renters in the property or rents decrease substantially so I'm nervous to invest in a market at the top which is why I was looking more at condos as they appear to be lagging behind that market.  I have made the decision to invest, but perhaps it is better to work on building a larger downpayment and waiting for the market to come down before investing.  I certainly could use the time to further educate myself!

Scott

Thanks for the response Dan,

When I spoke with my lender about the property being warrantable he said it refers to the number of units being rented being less than 50%.  Seems like this is another strike against condo investment if we are going to have to go under contract without full disclosure. 

Scott

@Dan Mackin Thanks for the insights into HOAs. Are there any tips for researching a HOA rather than just asking the seller? We are still looking for a realtor so researching these opportunities has been a struggle. For one community we were able to find a website that the HOA maintained and they published different information that was helpful but I am having trouble trying to identify if a location is warrantable.

@Bill S. Thanks for the tip on mentioning someone. I was using the app on my phone and it doesn't appear to support the mention function. Once I used my laptop it worked as you described. How much of an impact do you think fix and flips are having on this appreciation and do you think this is higher or lower than in the past? It sounds like you are expecting the condo market to follow the housing market. Even with positive appreciation and a healthy HOA you still wouldn't invest in a condo?

Either way, I am trying to keep an open mind and evaluate properties based on their financials and treat the HOA as another risk to consider. As you and many others have mentioned it seems to be a large risk and I am trying to do everything I can to limit that risk, but at the end of the day a bad HOA is a deal breaker for me.

Scott

Thanks for the information @Dorothy Ma and @Colin Smith !

I appreciate you both taking the time to respond.  An update to my situation: I am probably out of the multifamily consideration based on the 25% down required if we weren't going to move.  

Some of the appeal of condo's and HOA's by association is that they don't appear to have been as impacted by the appreciation in Denver. Because they haven't gone up 15% in the last few years they remain a good price relative to the rent market. So I can get into a condo for 130k and get 1200 rent vs. a single family home being twice that for not twice the rent. I know that the HOAs are cutting into the bottom line, but it also allows me to save on maintenance costs I am saving out.

I guess the question becomes what are you getting out of those HOAs and the increased risk of vacancies being a bit more expensive with another bill. Being as I am just getting started analyzing deals I freely admit I could be looking at this wrong.  I also understand that a single family homes have a better chance at appreciating, but am hesitant to trust the appreciation we have been seeing to continue over the next few years which again takes me back to a safer bet in condos.

Scott

Hi Tyrell,

Thanks for taking the time to reply.  I know I have a bunch to learn but we are excited to find a good investment opportunity.

Scott