All Forum Posts by: Shawn Q.

I have two thoughts - one actionable, and the other personal. The actionable is first - you say you're thinking the market is overheated and primed for a drop, but there are ways to double-check that. If you have a realtor in the area, ask them to check year-over-year change in listing volumes, days on market, and sales prices. If you have a trailing three years of data there you can check it periodically (quarterly?) and see if the market is cooling. I'm sure others can suggest better metrics, but those would be the ones I would initially choose. It seems unlikely we'll see another precipitous market crash, but you can see indicators and exit at that point. You're never going to hit the absolute market peak, but if you follow the numbers and sell when the market is headed towards the top (or has just peaked and is just starting down) you'll likely do Ok. 

The personal thought is to go back to your "why". What part of your overall investing/life goal is this property? Is the cash flow enabling you to enact part of your larger strategy, or would a sale allow you to trade into another property that fits your long-term goals better. $900/mo is great (I'd be ecstatic to clear that on a property!) but if it's not in aid of your larger strategy it's probably time to move on. 

I agree with James as well, but I would add a parallel education track. While you're getting financially ready you'll need to better define your "why" and the strategy you're going to use to get there. For action steps:

• Listen to the Bigger Pockets podcast - download the last 20 and start there, then go back through and listen to them all. This will give you a wealth of information to start with, and provide some of the questions you'll want to ask on the forums. If you're anything like me, this will also help you determine your "why" and strategy through hearing others. 
• Go to every open house. Unless you're getting a second job to repair finances (which could be more important than this point) you need to see as much product in your market as possible. Walk through everything, and talk to the realtors there. This will help you narrow down the housing features are the most impactful in your area, give you a deep sense of your target neighborhoods, and start networking. You can (and should) spend all day Sunday doing this until you have your market cold. 
• Analyze, analyze, analyze. Analyze the open houses, analyze listed rentals, analyze the place you're currently living and your friends are living. This site has great tools for determining if a deal is a deal, so get familiar with the tools and the standards of your market. You may want to execute a single strategy, but your market could be completely unsuited for what you think your initial strategy should be, and you'll need to pivot. Better to know that before you buy your first deal. 

Do this for 3 months and you'll be head and shoulders above other investors and most realtors. If you're diligent it's also likely you'll find a screaming deal along the way. Good luck!

NOTE: I wasn't paid for the shilling for Bigger Pockets, lol!

Installation of permanent cameras might not be allowable (the language of the lease would dictate that) but there are plenty of non-permanent options. A tenant of mine uses Iris from Lowe's and loves it. The cameras are all wireless and nothing is a permanent installation. It's all monitored through an app and I understand it's reasonably inexpensive. 

Can't be too careful!

I would also recommend scouring those listings pretty carefully. I'm sitting in a HUD foreclosure purchase that was listed as a 3 bed/1 bath which is actually a 4 bed/2 bath. Listing errors like that can mean an immediate positive return.

I would do it as well. Disclose it, and include a contingency in the lease document for the first term. 

Unless you think you're below market I can't think of a reason not to sign as long as the prospective tenant is aware of their risk, and you've built in an 'out' in case of closing issues. 

I would do both. Analyze your hundred deals. Focus on your primary residence to BRRRR (2-4 units ideally if you can find it) but analyze everything. Any deals you find that don't fit your BRRRR initial strategic focus you partner with someone experienced on.

What you haven't said is what kind of money and family you have. If you have no money and no family you have great flexibility. If you have some money, even better! 

Starting out in BRRRR you have a huge competitive advantage in HUD homes - I would seriously look into those. Also, now is the time to cash in on any local first-time homebuyer incentives. If you can find a cheap small multi, or a listing error (they exist - my last purchase was a 4 bed/2 bath listed as a 3 bed/1 bath because the realtor never stepped inside it) you can force a huge amount of appreciation in a short time. HUD only requires a year and a day for owner-occupiers, so you can recycle your cash, build equity, cash out, and repeat every year or so - a great way to accelerate your growth. I just wish I had started with that method when I was starting out!

Roger - love the understatement! 

That 10%+ year-over-year change (for the past few years too, if I'm not mistaken) is one of the things that have me worried. Seems like it's like a San Fran market with a ton of money flowing in, and I don't see signs of that stopping anytime soon though a second Amazon headquarters might lessen the upward pressure slightly. It's not restricted by geography in the same way SF is so there's sprawl. I'm definitely looking outskirts, but trying to balance future potential and cost is going to be key - all while still being able to live of course! Moving would be an adjustment from my current 8 minute morning commute. 

Small world! Seems like there's U of I folks darn near everywhere! 

$50K would likely go up with a move, Seattle being the stronger job market, though I doubt I'd be able to hit the equivalent $90K from some of the estimate sites. I'm guessing $70K would be reasonable to expect. That's just W2 income - I wouldn't want to cannibalize my income from my Champaign RE for cost of living. That's why I'm hoping to leverage some built in roommates in the area (assuming I can build up the down payment and they're willing to move). I've been living with roommates and no mortgage for a few years, and I'd plan to execute on that if at all possible. 

I'm considering moving to Seattle (for personal, not investing reasons) but I wouldn't want to abandon RE to do it, and the heat of that market is a bit intimidating. I'm wondering what you all think would be some good areas to watch, websites, etc. to gain basic knowledge of the area with a specific focus on sub-markets that I might want to purchase a home in. 

A little about myself: I'm an investor in Champaign, a college-town market. I own 4 homes and house hack my current residence (which I would hope to continue to do if I move). I don't have the equity to liquidate and buy up to the $500K+ level the market seems to demand, and I am nowhere near a high earner. I make about $50K per year, which is decent in Champaign but seems like a pittance in Seattle. I have a possible pool of up to 5 renters who have moved to the area recently - the friends/personal reasons I mentioned earlier. My tameframe is roughly 6-12 months from beginning of a job search to move I'm assuming.

Any thoughts on where I should focus my efforts in terms of tracking prices, building market knowledge, and learning about market trends? I'd like to remain within at most an hour of downtown (like everyone else it seems). Bonus points for strong nerd (D&D, comic, tabletop, etc.) culture in the area. 

It is generally vastly cheaper to draft the agreement yourself, then have your attorney review and edit (personal example: my lease would have cost about $500 to draft, but I found one, edited it, and had my attorney review for ~$75). If there's nothing on point in the fileplace, just find something close enough and edit. Anything you do incorrectly can be corrected by the attorney, and cut down the time you're charged for.