All Forum Posts by: Shervin Golgiri

Are you curious about what Kentucky's real estate market has to offer? 

YES, you can still achieve cash flows of 7% to 10% in the single-family residential (SFR) sector.

If you want to learn more about these opportunities, don't hesitate to reach out. Kentucky's market is one of the few where such profitable returns are still possible.

Shervinrealtor.com

After 2020, we saw a significant rise in home prices and inflation, accelerated by a variety of factors. Many homeowners locked in mortgage rates at historically low levels, between 2.5% and 3%, providing a golden opportunity for those refinancing or purchasing homes at that time. These buyers benefitted from lower monthly payments and avoided the intense competition seen in subsequent years.

As inflation picked up, partly due to increased government spending and monetary policies, interest rates began to rise sharply, reaching around 7.5% to 8% today. This rise in rates is partly aimed at controlling inflation but has also made borrowing more expensive, reducing purchasing power.

Consequently, money is effectively worth less due to inflation, meaning more is needed to purchase the same goods and services as before. This devaluation of currency has pushed many potential first-time homebuyers out of the market, leaving renting as their primary option. This trend suggests a growing rental market as more people are unable to afford buying homes under current economic conditions.
while the housing market may face challenges, the rental market will likely expand as an alternative for those priced out of buying homes.

While it could be argued both ways, I have my doubts if you can hold any money due to termite. 

In the future, conduct more thorough screening and educate your tenants on proper communication practices.

You can't purchase it with an FHA loan, but let's assume you could use any type of financing. I wouldn't recommend a new build home for rental purposes. It's important to take your time with tenant screening and be prepared to manage the property yourself. The location of the property is the most important factor.

Look for properties where you can add value over time and aim for deals that leave you with some equity in the property. Strive to build equity rather than focusing on properties with a narrow cash flow margin. A single maintenance issue could easily turn a positive cash flow into a negative one.

It needs alot of Expertise and Experience, and if you have neither I suggest be very cautious.

I would first make sure to run a detail search on property. make sure you're talking to who the owner actually is. second, I check and see how much equity the homeowner has, and if there are any lien on the property. after you gather all that, then you can have an investor friendly agent help you with drafting a contract. so, you can have a contract in hand but also a Lien on the title, to make sure you're getting paid. 

Are you a contractor as well or just funding the project?

Midwest for sure. I'm agent in  kentucky and california, finding a deal between 7%-10% in single family residential in louisville, Ky is the norm, in california you can expect closer to 3%-4%. 

Location is the key, a lot of investor are learning and getting use to the idea of out of state investing for this exact reason.

Hi Gustavo, it really varries for each person. It depends on what work best for you. 

I personally prefer year lease, for me it makes it easier to manage, Less to deal with. Take your time to place the right tenant, Ideally low maintenance and easy to deal with. 90% of you problem could be avoided by proper screening.

Quote from @Johana Villamil:

Quote from @Shervin Golgiri:

Hi Johana, sorry to hear about your experience. Things going south with GC is more common than  think. 

I would change my tone with the old contractor and notice him in writing he's not welcome back to the property and you are looking into option to hold him accountable. (assuming you don't have a contract, Its unlikely) Make the notice in form of text message, and I suggest you add an family member to the group Text. 

These are expensive lessons and you will gain alot from it. Always have a contract in writing with GC. 

Continue with project and dont let him slow you down more, deal with him along the way. Best of luck,

 Thanks for your reply. I actually did not have a contract in place. I know stupid mistake, I did look into it but never presented it to him as I felt things would continue to move smooth as they were at one point. Also, Im not sure if the contract I have is completely legal and wanted to have it reviewed. If you have used one I would love to take a look at it. I did take your advice and sent him that text. I am moving forward with someone else and I would have to send my old contractor a termination in writing. 

I don't have a contract sample that I can share, but if I was going to need one, I would work on drafting one. 
next time you need help with drafting a contact, reach out to a fellow investor friendly agent in your area and ask for help with drafting one. 
You learn though the ups and down, the key to success in this journey is not to make the same mistake twice. 
best of luck, Johana.

You can't trade Time with interest rate. If the deal is right, go ahead. If interest rate goes down, price will go up, more demand.