All Forum Posts by: Steve Milford

It sounds like to me you are assuming the estimates as golden. My 1st question is, does this property cash flow now, or even close? As you are house hacking it, that would be my first concern before you do the rehab. And a mortgage of $2,900 + $2,200 for additional monthly expenses? What are those other expenses? Plus getting your cash out does not make the rehab self-funding, that is just a way someone has presented it to you to make is sound great. What happens if you can't refinance in the manner that you are hoping for?

If it doesn't cash flow now, what will it take to make it cash flow immediately? If it takes $100k to cash flow now, that's a bit steep imo. What happens if it goes south? If you can answer those questions to your satisfaction then it is may be a good buy.

Maybe he can't read? If he is a good tenant, just buy a window unit and call it good. Having a window unit and paying the energy for it are 2 different things. Then you can mark in as an addendum in the unit's paperwork, that it has working AC and call it good, and then remove the old unit.

I don't push any particular way; you have to do what is right by your comfort level and what you feel is best. If you prefer to pay down HELOC, then do that. Prefer to stock away straight cash then do that. I am currently in debt-pay-down mode right now, and though it doesn't make the "most sense" from a growth perspective, the lower stress and worry has more than made up for any returns I am not getting.

@Erik Donough @Jack Orthman

Jack has it right, do what wealthier do, buy for cash flow, with leverage to build a nest egg to do it again and again.

@Bonnie Low Make it easier on yourself. Find out how much homes in area rent for and how much pet rent is. I.e. rent 1500, pet rent $25 per pet; most will have 2, dog+cat or 2 dogs etc. Now make your rent $1,550, and forget "pet rent"; yet charge for pet deposit, exclude breed per insurance and local regs/hoa, and just accept that you will put in new floors when they move out (don't put in super nice floors in the first place).

@Jonathan Hasan

By trial, either on the job or in own projects. Try something, and keep meticulous records regarding time and materials. If you tell someone you can build their fence for $1,000 and it actually cost you $1,200, you can learn how to estimate better AND learn how to build processes to cover overages. Sometimes you make money, sometimes you lose, you just have to be net positive in the end.

@Sandra Regnell

I am a Realtor, licensed both OR & WA, though I didn't become one for a job, but to built a portfolio and learn the business. I am a little different than most Realtors you meet; I have no problem advocating walking away for a deal if it turns unfavorable. Feel free to connect.

@Kelly Beasley

Buy the property with an exit in mind. If you want to buy and hold, buy for that reason, if you want to flip, buy for that. There is no 100% assurance, and you have to be confident in this risk. I encourage people to evaluate based on other investments; i.e. if you invested $50k in a growth stock there is similar risk though more liquidity, though not as much fun.

@Kelly Beasley

Put it all in writing and find answers to the what if questions now. I am not against partnerships but I find that most don't come with fair expectations. I treat time as money to equalize things, not %'s. Last venture I proposed, "my partner" was saying they would help me with labor. When I started hashing through a potential schedule, the message I received was "I can help, but you would be doing most the work." Originally I was thinking we split profits, but obviously that is off the table since there is different work loads. If I put up majority of capital where is the win of a partnership? To me, the less the partner has skin in the transaction, the less their reward should be.

The principles that apply to 1 market apply to others. As others have stated, learn landlord laws, costs, and responsibilities. Regarding property management, either you pay for services on your behalf, or you do it yourself. As you might find or hear, the best deals are those that you purchase right. What does that mean? To everyone that is different. To me it means, if I forecast through a classic SWOT 1 year into the future and I might think, "I should have acted", then it is a good deal. Yes hindsight is 20/20, but knowing features about a particular market, and neighborhoods, allow me to think about those issues. And that is why I stay local. I "know" this market. I also see opportunity where others I meet, cringe.

Plus, I like to touch and feel the properties and work through issues as they come, versus hand off that task to others. I have friends that invest long-distance, and I am not happy with the results they tell me about, lol. 

Applicable rents for the property you hold is in the eye of the beholder. From a straight purchase perspective it might not work out initially; though if used as a vehicle for creative financing in the future, rents collected might make sense. This business is not all gravy, with great potential there is also lots of risk. Yes problems come up; lol with renters, they might become very hard to work with. Key is to know "the numbers" like the back of your hand. If you are not comfortable with that, go through the real estimation process of a property you see, watch it, and gauge if your guesstimate is close to reality. I have invested in properties where others have told me to run, yet have worked out for me. I have also made decisions that weren't the best, though they taught me to be better. Each person in different. The point is just to get into the game somewhere. The possibilities are endless. 

I am learning all the time. Most recently, I stumbled upon someone whom had structured their business in a way I have never seen before. Talk about an eye-opener - yet it was great. We worked with and learned from each other. Again the possibilities are endless.