All Forum Posts by: Tesho Akindele

@Nitin John Abraham I saw all your posts about the investments you've made. What areas in Kansas City have you been buying in? How has your experience been so far? Any lessons learned?

It seems you have quite a few deals under your belt and I would love to hear your insight. I'm also an OOS investor building my portfolio in Kansas City

@Vinny Cristenson I agree with what @Joe Villeneuve said. Live where you want to live, but invest where the numbers make sense.

There are a lot of tools out there to help you get started with OOS investing. First step is to pick a market. Sites like Zillow can give you a great idea of average prices and estimates of rent.

For a more detailed look at cities and neighborhoods you can check out Vestmap. They dive deep in the details of different markets.

Once you picked a market find a good property manager! They will be the key to your success and can usually give helpful info and connect you with other useful resources in their city.

@David A. It seems like the most accurate method would be to estimate the remaining life of each item in the house and budget based on that. The problem is that takes a lot of work and probably isn’t something you can do before making an offer in most cases.

Do you have any methods you use that are more accurate than a percentage, but quicker than going item by other?

@Nathan Gesner I like the idea of going through all the major items in the house one by one and estimating the remaining life span. I also understand how 10% of the rent is a good starting point, but some houses rent for $2500 and others for $500. Most capex expenses are going to be a similar price in both of those houses, so using 10% of rent might be a little bit less accurate. 

How do you guys budget for repairs and capex expenses when estimating cash flow. I have heard people recommend using a percentage of rent but that method doesn't seem practical to me for a variety of reasons. Are there other methods like a fixed dollar amount based on the size of the house, age of the house, etc that you use instead of a percentage of rent?

That's an amazing deal @Russell Holmes, congrats! I love how you and your partner worked out a unique structure and created a win-win situation that left everyone happy. It sounds like this deal is just going to keep getting better with time, and you're in it with no money out of pocket. Lot's of lessons beginning investors can learn from what you did on this one. 

@Shaun Robinson the best tool I found to analyze different markets is Vestmap. They use the DISCERN method to analyze different cities and even neighborhoods.

Demographic Group
Income
Schools
Crime
Expansion (Population & Income Growth)
Rent
Neighborhood (indicator stores along with general research on business in target area)

Vestmap will show you information on all of those factors for every city in the US. The site was created by @Lee Ripma who is an out of state investor herself. This article does a good job of explaining the DISCERN method and other tips for out of state investing. Good luck!

https://www.vestmap.com/discer...

I would say the number one tip to maximize your rental would be to get a good tenant. This is extremely important, and something a lot of new investors underestimate. Getting a tenant who pays on time, treats the place well, and doesn't cause problems can be worth thousands of dollars in the long run!

@Charles Masten my opinion is that when you're just getting started it best to focus on cash flow. Cash flow is real money in your pocket today that you can use to grow your portfolio quickly. You can't tap-in to equity without refinancing, HELOC, or selling. If you buy houses that cash flow well in a market with strong fundamentals you are most likely going to see some appreciation anyways, so it's the best of both worlds.

Hi @Kirsten Crotts

Have you considered investing out of state? There are a ton of markets out there where you can buy a house for around $20k out of pocket. 

If you really want to invest in Western Washington, your best bet may be to partner with someone who has money. Lots of people have money but don't have the time to find or manage deals. If you can find a great deal you can probably find someone who would want to partner with you.