All Forum Posts by: Tina Tsysh

Never Split a Difference! It will change your world. 

The level to which a house should be renovated depends on comps in your market. The goal is to renovate a home and rent it out asap. If you are charging the same rent as the other houses in your area, your house needs to match all the other homes in the area. For example, you can't charge the same rent for a home that has an old kitchen vs the one that has a new kitchen. You also don't want to implement a lot of personal and expensive touches because your home will have the highest rent and it will be harder to rent it out. 

To figure out what your house needs, go walk through a couple of rentals and see what they have / look like inside and try to match that in your own home. 

Hope your property and your renters are okay! I would definitely call your insurance. They might be overwhelmed with calls right now but that would be your best bet. Good luck and stay safe!

I wouldn't want to put everything in one LLC. The point of an LLC is to protect you, as an individual, from potential lawsuits so that the person who is suing you can't come after your personal assets.

Let's say you buy your property in the same LLC as your restaurant. If a tenant sues you for whatever reason, the tenant can potentially go after your restaurant as well even though your restaurant has nothing to do with your rental business.

If you want to have a property in an LLC for legal protection, I would recommend doing it in a separate LLC from your restaurant one.

Hey BP Community! I am curious to hear about your experience with turnkey companies. If you want to invest out of state, what is your opinion on going solo vs partnering with a turnkey company? Let me know your experience!

Congrats on buying your first property! As far as trying to get a commercial loan, a commercial loan is only for properties that have 5+ units. Anything under 5 (SFR, duplex, triplex, fourplex) will require a residential loan. Since you are using the property as an airbnb, you cannot qualify for an FHA loan or any other "homeowner occupied" loans since you are not living there. Your best choice would be to get a conventional loan which is the most common choice for investment properties. This type of loan will require you to have 15-20% of your own equity in the deal.

I am curious to see what other BP members have to say about this! 

It all depends on your risk appetite and many investors don't have the courage to go through with long-distance investing. I would recommend reading David Greene's book "Long-Distance Real Estate Investing" before making any decisions. 

It sounds easy to buy in another market and have your property management do the work and that works for a lot of people. The risk is much greater though - you might get stuck with a horrible property manager or if you are doing any rehab work without being there physically to monitor contractors, the deal can become a disaster. 

I would say that you really have to do your due diligence on the team that you are building. It also might help to have someone you know in that market (or talk to a realtor) to get an opinion on neighborhoods etc. As long as you have a good team in place long-distance real estate investing is amazing!

It depends on which market you want to invest and what your goals are. 

You can buy a SFR and rent out rooms to help you cover the mortgage.

You can buy a duplex and do the same thing - live in one unit and rent out the other. 

In both cases you have someone else helping you pay the mortgage. It all depends on what market you are in, your price point, the deal itself and if numbers make sense, if you want to live with roommates or not, and other factors as well. 

Whichever type of property you choose, SFR or a duplex, it won't matter down the road. Many people start with SFR and then buy duplexes and vice versa. I would see what's available in your market and not exclude either one. For whichever deal numbers make sense, go for it!

In your property's cash flow analysis you should always include some expenses to go towards vacancy, repairs and maintenance. Even though you won't have those cash outflows every month, you should always account for them. Are your total repairs for the year exceed the cash flow you are getting? If so, you might want to do some rehab work and raise rents to get higher cash flows or if you are in the minus for the year on cash flow, you might want to consider selling your properties or doing a 1031 exchange. 

However, remember that with real estate there are a lot more perks than cash flow. There is appreciation, tax deductions, and principal reduction. You have to factor in those benefits as well. Even if you are breaking even on a property in terms of cash flow, you are getting so many additional benefits that in a few years you will become cash flow positive.

You can only get an FHA loan for your primary residence. Unfortunately, if your wife wants to get an investment property, even though she is not on an FHA loan for the house where you live, she cannot get an FHA loan unless you switch the investment property to an "owner occupied" home. How long ago have you purchased the home where you live in now? Have you considered refinancing it so you can use that FHA loan on another home?