All Forum Posts by: Tina Tsysh

Great advice, thank you for sharing! What are some good questions to ask a real estate agent? Obviously a potential buyer would be interviewing a few agents, so trying to make your interview as efficient and concise as possible to respect the agent's time is important. Let me know if you have any tips! 

I would recommend to invest the money into a good lease agreement because that can make your life as a landlord a living heaven or hell. A good lease is everything! Don't be cheap at the beginning because later it will bite you. Also discuss with the attorney all the things you want in the lease - from late fees to house rules. Think of paying the money as an investment that will save you thousands of dollars down the line. 

Unless you have a team in other markets, long-distance investing can become a huge headache and will make you never want to invest in real estate. Especially if you doing rehabs, you will need to monitor your contractors' work and that might be hard if you live far. I agree with what @Colleen F. said. Buy where you live now and see how that goes. Talk to your local realtors and see what they think of the market. Ask them where they see investors buying. When it comes time to move, you can always keep that first property as your rental and use the build up equity to put down on another property! 

Congratulations on beginning your real estate journey! The general advice is that leverage is your friend (if used wisely). You usually achieve much higher returns with leverage because you use less of your own money. The money that you don't use, you can leverage and put down towards other investments. 

Instead of having $250k locked in a house (if you buy using zero leverage), you can't do much else with that money unless you refinance it (in your situation you said you are self employed so you can't get traditional financing). I would recommend leveraging money with your wealth management company because 4% is not terrible (although you can try to negotiate it down to a 3 or 3.5%). In this case, let's say you put down $25k for a down payment and get the other $225k financed with your wealth manager. This will allow you to invest that $225k at a much higher return than 4% (whether it be in stocks or real estate) and grow your money faster. You can even buy more than 1 house and have other properties as your rentals and build your wealth that way. 

In my experience, local banks will typically have more favorable terms BUT it is worth it so give a call / send an email to 10-15 lenders in your area (have a mix of both institutional banks and local credit unions) and ask them what kind of terms you can get given your goal. Not everyone might get back you, but you should get 3-4 options to pick from. By having options (rather than only going to 1 bank) you get more negotiating power in the process. Remember that you are the customer and they want your business. 

The type of you loan you can get depends on your occupation (self employed vs W-2 job), your income, and how much debt you have. Lenders will typically tell you which one you can get approved for the easiest, but without knowing much details about your occupation it's hard to tell. 

If you are a first-time homebuyer, definitely take advantage of the 3.5% down payment! 

Do you want to expand the garage to turn into a rental unit or do you want to expand the garage just because? I would look at the comps in the neighborhood. If most homes have single car garages, it is probably not worth replacing it. On the other hand, if more homes have 2 car garages and your home only has 1, then you might want to consider expanding it. But again, everything depends on the comps in your area. You don't want to have the biggest house on the block! 

Congrats on your first deal! This website really answered a lot of my questions about LLCs check it out. You don't necessarily need to involve an attorney because setting up an LLC is not a difficult process. But if you feel unsure / uncertain, getting an attorney is not a bad idea!

The deals that you are looking at, do they require any kind of work? You want to buy something below market value because it needs some work. You want to look at places where rents are below market. Once you buy it and rehab it, you are going to rent it out at market value. Because you literally "added value" to the property, there is no way why you should have negative cash flows, unless you overpaid for the property at the beginning. 

From your description, the $500+ in monthly CF seems reasonable. I would do a refinance, pull the cash out from your primary home, and then put that as a down payment for your next investment. You can even qualify for a "first-time homebuyer" mortgage with the 2nd property if you haven't bought any real estate in the past 2 years. 

It depends which market you are in. I have worked at a few large institutional investors who buy deals that are $20M+, and they typically underwrite all 6%. Because typically with deals that big, there isn't just 1 broker involved. Usually that broker has multiple agents helping them with running analysis, preparing the presentation, etc. So when they split the commission, it's not as big as it might seem for someone who is underwriting the deal.