All Forum Posts by: Todd Anderson

Kathy,  I agree with others that the long term renter being fiends may be a Red Flag.  This would not scare ma away though.  In your shoes I would not be apposed to moving into the 3 bed side get it how you want over 2-3-as much as  6 months. If you need to rent out a room you can.  Then let the long term tenants know that you will be raising the rent.  If they chose to move expect a longer turnover while you live there If they turn out to want to stay with the increase that's a benefit to you.  

Best of luck, If you have done the math and it is a good deal it will work out fine.  House hacking is such a great idea for your first rental and gives you a lot of flexibility.  

Joe, I work with investors every day that take this path.  There are so many good advantages to using the build to rent model.  As mentioned one of the top is being able to get a new construction investment property and own it for the best years of the properties life.  The builders that we work with, SI being one I work with a lot, are good at what they do and produce a good product in growing areas that rent well.  

Another great advantage is the interest rate.  As mentioned this will affect cashflow.  most of the builders that we work with are able to pay more points for the investor than sellers on the secondary market.  We have been getting the investors that I work with rates in the hight 3%s.  At that rate the investments cashflow nicely.

One big concern in this model that some investors are still being talked into funding ground up construction.  I talk with investors all the time that have been waiting up to 2 years to get their property.  We have solved for this as well.  All the off market properties we offer are within 1-3 months of completion and the builder is funding the build through CO. 

Connect with me for specific questions or to get out current off market inventory.  Best of luck!

Gayle, I can't give you specific advice on time to sell, but I am working with investors every day from all across California, who are thinking about moving their investments.  As mentioned the most common path is to do another 1031.  The investors that I work with value our process because they can get a New Construction investment property that is ready on their time line.  They also value that the process is turn key from start to finish, will knowledgeable boots on the ground.  

The other advantage the California investors have is that their equity goes a long way in another area.  Best of luck, I know it is always challenging thinking about selling a profitable investment.  Feel free to contact me with questions.    

Henry,  Cangrasts on taking the first step.  That is for sure the hardest.  I applaud you for your thinking in choices you have made so far.  When I talk to the investors that I work with, considering new construction is one of the first topics.  When doing this you are then owning the home for the best and easiest years of its life.  The rate that you are at right now is, I would expect, the main factor limiting cashflow.  When consulting investors I have tried to solve for this as well in negotiating with builders to offer rates in the high 3%s.  at this rate most properties cashflow nicely.

To your question about the LLC, starting out again you are doing the right thing. The only way to purchase in a LLC is to go with a DSCR loan. This works but the rates for a new LLC are very high. With your first rental, as you learn the only benefit is for liability, but when you are getting started, there are better and cheeper ways to mitigate liability risk. As you say good insurance and adding an umbrella will solve the issue.

Best of luck with this property, If it goes well you will be ready to refinance into a better rate and your next deal when ever we see better rates come back.  let me know if I can help.

Victor,

Welcome to BP Pro. A lot of the investors I work with are very happy to stay in the SFR space. They are growing their portfolio one property at a time. We have some off market properties that will cashflow day one.

Feel free to connect with me if you would like our inventory.
 

Noah,

You might want to look into new construction.  A lot of the investors that I work with are surprised that we have solved for the challenges that the others have brought up.  

Insurance is much better on new construction.  The builders that we work with are building in areas of obvious population growth.   These builders are also offering great Interest rates some as low as 3.75%.  

let me know if you want to connect and get our off market inventory.  

Monico, welcome and good questions.  Most have been answered well and I agree.  The difference in beds between 2-3 will make a big difference in how long tenants stay.  2 bed in a house or duplex leads to a more transient tenant.  no room to grow.  The investors I work with like that we have 3 and 4 bedroom options for an off market price.  

The other area that we find that our tenants like is the New properties.  When a tenant moves in to a new construction property with no issues we find that they normally stay 3-4 years. 

The area is another good concern.  Make sure you are looking for an area that has growing population and solid rental rates.  

Please feel free to reach out directly with any specific questions.

I would be happy to connect. I have been working with investors for more than a year to help them find new construction investment properties. We work with a number of builders to move there properties off market before they're complete. Most of the SFR, duplex, and quads are in the workforse category. We are staring to work with larger projects that will all be build to rent. I would love to hear more about your project

Natasha,  Sorry this is happening to you!  it happens far too often to far to many people.  I talk with investors every day who chose a challenging way to invest in new construction.  I have tried to solve for this problem.

I recently made contact with an  from the area through BP.  I have not used him personally but here is his info 

https://www.biggerpockets.com/users/johnm3034

Best of luck moving forward.  

They look like great homes and they are in an excellent market.  Good luck!