All Forum Posts by: Trent Reeve

Thank you for your input, Trent! I did contact them to understand the numbers better and the posted numbers are the ones over the length of a full year worth of income produced for these complexes with the summer being the high season and the winter the slowest season. It seems very intriguing as the market seems to be cooling off and from what I was told there will be lots of new inventory flooding the market in the next couple of months. I am going to get my ducks in a row, so I can get preapproved for a loan and jump right in. I feel confident with the PCB market that over an extended period of time it will be a very beneficial investment.

Thanks again!

Hello everyone, I would like to purchase a single family home with only 5% down that cash flows at least $300 - $500. Range from $200k- $300k in the surrounding suburbs of houston. I am using the BP calculator, if i put down 20% all these deals cash flow. I would like to rent out to section 8 tenants. It seems the only way these properties i'm finding will make money is if i rent by the room ( i rather deal with 1 family then 3-4 different tenants). OR i could find a cheaper property in the hood for $150k- $170k. 

I do not know what to do if i should lower my price range, rent by room, look out of state, wait for the market to go down. i'm already pre approved just need to find a strategy and locate the property. Any advice would be greatly appreciated.

Hey @Trent Reeve, welcome to the BP community!

Analysis paralysis is a real issue that most new investors face. However, many new investors also buy terrible first deals. You want to be patient and educated enough to avoid the second but courageous enough to avoid the first. It's tough to know in the moment when you have enough education to avoid the first. However, if you simply make it all about the numbers, it becomes a lot simpler. Don't get a HELOC just because people say it's a good strategy to purchase rental property; do it because you believe you can find a deal with high enough CoC return that the HELOCs rate won't matter. Better yet, buy a deal that you feel confident you can add value to and refi to pay back that borrowed credit.

If you don't fully understand the numbers, you aren't ready to purchase a rental. You wouldn't buy a business without understanding the numbers, right?

Once you understand the numbers and have set your criteria for cash flow and CoC return, you're ready to purchase. Maybe consider a house hack for that first purchase? This will allow you to also rent out your current home. In one purchase you went from zero units to two or more (depending how many units the house hack is). Your $20k reserve is enough for downpayment and closing costs for an owner-occupied 3-3.5% down traditional loan of up to $300k purchase. The HELOC could then be your emergency fund for any surprises. Not to say there aren't other options, but that is probably how I would do it.

Hope this helps a bit. Please, feel free to reach out anytime if you have other questions or just want to chat!