All Forum Posts by: Trevor Imlay

Russel is correct - ADU laws in most if not all northern Virginia locations are not investor friendly. Montgomery county MD is a good option. I would suggest looking for a home you can convert the basement to a 1 bedroom apartment with kitchen and separate entrance if you are looking to maintain privacy. Rough numbers:

Fairfax SFH:

1. SFH = $600,000

2. Monthly Mortgage = $2750 @ 20% down

3.  Rent out Basement = $1250/month 
(subtract for capex, vacancy, repairs, etc.) = $1000/month

4. Net Difference = $1750/payment

Buy a property that you can afford the monthly house payments on. Get creative if you have to and look into homes that you can convert the basement to a rent-able space to decrease your monthly mortgage payment. Live in it while you fix it up/add value to it. Research your local markets, sounds like you're in an area where you could cash flow and appreciate on a property. Use the BRRRR method on your first property. I would recommend an FHA loan only because rates are extremely low and you can get into a house with only 3.5% down if you occupy it for at least a year. On a $400,000 house you are probably looking at close to $30,000 cash to get into a property (closing costs, inspections, earnest money deposit, etc.). Use your remaining $20,000 cash for the rehab/renovation fund and don't touch your $50,000 in liquid assets for emergencies. After a year to 18months of living in the property and adding value its possible you can pull a decent amount of your money back out by re-financing and decreasing your payments by eliminating the PMI on the FHA loan. 1 year to 18months from now look for property number 2 (FHA mulitfamily) and rent property number 1. Rinse and Repeat. It's a slow play but it will get you to where you want to be in probably in 5 years if you can find good deals. Eventually you will want to get conventional financing so you can stay in a house while you work on investment properties that cash flow. It's definitely possible to obtain 10 properties over 5 years. If you average $400 cash flow per door that's $4,000/month close to your goal. Also start networking there are great cash flowing areas in the midwest with less upfront cost but minimal appreciation.

From my little experience evaluating the market over the last 18 months.  I don't know if there is an area with "high" cash flow.  I've seen maybe $200-$300 for most properties within the 495 beltway.  I would not invest in Baltimore but it is indeed one of the higher cash flow areas in MD (gotta find deals but they exist).  Baltimore you are typically going to cash flow immediately in most other locations it might take a year or longer to cash flow but your appreciation is going to be much higher.  

I come from the Columbus, Ohio market where almost everything cash flows and not until recently appreciation has skyrocketed in various areas.  From my research I don't believe areas exist with 20 to 30 miles of D.C.  I am not as familiar with areas further away than that.  Anyone have any input on my comments?

From my experience, yes. I have not started my true real estate investment career as of yet. Hopefully, some of my experiences will help you. I bought a SFH, 3BD 2.5BA, 1500SF, for around $200k. Each year the value of my house has increased around 10% I just completed a refinance and the appraisal came back at $290k. If I were to rent my house I would cash flow approximately $400 to $500. So, I think you see where I'm getting at. PG County is one of the few areas you can buy right now and cash flow monthly. I would encourage you to look very close to the National Harbor area. Within the last 3 years there has been significant development; new target, top golf, tanger outlets, mgm casino, new shopping center stores, etc. The future also has a lot of development in the works (check upcoming construction projects); in terms of multi-use apartment buildings similar to DC. Amazon is scheduled to commence construction just across the river within the next 6 months. I have a feeling Oxon Hill is going to be the next hot market. As you said everyone is being priced out of the other markets in the area.

Very fortunate to break even with a new build at National Harbor like Russell said. Outside of the immediate National Harbor space there are some great SFH oppurtunities in Oxon Hill/Forest Heights/North of Waldorf

Originally posted by @Christian Olivo:

@Trevor Imlay great insight! would like to get your perspective on your location if you don't mind; I got this crime map from Realtor.com. how do you feel the crime in your area and surrounding neighborhoods is? Do you feel safe walking around with your family? how about at night?

Its a very hit and miss area in terms of crime.  Theres houses just north of 495 in the area you highlighted that have great value and will cash flow positively if your play is buy and hold.  I feel very comfortable in my neighborhood because its kind of tucked out of the way.  Then again we did have someone stabbed and killed over a Popeyes chicken sandwich haha.  

Are you asking about less foreign investors in Milwaukee?  Probably wasn't a great example because foreign investors like any good investor will go wherever a return is profitable.  I know small farm towns outside of Columbus, OH that have been dismantled by foreign investors.  Most of these investments are extremely long term plays hoping that land values will dramatically increase.  All you have to do is look up your county tax records research the names on the title or deed and typically find that one foreign entity has been buying up properties through an American owned business.  I'll provide some examples when I get home from work.

California in particular has a very serious problem with foreign syndication investors. We are not only competing with American investors but people around the world. This has dramatically increased over the last 10 years. I'm starting to slowly see it now in the DC/MD/VA area. These investors typically will go 10 to 15% above asking price because they know they can buy the house and in 30 years when they are ready to retire it's still a great investment. Now if you go outside of major metropolitan cities - I highly doubt you will see foreign syndication investors in Milwaukee, Wisconsin.