All Forum Posts by: Tyler D.
Tyler D. has started 87 posts and replied 210 times.
Post: Best strategy for a 30+ year buy and hold?
- Posts 219
- Votes 99
Originally posted by @Remington Lyman:
Originally posted by @Tyler D.:
Hey BP,
I am 27 and have $200k to invest. I currently own a home in Ohio and have used it over the past year to gain some knowledge on being a landlord. I've decided that I want to do this for the long term, and want to take advantage of these historically low interest rates to buy and hold properties for the rest of my life. The question is, which properties and where?
Originally, I had followed the high cashflow model and bought my first house in Cleveland, OH. I later realized that my long-term returns would suffer due to a lack of appreciation, and have since done a metric ton of research on viable cities based on population growth, job growth, etc. The issue is that while the data is useful for a short term investment, I am unsure of how these trends will carry into the very long term future. Deciding on a city to buy and hold for the next 30 years seems somewhat like throwing darts blindfolded.
So, BP members with a super-long-term approach, which strategy and locations do you recommend?
If you have a long term investment horizon I would recommend investing in an area that has an upward renting job and population growth rate like Columbus, Ohio
I've been looking at doing that in Texas. My question is, how far out can you reasonably predict?
Another thing I'm concerned about is the high property taxes (in both Texas and Ohio) eating into my returns long-term as they scale with appreciation, while the mortgage does not. I'm curious as to whether property taxes are expected to stay relatively static in the future, or if they could change drastically over time. If the former is true it may make sense to buy a more expensive property in a lower tax state.
Post: Best strategy for a 30+ year buy and hold?
- Posts 219
- Votes 99
Hey BP,
I am 27 and have $200k to invest. I currently own a home in Ohio and have used it over the past year to gain some knowledge on being a landlord. I've decided that I want to do this for the long term, and want to take advantage of these historically low interest rates to buy and hold properties for the rest of my life. The question is, which properties and where?
Originally, I had followed the high cashflow model and bought my first house in Cleveland, OH. I later realized that my long-term returns would suffer due to a lack of appreciation, and have since done a metric ton of research on viable cities based on population growth, job growth, etc. The issue is that while the data is useful for a short term investment, I am unsure of how these trends will carry into the very long term future. Deciding on a city to buy and hold for the next 30 years seems somewhat like throwing darts blindfolded.
So, BP members with a super-long-term approach, which strategy and locations do you recommend?
Post: Buying Multifamily in San Francisco?
- Posts 219
- Votes 99
Originally posted by @Darius Ogloza:
You should familiarize yourself with the TIC rules as I suspect you will want to hold the property as tenants in common rather than as joint tenants. You will need an agreement reflecting who gets to live in which spaces, etc.
I will check this out, thanks for the information.
Post: Buying Multifamily in San Francisco?
- Posts 219
- Votes 99
Originally posted by @Chunyan Song:
Familiarize yourself with the rental ordinance in SF first. Rent control, very strict eviction and buyout rules. If you take a wrong move it can decrease the value of the property.
Good deals on multi family are very rare in Sf. It’s hard to find one that’s even cash flow positive, forget about the cap rates you see in BP discussions in other areas. Unless you put 50% down or something but then if you have that cash there are so many better ways to invest
With all respect did you read my post? We are looking primarily to live in it, not use it as an income property.
Post: Multifamily in San Francisco?
- Posts 219
- Votes 99
Some friends and long-time roommates of mine have decided that we want to buy property in SF, and eventually decided on multifamily as it looks like we'll get the most sqft/$ that way, as well as individual units.
Our plan is to buy a 3-unit and split it 3 ways. Of course this has risks involved which will require a good contract in case someone decides to pull out early, etc. But specifically I wanted to know the risks and what to be aware of when buying multi in SF.
I know that SF is a very different beast, and I want to make sure that we are making a smart investment, both as a place to live and as a place that we can sell or rent later on down the road.
I'm thinking that the end of this year will be an ideal timeframe as many landlords will be struggling due to mortgage forbearance ending and looking for a way to unload.
What advice can you give on buying multifamily in SF?
Post: Buying Multifamily in San Francisco?
- Posts 219
- Votes 99
Some friends and long-time roommates of mine have decided that we want to buy property in SF, and eventually decided on multifamily as it looks like we'll get the most sqft/$ that way, as well as individual units.
Our plan is to buy a 3-unit and split it 3 ways. Of course this has risks involved which will require a good contract in case someone decides to pull out early, etc. But specifically I wanted to know the risks and what to be aware of when buying multi in SF.
I know that SF is a very different beast, and I want to make sure that we are making a smart investment, both as a place to live and as a place that we can sell or rent later on down the road.
I'm thinking that the end of this year will be an ideal timeframe as many landlords will be struggling due to mortgage forbearance ending and looking for a way to unload.
What advice can you give on buying multifamily in SF?
Post: Buying in the Bay Area. Insane?
- Posts 219
- Votes 99
Originally posted by @Brian Garlington:
Being a landlord in San Francisco always requires a "unique mindset". Now more than ever it also takes some serious "huevos". Be very careful. I own rentals in Oakland and Concord and those areas in the East Bay seem like conservative Alabama compared to San Francisco. It can be done but be very, very careful my man.
Where would you recommend investing? I've been looking at the east bay as it is still inexpensive and is being gentrified. I'd like your take on this.
Post: Buying in the Bay Area. Insane?
- Posts 219
- Votes 99
Hey BP,
I'm a primarily OOS investor living in San Francisco. I have been renting bedrooms for exorbitant prices and considering the possibility of buying a home here, and I want to know if it makes sense or I if am out of my mind.
As I see it, the benefit is clear: There is a huge demand here for property, that won't go away anytime soon barring a total exodus or collapse of the tech industry. Even then the weather is great, so people will still want to live here.
The downsides however are numerous. The huge and growing homeless problem, coupled with a buy-in price that seems unsustainable for most people. Only the rich can afford to buy a home here, and that may mean a decrease in prices if we have in fact hit a top. There is also rent control, and anti-landlord politics that I would have to deal with if I decide to rent it out or go multifamily. As I intend to live in it for now, I wouldn't have to deal with that for some time, though.
As it stands, I have about 200k in cash, and plan to live here for at least 3 more years. Do you think it would be a smart idea to buy a house here, or should I put my money elsewhere?
Post: Which of the big 4 cities in Texas is the best to invest?
- Posts 219
- Votes 99
Originally posted by @Jenning Y.:
As a Texas resident living in Houston Metro for over 20 years, and also as an investor with properties across five US states, here are my takes on this:
The only Texas city worth to invest is Austin - yes, it is a little bit of expensive.
Forget about Houston and San Antonio. Take Houston, property tax close to 3%, historical vacancy rate is about 10%( right now is a little bit of over 10%, pretty close to historical average), if unfortunately you are located in hurricane zone, hurricane insurance over $1000, did I mention flooding? Why do you want to bring so much trouble to yourself?
I do not think San Antonio's potential is much better than Houston.
You may say, all Texas cities have decent appreciations in the last 10 years since financial crisis. Yes, that's true, but that's only because the 10 years before that period we have near zero appreciation. So the total appreciations ( not annul appreciation) in the last 10 year and 20 years are almost the same.
You see, there are lots of nice states like Utah, or Colorado, their property tax rate are only about 0.6%, about one fourth or one fifth of Texas's property tax rate. Why should you choose a state whose property tax rate is 4, or 5 times the others?
If you are an OOS or remote investor, here is my suggestion:
1) if you must invest in Texas, invest in Austin.
2) If investing in Texas is not a must, choose other states like Idaho, Utah, Colorado, or North Carolina
Note: I am only talking about 1~4 unit, not large apartment buildings, also, many people like to invest locally then they do not have other choices, I understand that.
Last unpopular statement: if you are an OOS or remote investor and you only focus on cash flow, you get the wrong idea!
I'd like to know where you invest in Idaho and Utah. Even with the lower property taxes, you can't cashflow anywhere near as well as you can in Texas buying in Boise or Provo. I'd also like to know why you recommend investing in Austin. The way I see it, you would be hemorrhaging money every month on the hopes of appreciation.
Why do you recommend against San Antonio? Fair reasoning for Houston, but be fair and back up your argument for SA as well.
Also, to your statement at the end about cashflow: I think that cashflow is important, but these markets aren't even heavy cashflow markets. They are a mix of cashflow and appreciation. If I wanted heavy cashflow with 0 appreciation, I'd buy 50k SFHs in the midwest. If I wanted to gamble on appreciation with little to no cashflow, I might buy in one of the places you listed.
Post: Which of the big 4 cities in Texas is the best to invest?
- Posts 219
- Votes 99
Originally posted by @Kevin Wood:
@Tyler D. I'm from Houston and thus invest in the city. I own close to 10 small multifamilies and manage property for other investors. My advice would be to invest in the city you know the best. Out of your list I agree with Austin. The city is currently overcrowded with tech demand and the city hasn't been able to absorb the growth (imo). Between the other three I would choose where you would most want to live or where you align the most with the industries, communities, etc.
Too often people focus on the short term "what is best". Real estate is a 10 year + game. I'm five years in and just getting started.
Thanks Kevin. I'm focused on a 30yr buy and hold time horizon for my properties, so I want to buy in the area that has the most potential for long-term growth. I'm not all that concerned about what happens tomorrow, but I am concerned about what happens in the next 10, 20, and 30 years.
Of course it's impossible to know for sure where things will be with that long of a time-horizon, but I think that we can get a rough idea by looking at the long term trends of past pop/ job growth, where businesses are moving to, etc. San Antonio jumps out as a potentially great long term play, due to its proximity to Austin and all of the growth that is continuing to happen there. What do you think?