All Forum Posts by: Tyler Hampton

@Rob Hallowell

I’m just finding out this is a thing. I’ve lived in my personal house for almost 7 years and I’ve redone tons of stuff (finished basement, remodeled kitchen) and never got a permit except for doing all new HVAC. I hope it doesn’t cause issues when I try to sell it. Although I don’t plan on selling it for a long time. So I guess my point is, I’ve had a lot remodeled with quality contractors that never got permits pulled. So as long as your trusted contractor says the work is legit, I think that is normal.

@LaRhonda M

I just started my real estate journey in Atlanta! Assuming everything goes alright from here, closing on August 23! First one and I’m out of state. I’m hoping Atlanta is a good area. I finally decided to jump in, so I’ll let you know how my experience is as I move along!

I’m looking for my first rental property and I was wondering if anyone has ever given a tenant a monetary incentive if they keep the place looking nice and not having any repair costs? I’d like to figure out a good way to get the tenant on my side to work towards the same goal of good upkeep, but I’m not sure the best way to do that! Let me know if anyone has any other good ideas to work with the tenant on good maintenance! Thanks!

@Jingru Sui I really appreciate the response! I will give you a little more info. My realtor did go look at the property and said it would  just need new blinds and a new handle for a door, but other than that it looked good. I am allocating $200/month towards any home repairs or expenses that come up and will have a reserve of about $20,000-$25,000 in case something major happens. So if we don't have any repairs in a month, we will save $236-$336 that month of positive cash flow (which we won't touch since this is a retirement plan, not access to money soon plan). I would hope that that would cover most minor expenses for any given year, and then we would have the ability to pay for any major issues that might come up with our reserves. Then the hope is obviously to increase rent as time goes on, as well as gain appreciation and loan pay down. I am trying to be as accurate and realistic as possible and certainly don't want to buy a house just to buy a house. Let me know if you still think this is something I should abandon and look for other options! Thanks so much!!

@Peggy Beauregard

Thank you for your response! I agree the margins are very slim! My question then is this. How do you increase that margin? For this particular house, I save about $20 a month on the mortgage for every $5,000 less in purchase price I get. I’m assuming for this house I’d get it at $190,000 and the house is listed for $205,000. If I wanted to get a better margin I’d have to offer another $25,000 lower to get an extra $100 or margin. No way he would accept that. So is this where wholesalers come in?

The other option would be to buy a place that needs work, but every place I seem to find that could use some work needs more than my budget can allow once I pay the down payment.

So the reason I was ok with a slim margin here was because the area is trending up. So if I figure average appreciation is 3%, that would make the property worth $206,000 (assuming $200,000 valuation today). As an area that is trending up, I would hope it would exceed 3%, but I’ll still assume 3%. So if I make $6,000 in value and only maybe $400-2,000 in cash flow, that still seems like a win, especially since the loan will be paid down by roughly $2,200 in the first year. So if I calculate $400 cash flow, $6,000 in appreciation, and $2,200 in equity, that’s roughly 12.6% return on my investment. That seemed workable to me. I’m in this with roughly a 25 year plan to build a small portfolio for retirement. Let me know if you still think this is an unreasonable calculation! Thanks so much for your advice!

I am brand new to rei and my local area is very bad so we are looking out of state. We chose Atlanta, GA because we have a good friend who lives there who can help us in a pinch if necessary, and it seems to be a good area for real estate appreciation. With my budget, cash flow will be tight, but should be positive by roughly $36-100/month (more if we have fewer expenses. I am figuring $200/month for expenses outside of mortgage, taxes, insurance, management, and leasing). The house is single family and recently renovated so the expenses should be low for awhile. I explain all this so you have some background for my question... Should I form an LLC (and where to register it?) for out of state investing, or should I just hold extra liability insurance (do I need umbrella policy?) to make taxes simpler? I hear a good lawyer will sue you personally whether you have an LLC or not. Is that wrong?

The other question would be for anyone in the area that has local knowledge. I have a good realtor there who hooked me up with a good property manager and I think I have everything figured to make an offer, but I wasn't sure if anyone knew if the Pittsburgh neighborhood in Atlanta was a place where I can be reasonably confident about finding a renter? The only concern I have is if we can't get it rented at all. 

I am totally new to this so these may be really basic ignorant questions!! Apologies if they are. Thank you for any help/advice you can offer.