All Forum Posts by: Tyler Herman

Welcome. 

Getting out of California really helped me ramp up my saves and get into real estate. I enjoy visiting still but a down payment there is the price of a house or even a small multifamily here in Mississippi or other places in the south/midwest. California's just a tough market to get started in. 

Best of luck. 

Before doing anything I'd check that she actually owns it 1, and 2 if there are any back taxes. If she didn't even flinch at a 10k price reduction and wants to sign paperwork the same day... Just don't be inheriting someone else's problem. 

I don't think flipping is any cheaper than purchasing rentals. You'll still need skin in the game unless you can find an investor or some other clever way to raise the money. 

Did you consider painting all that trim? Might make it look less dated. 

Just 1 duplex. Hard to find in my immediate area. 

Don't worry so much about appreciation, it's like trying to pick stocks. 

Resale value for multifamily is based on cash flow and NOI. The more profit a property generates the more it's worth. If your looking to have a quick turnaround on the property find ways to increase its profitability.

Purchasing a property is risky and to get $3600 cash flow over the year it doesn't seem worth the headache.

Of course if your goal is to reach retirement as fast as possible and you don't want to stay at your high paying job forever, or the income may be otherwise temporary then yes I'd take the 40k and get the first rental.

No formal checklist but you may be able to find one here. Just be polite and explain that you're new, but also explain that you need to do your due diligence. You might not be able to get every piece of info you might want but don't be shy in asking. It can't hurt.

What is it you're most worried about? For me on my first I was worried about buying a lemon so I learned everything I could about the inspection process and peppered my inspector with all kinds of questions.

Sounds pretty reasonable. I'd maybe consider doing a 2,3,4-plex instead of getting a primary residence. Maybe do out of state rentals with the remaining money. 

California isn't exactly known for cash flow.

It could be any number of things. As-is could mean there is some or a lot of deferred maintenance. 

Try to confirm with some local landlords, realtors, property managers if in fact the rent is low. 

Ask who, the owner, inspector, your realtor, their realtor? Different questions for different people.

Assuming you've already run some initial numbers. If the rental is occupied I'd start by asking for proof of income. Schedule E to verify. Ask about property management, vacancy rates, lease information. Try to get real numbers on insurance, utilities, taxes, maintenace costs, repairs. When the big ticket items where last updated/replaced: hvac, roof, etc. 

Get the inspection and factor in your repair costs. 

Sounds like you and your partner may want to spend some more time learning a bit more about investing before buying a 4plex but that's just me. Luckily  there are many blog and forum posts on this subject, spend some time combing through them.