All Forum Posts by: Tyler L.

@Allan R. The police are right about the contracts, that is a civil matter. Why they didn’t arrest her for outstanding warrants is beyond me. Begin the eviction process immediately. Once that is completed, then the police can get involved, as it is a court order to vacate.

@Shawn O'Gorman I’m about to turn 21, done some deals as an agent, about to buy my first flip, and am planning on my first buy and hold before my 22nd birthday. Every person I’ve talked to says their one regret is they didn’t start earlier. If you’re brand new, I’d say give yourself 6 months to learn before just getting out and doing it. Listen to one Bigger Pockets podcast a day, reach out to potential mentors, and maybe pick up 2 or 3 reference books to familiarize yourself with how everything works. But definitely don’t wait, I wish I hd started a year ago.

@Daniel Lynch This is a tough call. Like many others have said, if you two rented a place together she’d be responsible for her share. At the same time, it’s hard to treat her like a tenant. If the situation where reversed I’d have no problem paying rent to my girlfriend. But I also understand real estate pretty well. In my situation, I’d probably just ask her to pick up some other expenses. Maybe I cover housing related expenses, and she would pay for groceries. The two aren’t the same, but it’s still something. Besides, she’d be saving a third of her income by not paying rent-she should do SOMETHING to cover it.

Hi Mark, welcome to Real Estate!

Nearly every experienced investor will tell you the same thing: timing the market is impossible. The key is to find GOOD DEALS no matter what the market does. If you're able to pay $70K for a house that's worth $100K, that's a good deal no matter the market. If house prices decline by 25%, which you generally see only in places hardest hit by a recession, you'll still turn a profit. If on the other hand the value goes up by 5% in the next year, you've made an additional 7% on your money, in addition to the 42% you made instantly. 

A recession could very well hit next year. But it could be 5 years away. If you only buy good deals, you'll still coast through the former okay. But the worst thing you could do is wait for a recession that really is 5 years away. There isn't a single way to tell what the market is going to do, only ways to make educated guesses. 

I'm currently working on behalf of a very experienced investor. He has decided that the odds of a recession are higher than he's comfortable with. His solution is not to freeze up and wait for the market to crash. Instead, he's recruited me to find good short term deals (value adds that take less than 6 months) as opposed to his current longer speculative deals (condo developments that take 18+months). That's in addition to his buy and hold strategy, which stays the same no matter the market: buy good deals. 

What does everyone think the long term (>20 years) investment prospects are for New England? I have seen some things that concern me and want to get other opinions. 

In terms of population and economies, it seems everything is moving south and west. Texas and the West Coast are growing at a rate that leaves New England in the dust. The main drivers seem to be the weather and low col compared to the East Coast. 

Massachusetts' GDP in 2018 grew at half the rate of Texas, and 75% the rate of Colorado (https://en.wikipedia.org/wiki/List_of_U.S._states_by_economic_growth_rate). Rhode Island and Vermont grew far less. Furthermore, many economists predict a decrease in college enrollment in the next 7-10 years, which will disproportionately effect New England (https://www.bloomberg.com/opinion/articles/2019-05-30/college-enrollment-bust-is-headed-this-way-by-2026). 

There are of course some promising signs. New Englands economy is extremely diversified, which means it has and will likely continue to fair better in a recession as opposed to other regions that focus exclusively on gambling or tourism or manufacturing. Many of our economies, like healthcare, will never go away. Plus, for short term investments, like value-adds and rehabs, there is more money (in straight dollars) to be made if you have the capital to do it. A 30% value add on a $600K house in Boston is more profit than a 30% value add on a $200K home in Oklahoma. The college slowdown is predicted to not effect elite colleges, of which New England has more than any other region. But while our 4 Ivies will be safe, as well as places like Northeastern, BU, Tufts, Wesleyan, and MIT, there's no denying that we also have a disproportionate share of colleges no one has ever heard of that will be hurt. 

All of this together, should we fear investing long term in New England? Will the region 20 years from now be a relic of a past time, the same way that Ohio was one of the centers for economic activity in the 1900's? Or will it be in the same standing as most large cities are today, economic hubs where cash flow is sacrificed for safe and sturdy investments? 

For now, I've considered continuing to pursue value adds in New England, where I can make a higher profit in pure dollars, and then investing that in these growing cities with cheaper costs, like Dallas. That said, I'm looking to owner occupy a triplex in NE, as well as hopefully pick up a couple other investment properties in the area where I can self manage it easily and get strong cash flow, and fear the long term prospects and implications of the region. 

When looking at comps for sfh, what's the biggest and least important factors for you? Which ones are you more willing to compromise on, and which ones less?

For me, the importance in order is:

1. Number of bedrooms

2. Number of bathrooms

3. Home type 

4. Home Size

5. Lot size

6. Time since sale (as long as it's under 6 months, the difference isn't a huge deal for me)

This is what I'm looking at for a flip-so I only look at comps in similar condition to the finished product. If you're looking for a turnkey, condition would also matter. 

 Obviously there are other things that matter, like if there's a corner lot. Is there anything I'm missing, or anything that should be given more priority than I give it? 

If forced appreciation isn't an option, you can also get a low-money down conventional loan. 

There are some 3% conventional loans, but very few. 5% is fairly common, as is 10%. Depending on where you are, the difference between a 3% and a 5% loan down payment can be pretty small or $10-15,000. I would recommend getting your real estate license after buying your first property (or before, if you have the time). Then you can negotiate a 3% commission, which gets split with your broker, so you'd get the 1.5% difference back at the end.  

Like Russel said, it depends on whether the dual agent is the Broker or the Real Estate Agent. 

With a dual broker, there's nothing to really worry about. With a dual RE Agent, there's a ton to worry about. They now have to balance their loyalty between the buyer and seller. In most cases, the agent benefits more from being loyal to the seller than the buyer. 

I see no situation where the positives outweigh the negatives. 

Welcome to BP Kevin! Where in the Boston area are you? I'm right in the city. 

I consider my investment philosophy more aggressive than many, so this is what I would do with $500K. 

Step One: BRRR until the banks stop giving me mortgages

This would probably take several years to do right. In the end, I'd still be left with $500K, and 10 investment properties on top of it. The cash flow would likely be low, but it's 10 properties for the price of sweat labor. If I end up at $200 a month in cash flow per property, we're at $24,000 a year. All will be invested back in multifamilies. 

Step Two: Take $250K and invest in multi families using a portfolio lender, looking for a 15% cash on cash return. This will yield $37,500 in income, which will be invested in multifamilies. 

Step Three: Take the other $250K, use it as dowpayments for flips with hard money lenders, and put the profits in multifamilies. In my region, a flip will require about a 30% down payment, and the average project is in the neighborhood of $250K, so I can have 3 flips going at any one time, with a $25K reserve. With a 4 month turnaround, I can complete 9 flips a year. 

Step Four: At this point, we're yielding $61,500 in passive income, plus flipping income, both going straight to multifamilies. I'd Repeat the process until my passive income exceeds my day job. I'd then leave my day job and go to flipping full time. I'd live off of the flipping income, not touching the passive income. I'd let my multifamily portfolio grow, as an emergency fund in case I can't make anything flipping or have an emergency. When times are good, it just keeps growing, and when times are bad, I know it'll be my nest egg.