All Forum Posts by: Zachary LaJoye

I would say it depends on your situation. If you are looking for a place to invest disposable income and get a moderate return higher than that of the stock market the answer is probably yes. However, when investing in new construction you will lose return at the expense of the profit the builder must take. Now if you find a builder willing to go partners and build at cost with you financing the deal this could be mutually beneficial and greatly increase your returns. Sometimes better to own half of a great deal than all of an average deal.

Compare the costs of each. The closing costs on a refinance will be much higher than the cost of a HELOC. As long as you are fine with the adjustable rate that comes with the HELOC that’s probably what I would go with.

I agree with Scott Weaner . Personally, I shoot for a cash flow amount of $500+ per door. If I can’t get that and can sell for a handsome profit that is probably what I would do. A caveat to this could be if the property is in an area which I feel stands a good chance at appreciating in the near future.

15 vs 30 is a huge debate which can be looked at from several angles. From a cash flow standpoint, if the numbers don’t work on a 30 be aware that you will be assuming the responsibility of paying the difference every month for the life of the loan. This would turn the property from an investment into a liability in the short term. I agree with the above comments that you should go with a 30 and always pay it off earlier.

Stephanie M. Congrats on the purchase. I’m going to assume you’ve done your homework and that your numbers are all accurate. If so, I would increase rent to match the market rate at the first chance I got (lease renewal.) To have rent that far below market and leave that much cash on the table would be a huge misstep. Don’t get caught up trying to “meet in the middle” or help out the tenant. You need to look at it like the business it is and maximize your profits. You mentioned at the end wanting to, “at least get the tenant to cover half your house payments.” Going off this, I’m guessing this property is not cash flowing. Is this the case? If so, even more of a reason to increase the rent and maximize income. Good luck.

Brent Gargasz I live and invest in Cincinnati but work in the oil and natural gas industry. Most of my company’s work is just 30 minutes outside of Zanesville and a few of our competitors have shops in Zanesville. I mention this because the natural gas industry is only getting bigger in the northeast with the death of coal. I’m not saying Zanesville is going to turn into a boomtown but it could definitely see a moderate growth in population.

Why not both? Podcasts and reading can lay a good foundation and basic understanding but nothing trumps getting out there in the real world. Good luck!

     I would try to simplify it and look at where you are today and not so much where you think you might be in a couple years. I think it would be much harder for a new investor trying to get started by investing out of state than it would be for an experienced property owner to transition a property over to third party management. You would always have the option to simply sell the property when you moved also. Another thing to consider is financing. Owner occupied financing is going to come with more attractive rates and lower down payment requirements. I mean you have to live somewhere anyway right? 

     If you still are still undecided after considering those factors, I would compare both markets. If one is much better than the other for multifamily properties that could be the deciding factor. Good luck starting out on your real estate investing career!

Agreed with what Erik S. is saying. Getting into to a property for less money can equate to a higher cash on cash return. The amount of PMI you will have to pay is negligible when you look at it from a point of view of what else that extra 16.5% of downpayment could be doing for you.

Nice to see some fellow investors from the O&G industry! I work on the completions side up in the northeast. I agree that it might be worth reconsidering outsourcing property management in the beginning and transitioning to self-management. There must be some reason why a majority of investors do just the opposite. If property management is something you see as interesting and a possible business opportunity then why not just self manage from the get go? I find most of my best learning experiences come first-hand from the trenches. Couldn’t agree more about your best move being getting off the start line. Especially after doing your homework so adequately. Good luck!