Real Estate Investing: Does my analysis look right? Need help coming up with a strategy. |
- Does my analysis look right? Need help coming up with a strategy.
- Question for the Community: What were the circumstances and motivation for you to start investing in RE, and how did your first investment go? How did you know you were "ready"? Was the first deal easier or harder than you assumed?
- Anyone have experience along the I4 corridor in Florida? Tampa, Plant City, Lakeland are. Looking to buy first property but everything seems “expensive”
- My opinion on Renatus
- Mystery water damage to hardwood floors
- Cardinal Properties
- How do you best capitalize once you have an investor?
- How do you find reliable contractors?
- Investing in rural areas?
- What's the current state of the multifamily loan market?
- How valuable are real estate leads to you?
- How do you find a rental property insurance broker for your properties in an area?
- Just beginning
- 1031 into the Rust Belt for Cash Flow ???
- How does REI work for you?
- Worth Chasing? Cluster of Lots. Road Frontage. Desirable Area. Failed Perk Test.
- Looking at Tax records...need advice
- commercial real estate maintenance
- If a new US RE company buys a property, can it take out of loan on that property?
- Questions on Starting Real Estate Investment Firm
- Can the time value of money explain real estate appreciation?
- Lender not allowing LLC transfer
- For those who wholesale, how many deals do you get a month?
- Does anyone have advice in buying REITs?
- Wife Not On Board
| Does my analysis look right? Need help coming up with a strategy. Posted: 11 May 2020 07:12 PM PDT Quick background: I'm 28 years old, single, currently live at home, $50k (and growing) ready to go toward a real estate investment, no debt, $90k+ income, looking to get into a multi-family real estate to kick off my real estate journey in North NJ. My goal would be to house hack. I am open to buying something and continuing living at home and working on quickly getting property number two. I haven't looked into single families much, but I would be open to a flip. I'm worried about not being able to secure financing for renovations to get the property turned around quickly. I've been looking to enter the real estate game with a multi-family in North NJ. I'm mainly looking at 3 and 4 family homes for the additional revenue. 2 families can be tough with the high asking prices and property taxes, but there are some out there (more below). Another reason is the numbers don't look as great as the 3 and 4 families, at least in my inexperienced eyes. My analysis **These calculations do not factor in utilities or appreciation - obviously numbers will change I would appreciate a critique of these spreadsheets and what additional things I should take into account or may need to change. Here's the quick and dirty spreadsheet for a 2 minute calculation when I get a listing e-mailed. Two properties I looked into this week. I saw the duplex in person this morning. 3 unit - $575k - assumes current rent rate without garages and collecting full rent in year 3 The first property was a 3 unit. The owners accepted a conventional loan offer within 3-4 days and I couldn't even schedule a showing. Problem with this property is that it's located 1 block away from a chemical spill, EPA cleanup site. Selling agent wasn't aware of this. The town says it's all taken care of, but who knows what kind of problems can be lurking or develop in the future (health, trying to sell the property, etc.) The numbers looked fantastic. The building was apparently making $3,750 from the two main units and also had a studio apartment. There was a two car garage (dilapidated) that could pull additional income if fixed. The two units could easily generate $4k+ and if everything was renovated and in working order, I could see it pulling in $5.5-$6k a month. 2 unit - $285k - assume moving out in year two and collecting full rent The second property was a 2 unit foreclosure that went on the market about 6 days ago. Offers were due today and they already had multiple offers in, so there was no room for bidding lower. I approximated $285k for the price. I saw it in person this morning and it was in much worse condition than the pictures showed. I think $75k in work was on the low side and it could easily turn into a $100k+ project. I don't have an additional $100k for reno, I don't know if this property would qualify for FHA, and after all was said and done, I doubt it would fetch over $375-400k in that neighborhood. I don't know if dumping all that money into it would be worth it in the long run. Do these numbers make sense? The returns seems above average. Maybe they are that good and that's why these things are disappearing within a few days of going on the market. Here's my problem and where I need help developing my strategy. I feel like I have analysis paralysis. I'm looking at too many numbers and don't know wtf to do. What do you guys look at when determining if an investment property is worth it? Going apartment rates here for a decent unit can be anywhere from $1.5-2.2k. If I house hack, I obviously don't want to be paying much if anything toward my mortgage. Do I want to be paying a certain percentage of the going market rate? I've come across properties that might cost me less than $100 a month which seems like a no brainer. What if I'm paying only $1000 to live there? Less than the market and I'm building equity. Do I want to look strictly at cash flow? Does the 1% rule apply in NJ? I've noticed properties here that can potentially meet this rule of thumb usually require a lot of work. What's a good cash flow in NJ? Should I be looking for something more turnkey that's maybe only flowing $500 a month? Do I look at CoC return? A lot of these properties are offering 12%+ cash on cash return. With equity and appreciation, I might be look at 20-30%+. I guess I need to figure out how to make sense of the numbers in my market and then I'll know how to proceed. Am I being too greedy and looking for astronomical returns for my first property? Any NJ investors here that could offer me some market specific advice? [link] [comments] |
| Posted: 11 May 2020 06:57 PM PDT I am an aspiring investor, and I feel that I have gained sufficient knowledge to the point where I am nearing my first purchase; however, it is obviously very nerve-racking to move ahead with the first purchase outside of the theoretical calculations and research. I was looking for some anecdotes that could perhaps reassure my process going forward. [link] [comments] |
| Posted: 11 May 2020 08:43 AM PDT I prefer Tampa but work in Lakeland can live anywhere within 45 minutes really. I was looking in Lakeland but they have seem to have some massive appreciation even in the last 2 years. I would love to house hack with a duplex or a triplex but there are almost no units available and the couple that are don't make sense in terms of potential rent. Even some that look promising say all tenant occupied so can't really move in. Is it better to wait until maybe the winter and see if prices go down for single families at least? I'd hate sign another lease and rent but looking at the prices for homes they've seem to have topped out or just no good deals right now. This was an interesting property but looks like it's in a shit area and as it's a new construction price is high and don't think it'd be economical in terms of money you get back on rents. https://www.zillow.com/homedetails/612-Coronet-St-Plant-City-FL-33563/45124948_zpid/ [link] [comments] |
| Posted: 11 May 2020 04:33 PM PDT I woke up this morning to a link in my email from someone I hadn't seen in about 10 years. He was someone I knew from a real estate investing "college" called Nouveau Riche University. Nouveau pretty much died shortly after I attended there because the market was a wreck and no one could afford their program. One of the co-founders created a new business patterned completely after Nouveau. He called it Renatus. I was curious, after seeing this link, if that company was still around. It is, and they're apparently selling like they were in 2008. I saw a question on reddit from a guy asking about whether his brother should join or not for the $20k they require. I wrote a response to his question and when I hit submit, I found the reddit had been archived, so my response would not post. I didn't want to let that comment go to waste, so I decided to make a new post. I feel my words will help someone who may have the same question on their mind... here's what I wrote (on my little Note 10+ 5G phone lol, so it took a while): I joined Nouveau Riche University in early 2008 near the real estate market crash. I had already been investing in real estate prior to joining. It cost 20k for their whole package which included overpriced DVDs and books. The books and DVDs were 4k, if I remember right, and the education was 16k. The books and DVDs taught me nothing new and ended up being given away at a thrift store that benefits the blind. The education was a 2 year program where you got to go to Arizona for a week at a time approx 6 times a year to hear from people they called experts in their fields. I live in California, so the drive wasn't bad and I had family who lived 2 miles away. So I would only be out food and gas (and 20k). The classes were very informative. The teachers were charismatic, energetic, and entertaining. I went about ten times in the 2 years. They had a business set up where you could buy into property that someone else helped you acquire, fix up, rent out, and then they handed it to you to manage. Everything sounds great, right? It was good in the moment. (The property's values turned out to be overstated and the people selling them were former students and some instructors, making an extra 10kish per property. They weren't in very good areas, either, I was told after an acquaintance of mine told me she sold her house she got through there for $1 just to get rid of it.) I learned a lot of things. I really did! All in all, that 20k I spent should have gone into a down payment on a house, or better yet, lent to another investor. It would have been better spent. I should have read books about investing techniques I was interested in. It would have been just as fast and just as informative! They brag that they update their curriculum each year. The only changes that are made are in the taxes class, from what I could see because strategies change, but the strategy method doesn't (typically). If you want that information, you can just join the free newsletter that their teacher on taxes puts out, and listen to his podcast. I built my YouTube channel, (holding back the name of the channel because of self- promotion rules in the community) BECAUSE companies like Renatus charge you 20k for information you can get for $200 from the same experts (Renatus is not unique. Trump Kiyosaki, etc all do similarly). Renatus is Nouveau Riche reborn because Piccolo and Snyder parted ways. The people you see glorified are most often those who sell the education plans and earn the big paychecks telling you that you can do the same. Believe me, I sold 4 in the first month, meaning I had earned half of my 20k back. The fifth person would have brought me the other 10k. I tried desperately for a year to get a 5th person, and should the economy have been roaring at the time, I'd likely had sold many more than the 4. I was invited on stage to share my experiences. I bought property with those selling the education, after finding out they'd never actually practiced what they were selling, but were making 500k a year on sales. The one property they always showed in the presentations never actually came to light, but it sounded amazing! It was to be a high rise out of the country. Never happened. It wasn't until they actually did a deal with me, using my team out of state that they started doing stuff on their own. After that deal, I tried to keep in contact. They didn't want to. I'm mentioning this because the sales guys are slick. They're good at it. That's where they got their money. After years of sitting on their thumbs and building a following locally, they built enough trust to borrow from many of them to actually start buying and selling property. They've become successful. They did so because they networked, put into practice principles they had learned, and made mistakes along the way. If you or anyone wants to invest in real estate, you don't need to pay 20k to learn it. You need to do research, network with like minded people, and do it. Renatus is 99% wannabe investors, 0.9% investors and marketers, and 0.1% instructors/ owners (my opinion). You want to learn from them? Go to the "intensives" they put on. You'll get a couple hours of info for free. They'll upsell you to buy their program. Just write down your questions, go to my YouTube channel (or anyone's for that matter) and ask and I'll or they'll tell you for free. I've been to their programs and I've invested in real estate for 17 years... and I have nothing for you to upsell. By the way, the person who's bringing you into Renatus gets almost all of your first 4 people's tuitions if it's the same as Nouveau Riche. It's not until the 5th that you start making the money... oh, and your first 4? Their first people go to them, too, so it's definitely a MLM set up. As soon as I had my first 4, my "upline" who made over 500k per year from sales mind you, didn't seem to have any need to help me any more... imagine that... even when I was bringing in people, left and right to the meetings. He actually lost his home when sales crapped out. Then he tapped his downline for funding and actually started to invest. Keep your money and buy something. You'll learn a lot from a realtor, mortgage broker, and property manager! [link] [comments] |
| Mystery water damage to hardwood floors Posted: 11 May 2020 07:00 PM PDT I'm considering whether to buy a house to rehab and rent out. It's a 1920 craftsman and while the hardwood floors are still present, they're severely water-damaged throughout the house. That said, there's no water damage on the ceilings above them, we're not in an area that floods, and the areas near the plumbing are the only areas that aren't damaged. Any ideas for how such a thing could happen? [link] [comments] |
| Posted: 11 May 2020 06:33 PM PDT Does anyone have experience in cardinal properties? Where could I learn more about this asset class? [link] [comments] |
| How do you best capitalize once you have an investor? Posted: 11 May 2020 06:59 PM PDT Once you find an investor, what are some common ways you make money off of the property? Do you split equity and split profit? Do you get all equity and give the investor a majority of the profit? Wholesale? [link] [comments] |
| How do you find reliable contractors? Posted: 11 May 2020 10:28 AM PDT What are some good methods for finding good contractors? I've asked some realtors but never got any good references. My last contractor turned sour later in our project and I unfortunately referenced him to other parties while things seemed to be going well. [link] [comments] |
| Posted: 11 May 2020 11:13 PM PDT I've been thinking about getting into real estate investing to become FI, however my area is mostly rural. within a 50 mile radius there are hundreds of houses < 50k which might need a little work but most are in liveable condition. For those that invest in rural real estate what are your tips and average times to find someone to rent to. In a few months I will be debt free and in a good position to buy and am heavily considering this. Especially if I could take out a shorter loan term 10-15, have the renters essentially pay the mortgage and turn it around and sell for basically 100% profit. [link] [comments] |
| What's the current state of the multifamily loan market? Posted: 11 May 2020 04:21 PM PDT Doing some DD before I put in an offer on a multifamily property. I'm a cash buyer, but I've heard banks have put a hold on mult-family lending... or are charging 4+ or 5+% on those loans. Is this info correct? [link] [comments] |
| How valuable are real estate leads to you? Posted: 11 May 2020 10:04 PM PDT I just got into the real estate game this year and bought my first property a few months ago. Obviously in my first year ive read, listened, and learned a ton. The one thing that sticks out is the value of finding a deal. There are so many people out there trying to pick out that diamond in the rough. I'm wondering to myself.. why not just pay for leads to find deals? Anybody out here have experience paying for for leads? More context: I have experience generating leads for other industries through various methods and I'm thinking about just applying those skills to the real estate world. But I'm curious to see if there is a large enough demand to sell leads.. [link] [comments] |
| How do you find a rental property insurance broker for your properties in an area? Posted: 11 May 2020 02:52 PM PDT I'm trying to figure out how I can get a bunch of quotes on a property I own without my having to call all of the big guys manually one by one. Any recommendations? [link] [comments] |
| Posted: 11 May 2020 02:43 PM PDT Hello all of you in r/realestateinvesting. I am a 20 year old living in Illinois and I'm saving up for a 3.5% down payment on a single family home or duplex ranging from 80k and 100k. My question to you guys is, how do I get started renting it out? Keep in mind this would be my only property to begin with. Do I take the equity out of the first home after a year of living there a year to finance another SFH? [link] [comments] |
| 1031 into the Rust Belt for Cash Flow ??? Posted: 11 May 2020 04:54 PM PDT Based off this in depth article: https://www.biggerpockets.com/blog/bpinsights-market-study-top-25-us-cities-cash-flow-appreciation It appears that Pennsylvania, Michigan and Ohio have the best ratio of cashflow to appreciation. But when I go onto loopnet and look at properties that are 5+ units it looks like rent is $400-800/mo/unit max. With a mortgage, I'm not seeing how this cashflows better than anywhere else, or cashflows at all. Can someone explain to me how this would work please? A $700,000 10 unit would barely pay for itself on that rent. Am I missing something? Also, are there real estate brokers who specialize in several states and finding large multi family properties, but not just in one state? Where would I find such an individual? And besides loopnet, where else should I be looking? Thank you. [link] [comments] |
| Posted: 11 May 2020 10:50 AM PDT I have been interested in getting into real estate investing for a number of years, but lacked the capital to get started. Recently, I had a work transfer which gave me the opportunity to turn my personal home into a rental. It is now rented at about a 7% cap rate, and I am slightly cash positive each month. My question is, how does real estate investing work for you? Is your goal to accumulate enough properties to make steady substantial cash each month? Or is it to accumulate equity in properties over a long period and eventually cash out? [link] [comments] |
| Worth Chasing? Cluster of Lots. Road Frontage. Desirable Area. Failed Perk Test. Posted: 11 May 2020 04:39 PM PDT I found a cluster of seven lots in an expensive area a few hours away. Someone got them in a lot for pretty cheap, but then found that they did not pass a perk test. They do not have city water, but the lots are in a suburban neighborhood and so I am assuming that they have or can get electric. Each of the lots has ample road frontage. They are also the right shape so that you could potentially consolidate the lots to create bigger yards. I am considering making a lowball offer to try to snag this land for close to nothing. I have discovered that the seller bought them and then learned later that the perk test failed. The economy is also a lot less certain right now compared to when they purchased them. As I see it, the value has dropped significantly. (And I don't really care if they say no.) My question is if making a deal like this is worth pursuing? Are there any landmines I should look out for? Is this only for VERY experienced people? One idea I have is to consolidate some of the lots (increasing the size of each) and then looking into some kind of specialized shared septic system. Maybe this could be done legally kind of like an HOA? Five of these large lots would go for probably 10x what I would pay for the land alone. Is this feasible? [link] [comments] |
| Looking at Tax records...need advice Posted: 11 May 2020 10:20 PM PDT Hi All- I have been looking for rental property in a HCOL area, driving around neighborhoods I am interested in (gets me out of the house during the SIP) and found 2 properties that look abandoned. I looked them up on the tax accessors site and both have very past due taxes. My next step is to find the owners address and see if they want to sell. Any advice before contacting the owners... I am very new to this and don't want to mess it up.. I plan to use the bigger pockets numbers tool and run the numbers on what I can most offer to meet my investing goals but will need some construction costs first. Hopefully if I get some interest, I'll be able to look around the property. I appreciate any advice you might have... [link] [comments] |
| commercial real estate maintenance Posted: 11 May 2020 10:17 PM PDT I manage a couple of commercial real estate properties. This is not my primary profession, which is not anything related to real estate or construction, so please excuse me if this is a silly question. The properties are NNN, but the landlord is still responsible for the roof and any damage from flooding. The properties are 4 years old each. One is located near Chicago, Illinois and is near Fresno, California. I am wondering if it is a usual practice to have some type of regular inspection (perhaps yearly) of the properties to monitor the status of the roof and also the major systems on the property - e.g., plumbing, HVAC, electrical and fire safety, or is this just a silly idea and I should just wait until a problem arises? If this is something that is done I would appreciate any suggested companies in those areas - if not appropriate to post to the forum then please message me. Thanks. [link] [comments] |
| If a new US RE company buys a property, can it take out of loan on that property? Posted: 11 May 2020 03:55 PM PDT |
| Questions on Starting Real Estate Investment Firm Posted: 11 May 2020 01:59 PM PDT As the sates, i'm looking to branch out on my own and start my own investment firm. I've been working in Real Estate Private Equity/Finance for 5+ years so have acquisition, disposition, and asset management experience, but dont have as much operational experience. My first question is regarding financing. Without h a track record with any lenders, how would I go about financing a potential first deal? Would I have to buy all cash/ go through a hard money lender? Whats the best way to legally structure each entity? I'm assuming until i get some track record, form individual LLC's. Do you do that on your own or have a legal team assist in the formation? Any other advice is strongly welcomed regarding formation and structuring as I am really in the preliminary phase of all of this. [link] [comments] |
| Can the time value of money explain real estate appreciation? Posted: 11 May 2020 09:20 PM PDT Can anyone link some papers that study the factors that drive real estate returns? I was reading this one by Peter Mladina. Is appreciation partly caused by idiosyncratic sector risk? [link] [comments] |
| Lender not allowing LLC transfer Posted: 11 May 2020 08:50 PM PDT So i created an LLC and a business bank account. Being the noob i am, i assumed it's enough to just deposit the incoming rent into the business account. I later found out that you actually need to transfer the property's title to the LLC in order to separate it from your personal assets. My loan agreement stipulates that i need my lender's consent before transferring the title, so i reached out to Chase bank. Chase flat out told me they won't allow it and I need to find another lender if i want to transfer the title. Now i'm sitting on one month's rent deposited in my business banking account and confused what to do next.
I want to find the simplest solution and avoid any run-ins with the lender. [link] [comments] |
| For those who wholesale, how many deals do you get a month? Posted: 11 May 2020 08:46 PM PDT How many deals do you get a month, and why would it be difficult for you to seal the deal? I see that people average from around 2-7 deals a month. [link] [comments] |
| Does anyone have advice in buying REITs? Posted: 11 May 2020 08:40 PM PDT |
| Posted: 11 May 2020 08:39 PM PDT To keep things short: wife and I are going on 5 years of marriage with a kid that turns 4 in October. She's been in the military this entire time and we've been renting due to moving around. We go back to our home state this December as she is getting out. I want to buy a duplex / triplex / quad and live in one unit to kick off my RE investment career. She's fine with just buying her "dream home" and being done with it, and she's definitely not into the idea of living in a duplex for two or so years before she can have her "dream home". We're 27 and 28 and have been renting for 5 years so I kind of see why she's ready to own and not rent anymore, but I'm so ambitious when it comes to this stuff. I want to move out of being an employee eventually and have my money work for me, I don't want to be the average American who works himself to death til he's 65 and retires, enjoys 5 years of his life and dies. Any of you experience guys/gals have any advice if you went through something similar? Also, she isn't against me investing in real estate, she just doesn't want to fool with it. The issue with that is - it's harder to come up with money to invest solo, also harder to get a second mortgage for an investment property when you have a primary mortgage already. Any advice helps. [link] [comments] |
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