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    Real Estate Investing: My first house hack

    Real Estate Investing: My first house hack


    My first house hack

    Posted: 07 Jun 2020 09:03 PM PDT

    I purchased a 5br/3b home in FL for 340k 3% down 30 year conventional, 4.375% interest / no points.

    • I spent $14.3k on closing costs, of which $10.2k was equity.
    • I spent $8.8k on repairs and improvements (new AC system, electrical upgrades).
    • I spent $13.5k on furnishings.

    My total invested to get the home up and running was ~$37k.

    I include utilities in the rent, they are ~6.8K/yr.

    I have averaged to collect $36k/yr or $3k/m in rent while I live in the master.

    The mortgage + utilities average $2820/m or ~$34K/yr. Thus my cash flow is roughly $2k/yr but if I move out I can cash flow $12K/yr.

    This excludes appreciation, mortgage paydown, and low effective taxes due to deductions. I also just remodeled a bathroom for $10k. I am confident if I resell I can get $375k.

    Does this sound like a good area to keep investing in? Does it seem like I am under charging on rent?

    My plan is to move out and rent the last room while I do another house hack.

    submitted by /u/jgang19
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    CRAIGSLIST SCAM! Make sure your house is locked after a showing!

    Posted: 07 Jun 2020 04:16 AM PDT

    I got a call from someone that said their parents had wired first month's rent and deposit to the contact on fake ad of my rental on craigslist. They had actually been inside the house. What must have happened was on a showing day one of the people that came to see the house had unlocked a window when they were viewing my property. They must've come back later and unlocked the house and left it unlocked for people responding to the false ad. That's how this man's parents paid the wrong person. I told the defrauded party to call the police and I would cooperate with any investigation. I never heard from them or the police afterwards though. Landlords: make sure all windows and doors are locked after you show a house.

    submitted by /u/nwa747
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    Looking for an owner occupied multi-unit spreadsheet calculator

    Posted: 07 Jun 2020 11:41 AM PDT

    Hi, I am wondering hoping that one of you might have a spreadsheet to help me asses the potential of a multi family investment property, where one of the units is owner occupied. I am wanting to hit that 2% and 50% rules.

    I have been using this amazing calculator, but I am unsure of how to modify this for an owner occupied unit: https://finomad.com/post/2018/4_21-ultimate-spreadsheet/

    submitted by /u/Reminice
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    4 Plex vs Duplex vs single family or larger multi

    Posted: 07 Jun 2020 02:47 PM PDT

    What things do you consider differently in a 4 plex vs a duplex situation vs single family home?

    I have a couple single family home rentals but want to get into something larger. My realtor told me "a 4 plex transaction is just like buying a duplex or single family home". This made me uncertain as to whether she has experience in 4 plexes or larger.

    What do you all think?

    submitted by /u/Chabubu
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    Dodged a Big Bullet - Meth Lab Basement

    Posted: 07 Jun 2020 05:10 AM PDT

    Hey all,

    Just thought I'd make a PSA out of my recent close call. I was about to buy a house in a wonderful neighborhood. The area has great schools, hardly any crime, very suburban and quiet. I'm getting excited about this house, it's the right price, great neighborhood - I want to close on this. Then, I do what my trusty real estate agent is always telling me to do - walk around the neighborhood and talk to the neighbors! This is why community is so important. I went ahead and walked around and found 2 older men that had been living in the area since the 70s. I introduced myself excitedly as I told them I was interested in the house on the corner lot. Then they both laughed and one of them said, "Oh, the meth lab?" My mouth was WIDE open covid mask, "wwhhhaaaattt?" I thought he was joking. He insisted he wasn't joking. Then I started doing research. A house that was a former meth lab is basically a chemical waste site. They can be highly toxic for years and wreck your health. The only way to fix them is basically to gut them out and treat the whole thing with even more chemicals. The house was not registered with the DEA as a former meth lab. I had to go to the local county police office and pay $1 to get phone records. Sure enough, a property management company has called the police due to suspected narcotics on property. The police show up and call for hazmat suits due to "active meth lab." INCREDIBLE. It was a mother cooking the meth actually, and her 2 sons aged 10 and 17 knew about it. Not only that, but the police tried to contact the property owner who swears that he never knew it was an active meth lab. The man had even rented it out after the lady and her kids got evicted to another family for 3 years. I'm not a lawyer, but I'm pretty sure he has a huge liability.

    Stay safe!

    submitted by /u/berbeebs123
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    Anyone know if it's possible to chance your address number?

    Posted: 07 Jun 2020 08:43 PM PDT

    A bit of an unusual question.... but does anyone know what the process is to change the address number for a home? I have a client who is spooked by all of the 4's in the address (4 is an unlucky number in Chinese culture). Any idea what that process would be like and if it's even possible?

    submitted by /u/ospreyintokyo
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    Writing off expenses in owner occupied two family

    Posted: 07 Jun 2020 08:01 PM PDT

    Hello,

    I'm in the market to buy a 2 Family and I would live in one of the units. How does writing off expenses work? For example if I trim a tree or cut it down because it's too close to the house or I renovate the backyard patio with pavers. Would I write off half of the expenses? Also how does it work with water if there isn't separate water meter?

    submitted by /u/genjix1
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    What to do if I can't find my first deal in the next year?

    Posted: 07 Jun 2020 07:40 PM PDT

    I'm about to renew my lease for one more year while i save up more money and look for deals. This is my original plan. But i look everyday and can't find anything that meets my criteria. If i don't find a deal should i maybe just consider a fix and flip?

    By deal i mean multi family.

    submitted by /u/diyastronaut
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    Advice | Possible First RE Investment

    Posted: 07 Jun 2020 08:42 AM PDT

    First time poster here, thanks in advance for any advice!

    My partner and I (both in our early 20's earning over 100k/yearly combined) would like to invest in real estate down the line, we currently don't have as much money saved as we'd like in order to begin. We live in North Jersey so housing is pretty costly unless you want to buy in a sh*t area.

    Even though we're not ready yet, I'm always looking online at properties for sale around here and stumbled across a small lake cottage (2bd, 1ba) for sale at just under $70K. The property was sold in 2017 for $18k, listed for sale June of 2019 at $125k and has been continuously re-listed at a lower price every few months since then. From the photos and description it seems the current owners did some updates (kitchen, bath, plumbing, flooring) and doesn't need much else done. The house is across from the lake, low taxes, and I just can't get it out of my head. It would make a great vacation rental/air bnb (and It wouldn't be such a bad thing to have a place to go on the weekends as we NEVER take vacations) as the mortgage cost would be low; the property is way cheaper than anything else we would have considered purchasing in the future. Again, if you're familiar with the area you know how expensive Jersey real estate is, especially North.

    I'm seeking advice as I've never purchased real estate and the thought of getting our feet wet before I thought we would is scary. We obviously don't have a realtor, haven't gotten pre-approved, etc. and as this is a lake property, the septic most likely can be shit and be a costly expense (description says septic as-is) I guess I just want to hear what a more experienced person would do if they were us. I don't want to look back in a few years and think I made a mistake out of fear.

    Does it make sense to look more into this? If so, how should I proceed? Is it normal to contact the listing agent myself and ask specific questions about the property? Should I ask about the septic? How much $ would you put into this?

    Literally any advice/comments are appreciated, the thought has been in our heads and I'm looking for outside perspectives. Thank you!

    submitted by /u/LionsHeart55
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    I make $41,000 annually, is it possible to obtain a loan for an apartment building that's worth +1Mil?

    Posted: 07 Jun 2020 07:14 PM PDT

    The apartment:

    • 12 units
    • $1,340,000
    • cap rate 6.3%
    • currently under contract
    • low rise
    • built in 1975
    • class building C
    • location: Anoka, MN

    At the moment, I'm currently making $41,000 (before taxes) annually. This will be my first time investing into real estate and was hoping some advice. Much appreciated.

    submitted by /u/gvue003
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    Can you invest in opportunity zones without capital gains?

    Posted: 07 Jun 2020 05:53 PM PDT

    i.e. can I invest in an opportunity zone property (duplex) with a mortgage?

    submitted by /u/redditOP69
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    FOMO or opportunity?

    Posted: 07 Jun 2020 01:51 PM PDT

    Hi all, first time poster looking to understand if I should seriously take a look at a potential opportunity that has opened up or just ignore my FOMO.

    We live in a duplex in a major city in the middle of town in a great neighborhood (generally walkable, stores around, lots of development going on). We've owned our half for ~3 years, have 25% equity. Our neighbor is moving out and selling their half...it has me wondering if this is an opportunity to begin a real estate investment journey. I don't think the price of the place would be substantially more than our original mortage. Maybe 10% more...We could easily cover another 20% downpayment, and we could probably negotiate something equitable given the lack of real estate agents. If we couldn't find a renter we could cover both mortgages without much issue - just wouldn't be saving as much. Our annual income pretax is ~50% of the original price of our house and we are generally not big spenders.

    It seems like it could be a good opportunity but I never considered getting into real estate at this point in my life so I don't want to rush something and get in over my head/make a poor financial decision. Any advice on where to start? Just would like to be able to bounce this off someone who has actual experience.

    Thanks!

    submitted by /u/JCGolf
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    Doing a private sale: Rental property that won't be going on the market at all. Who is my best bet for professionally handling all the paperwork: Real Estate Agent, Lawyer, or other?

    Posted: 07 Jun 2020 10:04 AM PDT

    Hey r/re,

    Doing a private sale: A duplex that will be sold to a landlord without a realtor or going on the MLS.

    All my purchases to date have used a realtor; however, I don't want to pay ~6% of purchase price just for the paperwork. However, I would feel much more comfortable to have a professional do it and ensure that it's done right.

    Is my best bet to go to a real-estate lawyer? Or just a realtor for a flat fee? (Do they do this?) FSBO site? Fee-only broker? Or is there another option?

    Would love to hear what others have done that have worked well for them!

    Thanks.

    submitted by /u/Terrik27
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    Cabins near Lake Travis, Austin, Tx.

    Posted: 07 Jun 2020 05:07 PM PDT

    Looking to buy a cabin either in Pilot Point, Texas or Lake Travis, Austin, Tx.

    We have been exploring gas stations as well (as I posted about this earlier) but it has run a dead end.

    What are the occupation rates for an Airbnb there? (Both Pilot point and Austin)

    UT, being a large campus, do college students like renting out these kind of Airbnb's for parties?

    What is the market like? Has Austin been over saturated?

    I would love some info in this! Thank you.

    submitted by /u/californiasummerwave
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    Investing as a High Income Earner.

    Posted: 07 Jun 2020 10:37 AM PDT

    Hello Everyone,

    I'm hoping to get some advice in obtaining financing.

    Here is my situation: My income has substantially increased after a career change. I moved from my 260k home to renting an apartment close to my job.

    I recently tried buying an 80k apartment that I could fix up and after a year, begin renting out. My family is small and we don't mind moving so we were planning on repeating this for a few years: (1) purchasing sub 100k condos (2) Fixing them up within the year 3) and then renting them out.

    The problem is when I tried obtaining financing, lenders didn't believe that I'm going to live in an apartment a third the price of my home when my salary just multiplied by 3. We shared how the apartment was near my new job and the renters agreement of my old home but it was to no avail.

    The only financing options was through an investor loan which had higher rates, ridiculous fees, and a large down payment.

    I'd like to avoid large down payments and fees since I'd rather my money be liquid.

    Am I stuck or are there options that I am not considering?

    Thanks!

    submitted by /u/engineerlawyerguy
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    Book recommendations?

    Posted: 07 Jun 2020 04:00 PM PDT

    Hi guys , I was wondering what books y'all recommend for real estate investing currently reading the book on rental property investing. Looking to add some books to read afterwards. Thanks

    submitted by /u/IPyrexxx
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    What happens in Pennsylvania when the appraisal comes in lower than the offer price? Offer has a mortgage contingency but no appraisal contingency

    Posted: 07 Jun 2020 12:05 PM PDT

    Hi All - Hope you all can take a quick minute to guide me here.

    Context

    I put in an offer on 4 off market properties in Pennsylvania to a single seller. Offer is for the total price and all the properties are listed on one contract so eg - I put in an offer of 400K and listed all the 4 properties in the AOS. Offer got accepted and I am getting individual loans from the bank on each property. Offer is the standard PA contract and has a mortgage contingency with $300k loan price. However it does not have an appraisal contingency.

    The bank is asking for individual prices of the property for these individual loans.

    I am pretty sure the appraisal for all 4 combined will come around $360k( the numbers worked for me still so I went for it, also I think I rushed :()

    Question 1

    What should I give the bank as individual property prices knowing they will get an appraisal for each property? anything to look out for here?

    Question 2

    If(or when) the appraisal comes in lower than $400k combined(lets say $360k) and so assuming the bank will now not loan $300k at 75% LTV per the AOS, would I be able to ask the seller to lower the asking price and if they don't (and I don't want to pay up the $40k difference), could I back out of the deal without losing my 12k total deposit?

    Hoping for quick responses since I have not send the EMD yet. Thank you so much in advance for taking time on a Sunday to help out.

    submitted by /u/rxzbiker
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    Help me negotiate this owner finance deal

    Posted: 07 Jun 2020 11:36 AM PDT

    So I found a house that was built in 1978, ,1500 Sqft 3/2 bth $120k it will rent for around $1300

    It's in perfect condition the only thing is that the interior is cosmetically outdated but that gives us room for forced appreciation.

    He is willing to seller finance at 20% down with 8% I interest for 25 years with the option to refinance out after 1 year

    We have the 20% down but how could we negotiate the deal to get a lower interest rate?

    submitted by /u/scmc96
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    Experience with Off-Campus Housing Market

    Posted: 07 Jun 2020 03:08 PM PDT

    Curious to learn from those of you who operated small to large multi-unit properties around universities and colleges.

    My main question would be, did you partner with the university at all? If not, why not pursue a relationship with the school?

    If so,

    • How did you create the partnership & in what capacity did you work together?
    • What did the university provide for you & what did you return for them?
    • Was the traffic of good quality and reliable conversion?
    • Was there a cost for placement from their leads or a discount required for the student placement?

    In general for those that have worked with students and schools:

    • How close to campus where you?
    • Was your building dedicated to students?
    • How often did you require a co-signer? Was that often the parents?
    • Want pain points did working with students & schools directly give you? What wins/successes?
    • At the time, was your portfolio wholly students, and is it now/still?
    • Other things you would share about working with students, schools, and the school year leasing?
    • Do you provide essentials quality and lower cost or higher quality and cost?

    Thanks for sharing!

    submitted by /u/L00mis
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    How/where would you put 200-300k to work in physical real estate?

    Posted: 07 Jun 2020 03:00 PM PDT

    Geographically flexible. For a beginner looking to build equity. Cash flow is a bonus.

    The obvious answer here is "buy a rental property". But some more specific nuances/recommendations would be great.

    I'm a beginner in RE who majored/work(ed) in finance/investment management.

    submitted by /u/Maserati_Marlin
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    Would this work? Mailers to owners of low value homes in high value zip codes

    Posted: 07 Jun 2020 02:36 PM PDT

    I do not have any experience with direct mail. I am just curious if anyone has been successful at doing something like this?

    I know of a very suburban, quickly appreciating zip code in a very hot city. I am primarily interested in the "ugly" or older houses in the best zip codes. (Think the 800 sqft, 2 bedroom house built in the 1930's, in a zip code full of McMansions.) My theory is that you can buy these homes and rent them at a huge premium to working class people who want their kids to go to good schools. I would hold this property for the rest of my life if I could.

    It is almost impossible to find property online or on the MLS like this, but I see it all the time when I am driving around. I also have a property spreadsheet from the County showing every property and its tax value.

    Would it make sense to simply filter for this zip code, under $xxx,xxx in tax value, and send the owners a letter asking if they're interested in selling? I would only offer tax value, which is generally a lot less than market values.

    I would be happy to send 500 letters if it yielded a single deal. Would people actually do this?

    submitted by /u/against_bernie
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    Why is property management so polarizing amongst residential landlords?

    Posted: 07 Jun 2020 02:20 PM PDT

    It's a mixed bag when it comes to property management on here. Half prefer to manage all their properties themselves and the other half won't touch a property without a management company, some will even pay more hiring an in-house property manager. Why is this such a polarizing topic in real estate investing?

    Coming from a small business world, I couldn't imagine owning my business and doing all the work AND being on call 24/7 for customers. Hiring employees and managers is to be expected for success. So when I started real estate, that's the first thing I did upon acquiring a new property, started looking for management companies. I was surprised when I came to online forums to find that so many people DESPISE property managers and do everything themselves. The greatest thing about real estate to me was the ability to outsource management at a fair price. What other industry can you do that?

    I have manager for my small business, I'm paying him $40k+ a year! I pay that because it makes my life easier, I don't want to deal with a bunch of min wage employees and customers asking for me. Same thing for tenants. What's the cause of this polarization?

    submitted by /u/JLiaaz
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    How to structure business

    Posted: 07 Jun 2020 02:04 PM PDT

    I am going to try and keep it short. My father is about to retire and move back home and leave 8 properties( paid off). He has always been hardworking and frugal but not the smartest in terms of taking advantage of tax breaks. I will be left in charge of the properties. Any good books or pdfs that I can access on how to best properly structure the assets, whether it be LlC, a trust, etc. Any guidance would be appreciated. I have a background in finance which is why he's leaving me in charge thinking that's its the same as knowing real estate 🙃

    submitted by /u/geodallastx
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    22M - EU Real Estate Investment advice

    Posted: 07 Jun 2020 03:23 AM PDT

    I currently work for a FAANG company and I'm situated in Dublin, Ireland. I've worked for about a year now and saved up roughly 35k so far. I am planning to invest into the real estate market soon, specifically rental properties to start generating a passive income. Ultimately I want build a portfolio consisting of multiple rental units. Having lived in Spain (Barcelona+ Ibiza), Germany (Frankfurt) Switzerland (Zurich), Netherlands (Rotterdam) and now Ireland (Dublin) I researched most into these real estate markets but I'm open to investing in another EU country if viable/beneficial. I have a couple of questions regarding EU investing, hopefully I've come to the right place:

    What would be a good annual ROI on an investment property?

    How does it generally work with requesting mortgages in the EU. If I possess a mortgage for one property, how easy is it to request more mortgages for new purchases, and to what extent?

    Is it easier for me to request a second mortgage in a country different to the one I requested my first mortgage in?

    Do you have any tips or strategy you could recommend for building a portfolio of rental units in the EU?

    Any help/suggestions are appreciated!

    submitted by /u/max13811
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    Selling to private buyers

    Posted: 07 Jun 2020 01:47 PM PDT

    It's me again. Here's my original post.

    I consulted a RE lawyer. He said to get a RE broker. Anyone have feedback to offer on this?

    What's the wisest thing to do here, in terms of an asking price?

    1) Roof will need to be replaced probably in 5 yrs or less. 2) One side of the shared fences with the neighbors needs to be replaced.

    Outside of that it's in an excellent area (has appreciated about 80k since I purchase it in Dec 2015) and one of the highest ranked schools is behind the house (I think that's why they want to buy it).

    I don't plan on putting any of my cash into any renovations. I am reserving all my cash for a future buy.

    With this information, is it better for me to just throw out a number (one Redditor said throw out $449k and deal from there), take the advice of two agents who if I'd had them list my house, they both said they'd list it for $375 (I assume they list lower to attract and then would take offers for higher?).

    More questions:

    1) Do we still do a home/pest/roof inspection? 2) If so, who pays for this?

    I've never done this before and I currently owe $280k on it.

    We are looking to do the transaction with real estate broker and circumvent an agent.

    I have two comps from two diff agents in my email but they were done more than a month ago.

    Any advice would be helpful!

    submitted by /u/kaffeen_
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