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    Wednesday, June 10, 2020

    Real Estate Investing: A realistic way to become rich in real estate?

    Real Estate Investing: A realistic way to become rich in real estate?


    A realistic way to become rich in real estate?

    Posted: 09 Jun 2020 08:52 PM PDT

    Okay let's cut all the BS out we see on YouTube. My wife and I are 23 and have a combined income of 100k. What is a realistic way that we can own atleast 5 properties within the next 5-7 years? I keep hearing the BRRR method but I live in AZ and I don't see many depressed homes for 50k. People like graham stephen who say you need 30 units to cash flow 50k a year. I can't even imagine how that would be possible to be approved for so many loans with a debt to income ratio like that.

    So what's the truth here? How can we actually get rich by doing real estate and not be on our deathbeds to see it happen ?

    Also, duplexes and triplexes are also rare out here

    submitted by /u/casaughn
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    People that self- manage 10+ units

    Posted: 09 Jun 2020 12:48 PM PDT

    Does managing these units require 24/7 coverage? I was looking at getting more into passive income but I was wondering if I would be able to go on vacation for 2 weeks at a time without being state-side to tend to tenants. I understand there are different levels of tenants and older homes require more maintenance but I'm just asking generally speaking.

    submitted by /u/holla09
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    Buying a home, inheriting Section 8 tenants

    Posted: 09 Jun 2020 09:50 AM PDT

    Good morning.

    Apologies if this isn't the correct place to post this.

    EDIT: I do plan on honoring their leases, I didn't mean I would try and break their lease in order to move in myself.

    I'm considering purchasing a 2 detached home/duplex property, but the homes are currently being rented to Section 8 tenants under rent control. My plan is to move into the property, but don't know how difficult it would be, or what legal steps I need to take to legally remove the tenants. I don't want to be forceful either. Any advice?

    500k list price, 2 bed 1 bath each. SoCal, near Inglewood. One tenant pays $1500, second tenant pays $900.

    Thank you all.

    submitted by /u/AHdez2388
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    [Question] Buying a home under an LLC and the 1% rule of real estate investing?

    Posted: 09 Jun 2020 08:25 PM PDT

    Sorry for the vague title, but I've got 3 questions.

    I've recently read a few books off the the PF reading list and I'm already very excited to plan for the future. The plan is to:

    1. Pay off all my credit card debt
    2. Invest in a 3-fund portfolio till i have enough for a 20% down payment on a house
    3. Form an LLC in Delaware and buy my first investment property that way

    Here are my questions:

    1. I keep hearing about this 1% rule of investing which makes no sense to me. "Don't invest in a house which you can't rent our for more than 1% of the total closing costs". Looking at the majority of houses for sale on Zillow.com, the estimated rent prices of the house are maxing out at 0.5% of just the asking price, not even the total closing price. I even verified using craigslist that apartments in that area were actually being rented for that price. Am i missing something here? How does one ever hit that 1%? Is buying and flipping foreclosed homes the only answer?
    2. Assuming I did find a house that fit the 1% rule. Assuming a 30-year fixed loan, constantly getting 1% in rent every month means that I'll be able to repay the loan in a little over 8 years (100 months). Does this sound right? It seems like I'm missing something here as well. Does one (or an LLC) just stick to the 30 year timeline and retain the net profit every month?
    3. Let's say I have a few homes under an LLC and have enough net income coming from my assets that I no longer wish to work my day job. I understand that one can write off phone bills, car payments, and travel expenses as a business expense under the LLC no problem, but how do people eventually "retire" and just use the funds from the LLC for their remaining expenses (grocery bills, cinema, bars)? Do they start claiming a taxed salary from the LLC? Do they just move over all their assets from the LLC to under their name?

    Thank you, and sorry for the lengthy post!

    submitted by /u/d1rast3s
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    Buy now or wait for later?

    Posted: 09 Jun 2020 08:16 PM PDT

    I'm interested in buying raw land or possibly a house that sits on atleast an acre of land if it's cheap enough. I've been looking for the last couple months in the Santa Cruz mountains and have found listings but none that I necessarily want to purchase.

    My questions is for all those with experience in real estate and it's fluctuations is if covid will lower RE prices in the future?

    I keep hearing people say that the Bay Area is facing an exodus now that techies can work from Home. Does this change and a possible economic downturn from covid mean prices will be better in a year from now?

    Any tips or advice helps!

    Thanks

    submitted by /u/sallgood92
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    How much should you invest in a property?

    Posted: 09 Jun 2020 07:41 PM PDT

    Bear with me. I never invested in real estate (except for REITS). I do want to buy an investment property towards the end of the year.

    I asked a question previously about investing in a 1 bed/1 bath condo and the general consensus was that it wasn't a good idea.

    I was told it was a good idea to invest in multifamily homes and to potentially live in one for a year and rent out the extra unites. Most of the multifamily homes in my area are 400,000+ and the ones 2 that I found in my area that are 150,000 are both in very rundown neighborhood with a lot of crime. So, I may have to take a raincheck on that. I know I can also buy out of state, but I'll ask a follow up question on that next time.

    So... this leaves me to single family homes. In my area, I can find a decent single family home for these prices:

    -A couple decent ones for $65,000 to $80,000

    -Quite a bit of really good ones for $175,000 to $220,000

    -A lot of really high quality ones for $270,000+

    So, taking those prices into consideration... what are the pros and cons of investing in a properties with those kinds of costs? Would it be smart to invest in the house that is $80,000 with 2 bedroom and 1 bath, for example? Or would it be smarter to invest in the house that is $175,000 with 3 beds and 2 baths for example?

    submitted by /u/thatanimeguy1
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    Should I use HELOC for next investment home downpayment or use my cash?

    Posted: 09 Jun 2020 02:56 PM PDT

    To put it simply, I already own a home that I live in with my wife. We did 3% down equally around 7,000. I want to get my second property and rent this out to tenants. What would be the better option, do a lump sum mortgage payment on my current house, putting me at 20% build equity then doing a HELOC for a down payment for the second property. Or, use the cash I would have to build the 20% and use that for a 20% downpayment on the second property. Given that investment property requires 20% initial downpayment.

    My thought process was that my interest payments would go down for my initial property, meanwhile the tenants pay for the 2nd mortgage, and cash flow is used to pay for the HELOC. But then I thought, maybe a HELOC would be too risky ?

    What are your thoughts? I'm very new to real estate investing. I'm 23 and want to get started early... thanks!!!

    submitted by /u/casaughn
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    To invest or not to invest

    Posted: 09 Jun 2020 10:32 AM PDT

    With the way things are going right now, will it be a good idea to buy property? I live in Texas, my wife told me we've had the most new covid-19 cases, if it matters.

    submitted by /u/Junior_S1
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    How should I start?

    Posted: 09 Jun 2020 03:56 PM PDT

    Hello, I'm an 18 year old college student working two jobs right now. I make around 600 a week cash. So roughly 2400 a month. I really would like to start in real estate. However I live in NYC. I don't know my options here but I would really love to get an investment property out of state or at least out of the city. What should I know or any tips I need? Thank you. I have 10k saved up for the down payment of a property and I also have another 15k in stocks, reits, and etfs.

    submitted by /u/Kevin_da77
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    Any investors who wholesale?

    Posted: 09 Jun 2020 02:06 PM PDT

    I'm currently 19yo and working full-time, but now realize that I have a genuine interest in real estate. I'm only able to put $200 in my savings each month, which is damn near impossible to start investing with rental properties or flipping. Because of this, I'm looking to start off with wholesaling. What is your honest opinion/experiences with wholesaling properties?

    submitted by /u/SwayzeBG
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    Financing and impacts to credit

    Posted: 09 Jun 2020 09:57 PM PDT

    Regardless of whether you are doing traditional or BRRR, you are ultimately financing. Each time they want to run credit. Each pull impacts your score and then the rate you get. Then the less NOI you can achieve. Aside from running this through an LLC, what have others seen and done to avoid hurting your credit?

    submitted by /u/halcyon918
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    How to sell a Contract for Deed Note before the balloon?

    Posted: 09 Jun 2020 04:09 PM PDT

    Thinking about selling my free-and-clear rental via contract for deed and already have two solid CfD offers in, but part of me just wants the cash now. Anyone here have experience selling their CFD note rather than waiting for the balloon/anyone know how that typically works? Would it be better to just do a small refi rather than trying trying to sell the note to someone?

    submitted by /u/mn_sunny
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    Is it worth investing in New Jersey?

    Posted: 09 Jun 2020 01:46 PM PDT

    I'm 26 years old and want to my first house. I want to get an FHA loan 3.5% and put down $20,000. I'm looking for a 2 family home in New Jersey where I can live in one unit and rent the other. But, all the property in New Jersey is mega expensive. Mainly because of the property taxes. It's not unusual to pay $14,000 a year in property taxes here.

    submitted by /u/ThePigsPajamas
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    First time Rental Investor!

    Posted: 09 Jun 2020 07:03 PM PDT

    Hey guys!

    -29 years old
    -I own a home that is paid off worth approximately $115k
    -Credit score is good
    -Little bit of money put away
    -Very little debt
    -Girlfriend is a property manager of 220 units

    What I am thinking about doing is leveraging to acquire rental properties. Getting a mortgage with 20% down to instantly turn around and rent out. If that goes well, then refinancing my current home to acquire a couple more and renting out my current home and moving into an apartment.

    I am new to educating myself on this all and any insight would be greatly appreciated. I was thinking of hiring a lawyer to draw up my lease and putting him on retainer for possible future legal issues. I also have connections with tradesmen,

    Thoughts on the idea? Anything I might not be aware of? Any additional insight?

    submitted by /u/BdonCrisp8
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    Fix and flip in nyc?

    Posted: 09 Jun 2020 06:27 PM PDT

    I was wondering if anyone has any experience and wouldn't mind sharing.

    Also how are costs for SFH? I read online it would cost on average 100-200 per sq ft, does that seem right? Is it profitable at the end?

    Thanks!

    Edit it'd be done with a GC, not myself. My hands suck so much I miss while shoving food in my mouth sometimes

    submitted by /u/soobak4u
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    C2P loans question?

    Posted: 09 Jun 2020 02:28 PM PDT

    Long story short. I'm in the early stages of shopping for sites to build myself a custom home. There is a subdividable plot in an ideal location that can accommodate 3 homes. One will become my primary. I would like to build out the other two lots for resale. Can I do this on one C2P loan or do I have to do the C2P on on the primary and a regular construction loan on the other builds. If its option B, is there a work around if I wait and if so how long do I have to wait or how many C2P can one qualify for?

    submitted by /u/letgomygrego
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    Boston Development Questions

    Posted: 09 Jun 2020 06:13 PM PDT

    I am from NYC but have lived in Boston for 3 years in the past. I have been exploring different markets to see if there are any development opportunities out there. I thought back to my time in Boston and immediately though of a parcel of land that would be interesting to look into.

    This parcel is on Harvard Avenue in Allston, MA - a location within the Boston Metro that is zoned for CC-1 (Community Commercial Subdistrict). Boston's Zoning Code defines CC-1 to provide "a diversified commercial environment serving larger markets." This seems pretty vague. Does anyone who have experience in this market know what the CC-1 actually means?

    Section 51-44 of Boston's Zoning Code also says:

    "Establishment of Areas Within Which Planned Development Areas May be Permitted. Planned Development Area ("PDAs"), as described in Section 3-1A.a, are permitted within the Conservation Protection Subdistricts, the Western Avenue/Soldiers Field Road Community Commercial Subdistrict, the Allston Landing North Economic Development Area, the Allston Landing South Economic Development Area, and the Guest Street Local Industrial Subdistrict. PDAs are not permitted elsewhere in the Allston-Brighton Neighborhood District. "

    Is this explicitly saying that no redevelopment is allowed in the neighborhood except for those areas that already have redevelopment planned for?

    Additionally, I have a few questions about the market to those who have experience in developing in Boston:

    • How active are mid-size developers (i.e. developing 10-30 units rental apartments)?
    • How difficult is it to get construction permits? Are expediters required?
    • How does the local government view developers?

      • Are there unique politics going on? (e.g. local government, labor unions, etc. )
    • Are there common variables specific to this market that can commonly make or break a deal? (e.g. in NYC, high construction costs and high land costs are usual variables that force developers to demand higher prices that are sometimes impossible to achieve)

    • I expect most buildings have their facade's landmarked by the city or state - Is there a database for the city that might help me find more info on the parcels? (e.g. NYC has Zoning and Land Use Map which gives you flooding details, landmark details, and anything associated with zoning - https://zola.planning.nyc.gov/about/ )

    Would love to hear from you guys

    submitted by /u/inspectaman
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    Using penalty-free IRA withdrawal to purchase property?

    Posted: 09 Jun 2020 12:12 PM PDT

    Hi all, I'm 39 years old, married with three kids. Live on gulf coast florida for the past 3 years. Wife and I want to get into our first investment property (may be long term rental / annual lease but we are also looking at airbnb). We airbnb'd our personal house for half a year last year and it was surprisingly profitable. (I became a Superhost). I also owned a 3 family way back in 2005 which I sold. So I have *some* experience with income properties.

    I don't have a ton of free cash, though, or at least I'd like to kind of preserve what I have. Retirement funds (IRA / 401k) are closing in on 700k however. I was debating taking out 60 or 70k under this year's coronavirus relief to use as a 20% down payment on an investment property, that would be about 10% of my portfolio today. Any reason not to do this? Assuming we find a good house with a good cap rate. I see it as just shifting investment money from my mostly index funds to real estate. The markets and my portfolio as of today have basically recovered from the COVID downturn (which is crazy to me) but I feel like I'm not transferring at a loss right now. From what I've read I'd pay income taxes on 1/3 of the amount for the next 3 years, which is manageable.

    I was debating an equity line on my primary residence for a down payment but if I can avoid it and increase cash flow on the property it gives me more breathing room.

    Anyone considered doing this? I would normally never do this because of the 10% penalty which is painful, but that's not an obstacle through the end of this year.

    submitted by /u/hallo_its_me
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    Looking for advice on inherited property

    Posted: 09 Jun 2020 09:24 AM PDT

    I recently inherited took on a project for a family member of a plot of land, and I am trying to figure out what the best course of action is to take with it in order to maximize what I get out of it.

    The relevant information about the land is: The land is about 25 acres in what seems to be a very desirable suburb of a very desirable city to live in. Most recently, the property was assessed at a value of $1.1 million (2019).

    I have some background in business, so I understand the basic concepts of investing and such, but I do not know much about real estate, so I'm looking for suggestions as to how to get the most possible value out of this inheritance plot of land. As I see it, I have 3 options:

    Option 1: Do nothing and hold the property. Based on the history of the property value, it seems to have appreciated quite a bit in the last two decades and I have reason to believe that it will keep appreciating (based on demographics of the suburb and larger urban area).

    Option 2: Find a buyer for the entire property.

    Option 3: Develop the property.

    Option 3 is the option that interests me the most because I feel that there might be the most profit potential there, but I have no idea where to even start with that. I was hoping that this sub would be a good place to turn for some pointers in the right direction. Basically, what are the steps to developing a property into multiple homes and selling them, and is this my best option? I am literally starting with zero knowledge, so any advice is appreciated. Thanks in advance!

    EDIT: Changed inherited to denote that it was not actually a legal inheritance from somebody who passed away but a project i inherited.

    submitted by /u/johnmayersalmostdead
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    New build 3 bed 2.5 bath townhome, $1600 PITI, $100 HOA, rents for $2300. Good first investment property?

    Posted: 09 Jun 2020 01:07 PM PDT

    New build 3 bed 2.5 bath townhome, $1600 PITI, $100 HOA, rents for $2300. Good first investment property?

    submitted by /u/ElJefeBets
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    Vehicles left in a property

    Posted: 09 Jun 2020 10:23 AM PDT

    Hey guys, looking for some advice. I recently purchased a property to flip with a partner of mine. The seller is leaving mostly everything in the house, including a 1960 Thunderbird, and a 1972 Honda motorcycle. He parked them in the garage 40 years ago and hasn't moved them since then. After asking several times if he was absolutely sure he didn't want to keep them, or at least think about it some more, we went ahead and had them towed to my family's property. The seller has no idea where any of the title work for the vehicles are. He is willing to just let us have them but am concerned we won't be able to do anything with them without and title or paperwork being transferred. Has anyone ever encountered anything like this? We are in Tx if that makes any difference. Our intention/hope is to restore the Thunderbird, or to sell it to someone who can and my brother wants to keep the bike for himself.

    submitted by /u/EddieM93
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    Is it not smart to buy property in another state?

    Posted: 09 Jun 2020 12:00 PM PDT

    Currently saving to eventually purchase a duplex/triplex for some type of passive income, but due to high home prices where I live, would it not be ideal to invest in RE someplace else?

    submitted by /u/BabyPluto510
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    How to start?

    Posted: 09 Jun 2020 11:41 AM PDT

    Will be graduating from college in a few months and have a good paying job lined up. I have a great credit score and a bit of money saved up for a down payment. The area I live in has some of the cheapest houses in the state of Texas. Does anyone have any tips on buying a first house to rent out?

    submitted by /u/radparr
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    What kind of tax you pay for your house in UK?

    Posted: 09 Jun 2020 01:30 PM PDT

    Say mortgage is fully paid, what else do you have to pay on a monthly/annually basis?

    Do you pay council tax as well on your house regularly?

    What else?

    tia!

    submitted by /u/chezjvr
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