Real Estate Investing: Finally got around to breaking down my first deal |
- Finally got around to breaking down my first deal
- Loan for an investment property?
- Where do you buy if your area is priced to high?
- How to seller finance a property which needs rehab?
- Order of operations - refi and new home purchase
- Anyone taking/taken a class with this book?
- Single family vs multi-family
- Next door neighbor in duplex might be selling next year
- Probate sale. "No court confirmation" ... what does that mean? Why is that good?
- Advice on investing in properties with a friend?
- Beginner Question - Partnerships
- Hit up weekly to sell my Duplex; how do you know when to sell?
- Those who have invested in property, how did you find the right areas? How did you check the area for development etc
- Minimum Profit on Rental Property
- Rent from ourself?
- What is your ideal composite leverage percentage?
- Swap rates for a new property?
- Is it Possible to transfer the Title of my Home to my son but the Mortgage and Payments stay under my name?
- "Delayed Financing" possible right now?
- Are there any cash positive properties that make for bad investments?
- Anyone Had A House Lifted/Elevated?
- Would you invest in a small town of less than 10k?
| Finally got around to breaking down my first deal Posted: 28 Aug 2020 08:08 AM PDT I've been lurking on this sub for a while now, but have finally had a few moments to write out a bit on my first "real" move into real estate investing. I've been renting out a condo that I own for a while now, but last year decided to take the plunge into more serious real estate investing, with a goal of "exiting" my 9-5 by 35. About my situationI work fully remote for a tech company, so it was very easy for me to consider self managing a property while still working full time because of the flexibility with my schedule. I chose to move out of state to Wyoming, since changing my residency from Colorado to Wyoming netted me an instant 4.63% raise due to Wyo not having state income tax. I chose Wyoming because it has all the same stuff I love about Colorado (great outdoors, lower cost of living, friendly people), but without the droves of people that have descended upon the front range. I also think Wyoming is poised to grow in the coming years (especially so now with COVID). For those of you that don't know, Wyoming is in a bit of a pickle with oil and gas on their way out; it's left the state with a large budget deficit meaning our government needs to explore other options for revenue. One of those options has been cryptocurrency, and in fact Wyoming legislators have been incredibly open to brining in cryptocurrency businesses - leading to us having some of the most forward-thinking cryptocurrency regulations in the country. I think in general tech will surge in this market due to the extremely low cost of living, with great quality of life activities available to employees (tax rates don't hurt either). The DealSo anyways, we're here for the real estate, not my life story. I knew early on that I wanted to buy in Laramie; it's close to home, has the only university in Wyoming, and has great small town vibes paired with lots of stuff going on thanks to a sizable college student population. My requirements were fairly basic:
Laramie has stayed fairly price stable over the years, seeing a modest bump in prices thanks to spillover from the explosion in the front range. Rent here is affordable, but so are the houses so it's pretty easy to buy something that cash flows. I started my search by seeing a few duplexes or houses with "mother-in-law" suites, but none of these were quite in the area that I wanted, and lacked the "charm" that I was looking for. What's more, I quickly found that houses were getting bought faster than I had anticipated. There was a listing that I kept going back to, aptly titled "diamond in the rough". It was an old house from 1890 that had been split up into 4 units at some point, but it still needed a lot of work. The 9000+sqft lot was completely overgrown, and you could barely see the house from the street https://imgur.com/a/U0P1i4v. Inside some units had been renovated, but the main floor units were both in need of some serious renovation (toilets weren't installed, carpet in one of the kitchens that needed to be torn up, etc). There was also a huge addition built on to the back of one apartment which just added to the overall funkiness of the place. The more I looked at it though, the more I was starting to see the diamond. Locationwise it was exactly where I wanted to be, and at just 1 block from campus I would always have students to rent to. Pricewise it was well under the average cost in the area at $303k, and once all four units were up and running it would be cashflow positive, and likely generate $80k+ of equity. To make a long story short, I put in an offer, and after 30 days of inspections and questioning my sanity the house was mine! Where are we now?It's been just about a year, and so far I've met all of my targets. I'm living in one of the main floor units (the one with carpet in the kitchen... it's still there for now haha), and did a full remodel on the other main floor unit into an Airbnb that is simply killing it. As an apartment it would maybe rent for $500/month, and so far it's averaged nearly $900/month (the best month in July was over $1400 though). The two upstairs apartments are rented out to long term, young professionals that take great care of the place, and in total bring in another $1270/month. We're well on pace to net over $25,000 this year, with the Airbnb only operating for 3/4 quarters. In the immediate future I'll be turning the front two rooms of my apartment into an additional Airbnb, and I'll be commandeering the funky addition. Based on experience, I know that economies of scale will mean the cost of running the Airbnb will decrease as more units are added, and my goal is to eventually hire someone to take care of the management. There's still loads of yard work to be done, but I'm already eyeing up other properties and hope to add at least 2 more over the next year, and refi this property to access some of the newly built equity! If you made it this far, thanks for reading my saga! I'm excited to be on this path, and am looking forward to the next 6 years of hard work >< [link] [comments] |
| Loan for an investment property? Posted: 28 Aug 2020 09:20 PM PDT I currently rent out a room at my parents house, and plan to save up for another 2-3 years. I was thinking about purchasing a 150k triplex in my area and rent out all 3 units. Which loans would be the best for this? I live in NJ if that helps. The reason i want to do this is because the rental income will offset the rent im paying at my parents house, my car payment, and a great deal of the mortgage. Would this be worth it? [link] [comments] |
| Where do you buy if your area is priced to high? Posted: 28 Aug 2020 09:11 PM PDT Say, for example, there's condos that are really small still going for like 350k and you can only rent out for like 1500 a month. That's not good cash-flow. What do you do when an area becomes too hot? Do you push out a bit further on the next best thing and shop for a good deal? I read a lot of people talking about super ultra cheap plexes in like Colorado or Ohio etc. Making insane cash return on small investments. [link] [comments] |
| How to seller finance a property which needs rehab? Posted: 28 Aug 2020 11:17 PM PDT I've found a seller who might be interested in seller financing his property. Balloon payment where I'd have to get a loan from the bank would be 5yrs, and the property needs about 80k in rehab. If the seller is holding the a mortgage in first lien position, where/how do I get the money to rehab the property. Most private money lenders I've talked to do not want to be in second lien position or wait 5yrs to get their money out of the deal. How would you structure a seller finance where rehab is needed? [link] [comments] |
| Order of operations - refi and new home purchase Posted: 28 Aug 2020 03:58 PM PDT Hello, I'm trying to take advantage of the low interest rates right now. We currently have a 3.5% rate on our primary residence. I can refi now and bring it down to 2.625%. I'm also interested in purchasing a new home and have been quoted a rate that I'm happy with. My question comes to timing. I've heard some folks say that when you refi, you are expected to stay in the home for a year before moving. Ideally I'd like to complete my refi and look for another home 2-3 months later. Not sure if it makes a difference, but we are hoping to have a baby next year so therefore would need the additional room. I guess my question is: do you really need to wait a year? [link] [comments] |
| Anyone taking/taken a class with this book? Posted: 28 Aug 2020 08:38 PM PDT "Professional Real Estate Development | The ULI To The Business" by Richard B. Peiser and David Hamilton I'm unable to take a course and would like to find a way to engage in dialog around the material in the book. Also curious of anyone's thoughts having read the book and how that impacted their investments. [link] [comments] |
| Posted: 28 Aug 2020 04:35 PM PDT Hello everyone, I am looking to get my first investment property in the next six months. My mind was really set on a duplex, but I've been swayed a lot and now I'm really unsure. I am now split between a single family, duplex or fourplex -- so basically everything. Here is some information. Age: 24 I wanted to get a duplex around $320k, have one side pay $1200 while I paid $800 to reduce my current cost of living. But then I started thinking about fourplexes in the $400k, which could be cash positve from $350 to $650 a month depending on the deal. However with this, I would NOT be moving in -- so I would still have to rent a place. This is because all the fourplexes are in really bad areas -- and it's not a step I want to take back in life. But lately, my mind has wandered to single family homes. My main job is IT related, but I also run a ten unit apartment compelx, and I manage luxury high rise rennovations (ground up rebuilds basically, same employer for all three jobs). So Ive got a lot of experience in rennovating, and I've got a good crew of contractors already. I could buy a single family 3 bed, 2 bath for around $200k -- put in $30k and live there for a few years, with apprecation and a new appraisal the value of that could make more sense than even a fourplex. However, with a single family I would pay MORE than I do now -- but at least it would be towards equity. Then I would rent it out, and get my second property. So I'm really split. Ultimately, I would love to have a place I could work on and make nice how I'd like -- but I also really want to make smart investments. What do you guys think? [link] [comments] |
| Next door neighbor in duplex might be selling next year Posted: 28 Aug 2020 09:27 AM PDT I live in one portion of a duplex in Seattle and the second half might be going on sale next year. The second half would be listed for mid 700s and my wife and I are contemplating purchasing it as a rental investment. I understand I need to talk to a financial advisor first but wanted to get some quick advice from this community as a first step. What would be the biggest hurdles to overcome if we decide to put in an offer? A little about us: Combined income of at least 230k (this is minimum because of commission fluctuation) avg has been closer to 250k-270k Purchased first of of duplex in 2018 for 715k Should have about 100k max for downpayment. My biggest fears are that we cannot ensure the rent covers mortgage and have to sell it within a year or two. [link] [comments] |
| Probate sale. "No court confirmation" ... what does that mean? Why is that good? Posted: 28 Aug 2020 10:44 AM PDT Anyone here purchase a home that was sold via probate. The listing agent is marketing the home as "no court confirmation" - can anyone here clarify why that's a good thing? And why do some probate sales need court confirmation? My understanding of the situation is this means the person who passed had a will set up and the state does not need to get involved (ie. no court confirmation). Whereas, if someone passes without a will, the sale can be trickier bc the state / court needs to approve the transaction, to ensure it was arms length, a fair price, etc. [link] [comments] |
| Advice on investing in properties with a friend? Posted: 28 Aug 2020 02:18 PM PDT Before I get a bunch of comments saying just dont do it bro -- I'm gonna do it so don't waste your breath Any tips on how to best make it work? We've been friends for a long time. We've worked on projects together before. In fact we already have a shared LLC and all of this has been fine. It isn't someone I'm magically gonna learn is lazy or whatever. Is there anything specific we should consider when going into properties together? Thanks [link] [comments] |
| Beginner Question - Partnerships Posted: 28 Aug 2020 01:48 PM PDT I have a acquaintance that has been doing flips and rentals. I am looking at adding a couple more rentals to my portfolio and he is looking for a partner on some upcoming jobs. My prior rentals have all been owned and management by myself. What do you guys do with partnerships? What kind of things are in the contract/agreement. I've been thinking about this like insurance payoff in the event of a disaster, how decision making is handle, what to do if one side things it's time to cut and run. Is there a good site or boiler plate agreement I could use to get started. I'm almost certainly going to speak a lawyer, but wanted to get some idea of what to look for ahead of time. I trust the guy, but everyone can attest to the fact that sh*t happens. I want to make sure all my bases are covered. I'm in Georgia, US if that matters. [link] [comments] |
| Hit up weekly to sell my Duplex; how do you know when to sell? Posted: 28 Aug 2020 08:22 AM PDT I've had a Duplex for almost 2 yrs; my 4th rental, but first that I didn't buy as a primary originally. I've never sold any, just been buy & hold. Anyway, it's in a relatively hot market, and I've always gotten a few nibbles asking if I was looking to sell. But it's escalated at this point to be at least a couple times a week. It cash-flows well, but obviously I have a price that it can be bought from me. I just don't know exactly what that should be. How do you price a property when you're not a motivated seller? Data: Monthly: Very few comps, but closest is for sale at $320k; which at $18.6k NOI from last year would be roughly 5.8% cap rate. Biggest reason I'm considering it is because my w-2 has made me move and it's no longer local. I would use any gains to reinvest. I've always been on the buyer side; never the seller. So open to any advice. Thanks! [link] [comments] |
| Posted: 28 Aug 2020 05:33 AM PDT I am looking to buy a place soon and I have a price range but I'm trying to find an area that works. I was wondering if there was any websites or anything on how you researched the area and had proof and knowledge of development plans. Before I buy the place I want to see that there are plans for development ect I just wanted to see if you guys had any great tips or research material to share [link] [comments] |
| Minimum Profit on Rental Property Posted: 28 Aug 2020 03:16 AM PDT Im currently refinancing my primary to save $200 per month and 1.5% on the interest rate. I will stay here for another year or two. Then i will buy a new home and rent this out. After mortgage/insurance/taxes/PMI/HOA fees I will be able to be just around $100 per month profit. Is this a sufficient amount of profit per month? I know $100/month is not much, but honestly i wouldn't even touch the profit unless needed for capEx, vacancies, etc. But the big advantage is having somebody pay down the mortgage. Also what are some tax benefits that I would benefit from? I appreciate all advice. Thank you. [link] [comments] |
| Posted: 28 Aug 2020 06:32 AM PDT My wife and I live in one unit of a duplex we own. The other unit is recently empty. My wife is self employed and works from home but the space we live in is not quite large enough for us and her office. The empty unit in our duplex is a cozy 1BR that would make a great office space from which my wife could run her business. My question is, can we rent the space to ourselves? If so, what legalities do we need to consider? And, if we can rent our own space could we also run our investment activities out of that office? [link] [comments] |
| What is your ideal composite leverage percentage? Posted: 28 Aug 2020 04:56 AM PDT People talk frequently about the potential upside of using leverage, but also the dangers of over leveraging. So obviously there is a need to strike a balance. That being said, what would be your ideal composite percentage of leverage if you had a portfolio with multiple properties? [link] [comments] |
| Swap rates for a new property? Posted: 28 Aug 2020 12:16 PM PDT I'm looking at a new property and the bank just quoted me 3.5% for 10 years using swap rates? Have never done a transaction using this type of financing. Does anyone know how this differs from a conventional loan? [link] [comments] |
| Posted: 28 Aug 2020 05:16 AM PDT Hey, Im trying to gift my house to my Son. He's 26 and doing well. Id like to transfer my title and deep to him so he can rent it out but id like to keep the mortgage and payments under my name...is that possible or even legal? I dont want him to have to pay for the mortgage or anything, i simply want him to enjoy it and have it under his name while i pay for it. [link] [comments] |
| "Delayed Financing" possible right now? Posted: 28 Aug 2020 11:10 AM PDT I'm looking to purchase a house from a wholesaler, who wants cash of course. I can purchase in cash, but I want to immediately do a Cash out Refi (Delayed financing) on the property. Property doesn't even need any work. I could REFI the next day after buying with no repairs and pull money out Are lenders giving people trouble doing this at the moment? What interest rates are you seeing? And is 75% LTV still the max amount? [link] [comments] |
| Are there any cash positive properties that make for bad investments? Posted: 28 Aug 2020 10:47 AM PDT I live in a small town where housing prices have gone through the roof over the past 5 years. Everything is expensive to buy, and consequently renting is also quite expensive due to a housing squeeze. I'm hesitant to invest in a property because i know prices have inflated over the past while, but running the numbers I've realized I could theoretically put a down payment on a small bungalow and rent it out at a small (ca. $100-200) monthly profit. Notwithstanding any major issues with a property; is any property purchased, which results in a positive cash flow, a good investment? Or are there certain criteria that, when matched with a positive cash flow, make a property a valuable investment? [link] [comments] |
| Anyone Had A House Lifted/Elevated? Posted: 28 Aug 2020 10:09 AM PDT Couldn't find an answer to this in the archive so here goes: Area: NJ shore/central NJ. House: 4bd/2ba, 1600sqft, asking price is 250k. Located in a FEMA flood zone and would require an elevation of 13ft. Has concrete steps in front, rectangular shape. From looking at Zillow, it seems that elevated houses with a garage have a markup of at least 200k compared to non elevated ones when comparing for same layout, bathrooms, bedrooms, in the same town. One house elevator gave me a quote of $100/sqft, including garage, which seems about right based on the other research that I've done. Whole job takes 4-8 weeks. This particular house would then cost 160k to lift. The numbers seem to work: buy for 250k, put in 150k to lift and let's say 50k renovations, all in for 450k, and refinance later for hopefully 500k to 600k (yes there are 600k comparable houses that are lifted in the same town). Has anyone had any experience with this? Would a 203k loan be a good way to go? Any particular things to be cautious of? [link] [comments] |
| Would you invest in a small town of less than 10k? Posted: 28 Aug 2020 08:23 AM PDT Hi everyone. This is my first post in this sub and I'm still in the learning phase of real estate investing and I am trying to find my market. Next year my husband and I are moving to a major state university town in the Midwest for our jobs. We are looking to invest in a town right outside of it (10-15min drive to the college town) and it has a population of only less than 10k. People live in this area for the excellent school system because the system in the college town is not desirable. It looks like there are plans for development in the area over the next at least 10 years and the population has been growing fairly consistently over the last few years as well. When I look at SFH rentals on Zillow there are not very many... which could mean that there is a significant demand or no demand at all ... I'm not sure how to tell except to look at Zillow daily and see how long a listing stays up... so if you have tips on how I might be able to understand this better I would be so grateful! We are hoping to buy a duplex (brand new) with an FHA loan and rent the other side. I need to go through the numbers in detail to understand if we will cash flow but my main question is would you invest in this area knowing the details above ? [link] [comments] |
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