Real Estate Investing: Why do people buy low cap rate properties? |
- Why do people buy low cap rate properties?
- Glut of properties falling out of escrow
- Is Zillow not allowing new users to use their API for GetSearchResults?
- I want to start my own construction company
- Advanced Real Estate Books Recommendations
- Anyone invest focused solely on appreciation?
- Contractor Refuses to Provide W-9
- [HOUSTON, TX] Tenant want to move out 6 months into lease but agrees to pay rent. Is this ok?
- Need guidance in commercial property investing
- Ballparking major upgrades to 3 family built in 1910
- Correlation between household income and property value?
- What are the steps to purchasing an piece of property?
- How soon after getting in contract do you usually have to put full amount in escrow?
- Property owner requested I send contract in the mail?
- First Time Investor - Need Insight
- Is it bad to lowball?
- With so many companies offering remote work, which cities are most attractive from a real estate investment perspective?
- Deduct closing costs as expenses?
- I can’t afford PropStream what else do I use to skip trace
- Audiobooks for beginners?
- Connecting with RE Private Lenders
- Deal Analysis and Taxes
| Why do people buy low cap rate properties? Posted: 16 Oct 2020 05:47 PM PDT For the past 2 years in my city, I've seen tons of commercial properties sell with cap rates 2%-4%. These are stable assets not value add. And they usually get scooped up quickly. What's the point of buying property like that? Couldn't you get better returns much more passively with basic index funds? Who's buying this stuff and for what reason? [link] [comments] |
| Glut of properties falling out of escrow Posted: 16 Oct 2020 12:35 PM PDT Noticing this more and more now, mainly in the Los Angeles area. Once a house falls out of escrow, Zillow organizes them by the original listing date and subsequently they don't get as much attention as a new listing would. Mostly reasons cited include buyer couldn't perform. I know that pre-approval letters have digressed into just pre-qualification letters with less back-end research by the mortgage companies. Plus many new, younger buyers on the market with FHA loans. Are lending requirements tightening up? Any other ideas why so many properties are falling out of escrow? Loss of income? I see the unemployment numbers have been higher than expected. Perhaps we are reaching the top of this RE cycle. [link] [comments] |
| Is Zillow not allowing new users to use their API for GetSearchResults? Posted: 16 Oct 2020 08:33 AM PDT Hey Guys, I'm getting into doing some simple analysis and have been trying to figure out how to use Zillow API. When I signed up through my account, it did not give me an option to use GetSearchResults API. It appears they are only making the following 3 API's available but their reference still mentions the use of GetSearchResults which is what I need. Directory API Mortgage API Reviews API [link] [comments] |
| I want to start my own construction company Posted: 16 Oct 2020 07:20 PM PDT So I have been working on remodeling houses for this guy for a few months. Before this, I have had no prior experience in construction. I recently got my real estate license and am also trying to do that. But my goal is to start my own little company. I feel the most logical place to start is in fixing up houses and reselling. I have some questions though. 1) how do you profit? If you buy a $70,000 house, put in $10,000, now the house is worth $80,000, but you also spent $80,000. So where does the profit come from? 2) can I get a business loan as well as a home loan to buy a house? 3) what are my loan options or how can I find that out? 4) should I buy a house or a duplex to start? If you have any other tips, or experience, it would be greatly appreciated! [link] [comments] |
| Advanced Real Estate Books Recommendations Posted: 16 Oct 2020 11:56 PM PDT It seems that real estate books go over the same guidelines: buy a property for a discounted price with a mortgage, choose an area with good appreciation, do the calculations and only invest in CoC return of 10%+. The steps between these guidelines (how to find deals/ how to know their value/ how to invest in locations appreciation locations/ making account of repair costs and vacancy for more accurate analysis) I'm looking into using private capital, I read a BiggerPocket book about that but it was simply bad. Something like that or any thing advanced would be great help. [link] [comments] |
| Anyone invest focused solely on appreciation? Posted: 16 Oct 2020 10:36 PM PDT Most people invest based on cash flow. There are some instances where investing focused on appreciation is way more money than collecting cashflow if timing and buying/selling is done right. I've seen properties double in value in a couple years. That's also just a normal deal. There's also way more crazy appreciation deals out there that double/triple quickly. What's your vision, numbers, strategy, just a rundown or what you look for, how successful you think, do you believe appreciation is better than cashflow, some example of the numbers involved, profits, and examples of deals. And do you believe this is a legit strategy (not saying it has to be the best), but is it a legit strategy to invest based on appreciation. Also, feel free to include some examples that you know of or have had experience with so that others can know what's possible out there. [link] [comments] |
| Contractor Refuses to Provide W-9 Posted: 16 Oct 2020 10:08 PM PDT I own a few rental properties that I took over from my dad. I officially took over at the end of last year, but it was kinda a sudden and unexpected thing after my dad got really sick so I'm still learning some things. I do have a CPA and he is wonderful but I just wanted some feedback about on a situation I'm dealing with. I found out about halfway through the year that I am suppose to be collecting W-9s for any contractors we use for repairs. For the most part everyone I have asked for a W-9 is happy to fill one out and return it. The only two contractors that have a problem with it are the ones we have paid out the most to. A roofer who we paid around 25k and an exterior painter who we paid about 16k. At this point one of them won't return my calls and the other says he will give me the W-9 but he will never do work for me again. They are claiming that they didn't know I was a business and would have never worked for me if they had known because they don't work for businesses. I've never heard of someone refusing to do work for a business before, is this a real thing? Also I paid them with a business check each time so really they would have known that I was a business. They are also claiming that if my accountant files the 1099 for the full amount I paid them it will cause them to pay extra taxes and that they will only allow me to file the 1099 for their labor and not for the materials or employee labor (so what they netted from the job). I know this is 100% wrong but they say that is what their accountant has told them. No accountant would ever say this right? They refuse to listen to me at all - I'm a female in my 20s and they are in their 50s so I think that's part of the problem. The two contractors are related so that is why I'm having the exact same issue with both of them. I know that I am legally obligated to file the 1099s for the full amount paid whether they "allow" me to or not. And that I just need to make a reasonable effort to obtain their TIN. The reason I'm so bothered by the situation is that the roofer is an amazing contractor (I can live without the painter). He is by far the best roofer in our area and he's just a really honest and great contractor in general. I have a hard time believing that he is upset because he didn't intend to pay taxes on work he did for me for a few reasons: 1. He is the most expensive roofer in our area (so its not like cheap under the table work) 2. He has several contract employees himself 3. I paid him with checks and it was a large amount so I would think that's pretty hard to hide 4. Just a side note but he is a legal citizen I think he is just honestly confused and it doesn't sound like he is getting the best tax advice. I would hate for him to refuse to give me his TIN and then get fined. It's a small town and I hate for someone I respect to have ill feelings towards me and my business. Do you guys have any advice or opinions to weight in? Obviously, I learned that I have to ask for W-9s upfront before any work begins. Thanks! [link] [comments] |
| [HOUSTON, TX] Tenant want to move out 6 months into lease but agrees to pay rent. Is this ok? Posted: 16 Oct 2020 03:12 PM PDT Houston,TX. Tenant moved into my rental condo end of March 2020 for a lease expiring March 31st 2021. Tenant has 800+ credit score if that matters. He and his wife are moving out end of this month (October 2020) to a larger house because they "want more space". I let them know that that is not a valid reason to move out and I will not agree to early termination of the lease. I understand the laws about mitigating their losses so I will do that, but they are still on the hook for rent until either of us find a replacement tenant that I accept. They agreed to continue paying rent. My question is, do you guys have an issue with a non-occupying tenant? Is it legal for them to not occupy? I don't see anywhere in the TAR form (TXR-2001) a provision that requires them to live in the unit. Can I evict them based on abandonment? Should I even care? Thanks. [link] [comments] |
| Need guidance in commercial property investing Posted: 16 Oct 2020 02:26 PM PDT Hi so im a sole prop in my restaurant business. Im interested in this commercial property that is 1,600,000$ What is the most efficient way to approach this. What type of loan is best to get. How much do i need as a downpayment. Should i start an llc and obtain business credit? Would business credit be better or personal credit. Any successful investor please help guide me. If the process takes time no worries i will take some time build to acquire the next opportunity. I just need some guidance with this. Any helpful advice would be awesome!! **or if there was a different way to approach this please let me know" [link] [comments] |
| Ballparking major upgrades to 3 family built in 1910 Posted: 16 Oct 2020 10:29 AM PDT I'm looking at buying the 3 family house that I've been renting at for the last 17yrs. Problem is that while all three units are currently livable and have recently passed city inspections, the infrastructure (heat/electric) needs replacement/upgrading. I'm trying to get a general idea how much those kinds of things will cost so I can avoid deeply negative cash flow in the first few years. I'm in Connecticut.
*upgrade electrical service (amperage). Can anyone who may have done these types of upgrades/repairs before give me an idea of the cost & how disruptive they would be for residents? Thanks. [link] [comments] |
| Correlation between household income and property value? Posted: 16 Oct 2020 10:47 AM PDT Is there a correlation between household income and property value? For example, if a neighborhood has historically had household income and property value trend in parallel, but recently the property value has become stagnant while the household income has continued to grow, can you assume that property value would catch up and reach parity with the increase in household income? [link] [comments] |
| What are the steps to purchasing an piece of property? Posted: 16 Oct 2020 04:37 PM PDT I'm completely new to real estate, but I am looking into purchasing an investment property. I am looking in Providence RI because there are many 6+ room homes for sale under 300k. What are the next steps? Do I get loan quotes from banks? I'm not sure where to begin. [link] [comments] |
| How soon after getting in contract do you usually have to put full amount in escrow? Posted: 16 Oct 2020 07:39 AM PDT Was just thinking, if there is daily wire limit, to maybe do it over say 8 days. This would be cash deal [link] [comments] |
| Property owner requested I send contract in the mail? Posted: 16 Oct 2020 11:18 AM PDT Maybe a dumb question, but how would this work? This is for a piece of land that will be part of a wholesale cash deal, pretty straight forward. The issue is when I offered to email the contract for electronic signature, they mentioned they didn't have internet (its an older lady), and to mail the contract to their address. The owner lives in a different state than the property, so meeting in person isn't really an option either. So if I mail a physical copy, what would they do afterwords? Could I use my title company or notary service somehow? Thank you! [link] [comments] |
| First Time Investor - Need Insight Posted: 16 Oct 2020 05:50 AM PDT I finally found a property I like. They are asking $200K. I can put 20% down and rent out both units for $2100 total(current tenants paying this much). My net cash flow would be around $1100/month. The condition is alright, but it's not turn key. I can already see a couple grand in repairs. The thing is this property is in a rough neighborhood. The downtown area is just a few minutes away and has been on fire in terms of housing prices. Long term I can see this area appreciating but not for a while. How do my numbers look? And what are your thoughts on long term appreciation in Class C neighborhoods? Thank you [link] [comments] |
| Posted: 16 Oct 2020 10:44 AM PDT There is this condo I want going for 120k. Zillow estimate was 115k but the place has a lot of things that needs cleaning/replacing and has been on the market for maybe 3months so I was thinking maybe 110k. Is this a low ball? Am I being reasonable? If anything the owner can just counter my offer right? Or would he be offended by my offer and decide not to deal with me? This is my first time purchasing a home so any advice and pointers are welcome [link] [comments] |
| Posted: 16 Oct 2020 02:16 PM PDT I've been researching this accounting for the following factors:
And found the following cities pretty attractive in no particular order:
Would love to hear your list and why you picked the respective cities [link] [comments] |
| Deduct closing costs as expenses? Posted: 16 Oct 2020 10:28 AM PDT For costs associated with buying a rental property, which fees/charges can be deducted as an expense in the current year vs being counted as the purchase price basis which must be depreciated over 30 years? Can I offer a lower purchase price and then offer to pay all other fees (title policy, survey, home warranty) as a way to lower the property basis but increase my "losses" in the current year? I know many of these costs can't be deducted for a SFH primary residence purchase, but does any of that change for a rental property? How would you structure a purchase to maximize your losses in the present year? Or does it not make a difference? [link] [comments] |
| I can’t afford PropStream what else do I use to skip trace Posted: 16 Oct 2020 09:29 AM PDT |
| Posted: 16 Oct 2020 10:37 AM PDT I want to build wealth via real estate by renting out duplexes or normal houses. I'm a complete beginner and I want the right education to get started. I don't have money to buy yet but I'd loved to be informed once I have the money. Does anyone know any good audiobooks I can listen to while I'm not doing anything during my day job? Thanks! [link] [comments] |
| Connecting with RE Private Lenders Posted: 16 Oct 2020 09:50 AM PDT I'm looking to connect with private lenders (not 'private lenders' that are actually hard money lenders) to scale my portfolio. I'm at 16 SFR properties and am looking to identify $300k-$400k more of Private money to scale there. Money would be low risk (asset-secured), moderate/high return, and high liquidity (aiming for liquidity upon refi within 3-5 months). Can anyone refer me to someone who might be helpful to talk with? [link] [comments] |
| Posted: 16 Oct 2020 07:48 AM PDT Hi Guys, I've been reading all of your posts and really enjoy the community, topics and education. I am evaluating deals in North NJ, this will be first property purchased and would like some clarification. I do intend to speak with my CPA to run analysis and get estimates of schedule e and tax liabilities of a model property investment. Assumptions: $450,000 2 family, 2br, 1 ba, each unit, total 4 br, 2 ba property. Taxes: 10,000/yr Interest rate: 3% Insurance: $1,500/yr Hypo estimate PITI: $3,600/month Median 2 Bedroom rents in North NJ area are about $1,800/month. Plan would be to rent for $1,800 to tenant and live in other unit for a period of time with intention of long term hold. $43,200 per year in PITI, plus 10% maintenance, 10% vacancy. Gross Rental income would be $1,800 x 12 = $21,600/yr at 100% occupancy for 12 months. Depreciation on $200,000 building over 27.5 years of 7,200/yr. Property Taxes are approximately $833/month. How is your rental income usually taxed? Is it treated as ordinary income and so you pay your tax bracket (blended brackets)? How can I estimate what my net costs would be on a month to month basis? Also, When I move out and rent the unit I was occupying, if I can only rent both units for $1,800 each, $3,600/month which equals PITI, I would effectively be at a loss unless there are larger reductions I can tax on income associated with interest, taxes and depreciation. Would you mind sharing some examples or break this down for me? So hypothetically: Rental income is $1,800/month or $21,600/yr. 50% of insurance = $600 50% of property taxes = $5,000 50% of depreciation = $3,500 Total deductions = $9,100 Total taxable income = $12,500 Tax bracket applied to this number (35%) $4,375 taxes owed So my costs would be $21,600 (50% of PITI) plus $4,375 = $25,975 or $2,164/month which is about $400/month more than a rental. Assuming I moved out and rental my unit. How would you price the rents on both units to cover the PITI and taxes to ensure you profit? Thank you so much! [link] [comments] |
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