Real Estate Investing: Don't repeat my rookie mistake with appliances. |
- Don't repeat my rookie mistake with appliances.
- Any available outline in a development proposal?
- An agent just refused to work with me because my price point was too low. What now?
- Operating Agreement for LLC Partnership
- Tenants keep hoarding trash outside. What to do after giving multiple warning?
- Job history effects on mortgage loan acceptance
- Becoming a private lender?
- I have $450,000, do I have enough money to survive off of real estate investment income?
- What kind of pro do I use to replace 8 windows?
- Is Zillow the best app/website?
- I don't know what I'm doing.
- When to collect investor money?
- Does the seller pay the fees for the buyer's agent?
- Idaho, Wyoming, Montana?
- Simplifying administrative tasks
- How passive can real estate be? (Serious)
- Getting into my first property...
- Business Partner?
- Cash-Out Refi vs. Delayed Financing: What is the difference
- Houston Rental Analysis - what am I missing?
- Rent Condo out or sell and invest in new house?
- Canada: Buying a condo under a holding company vs. personal name
- To put money down on mortgage or not?
- Anatomy of a Deal - Successful Fix & Flip in Greater Houston Area in the heat of COVID-19
| Don't repeat my rookie mistake with appliances. Posted: 19 Dec 2020 12:59 PM PST Almost five years in, have 10 doors almost all SFH in LCOL area.. By far my biggest headache has been washer/dryer issues. Initial logic was having laundry included would make my units more appealing and possibly command slightly more rent. NOT worth it. Unless you are going to install brand new stuff, or are hands on and handy I can't recommend it. Whenever I have turnover the first thing I do is remove them. Even stuff that doesn't break down mechanically I've had to pull children's socks or loose change out of the washer water pump etc. Tenants will wear them out. Now I just point and say "There's your laundry hookups" Edit: To say tenants who provide their own machines don't seem to mistreat them and never call me with a laundry issue. If they can move their own furniture in and out, they can move modern machines. [link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||
| Any available outline in a development proposal? Posted: 20 Dec 2020 01:13 AM PST Currently have some land which I want to develop on. To build low income housing and earn rent income from it. I do not want to sell as the land value will rise dramatically in the future (huge projects happening close by and area just started getting urbanised). What outline can I use to keep everything in check on the development plan ? I would have built villas or apartment but there is currently no enough capital for that and I feel like I should still keep the land for its future value. Let me know what you guys think and your suggestions on the outline, Cheers! [link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||
| An agent just refused to work with me because my price point was too low. What now? Posted: 19 Dec 2020 10:33 PM PST New investor here. An agent just flat out refused to work for me because my price point was too low. I was looking for properties I could buy in the 30-60k range, reached out to an agent of an interesting looking property, but we found out the property was no longer available. So I just asked the agent if they could keep on the lookout for me, and he responded by saying that it wasn't worth his time. Like, ouch, my first setback. I thought agents were the best way to find property. If agents won't work for me because my price point is too low, then what am I to do to find deals? [link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||
| Operating Agreement for LLC Partnership Posted: 19 Dec 2020 09:45 AM PST I'm setting up an LLC with my business partner for our first investment home together. We're planning to include a clause that a home cannot be purchased without consent of both parties. We're also planning to include a clause related to exiting the partnership in case one of us wants out - something like the partner can buy you out at the appraised value, otherwise you can force the sale of a home but an extra few % goes to the partner that doesn't want out (we split investments 50/50). What else should we include? Edit: we're already scheduled to meet with an attorney soon, I'd just like to be extra-prepared. Thanks for all the tips! [link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||
| Tenants keep hoarding trash outside. What to do after giving multiple warning? Posted: 19 Dec 2020 11:24 AM PST Long story short, I recently bought a triplex. I live in the first unit. Dozens of trash bags are pilling up on the property. I ask the tenants to take their trash out to the trash bin which is on the property and they don't do it??? The tenants are not that great. They don't pay on time and always make excuses to why they aren't paying on time and the most frequent one is "I'm out of town". Do I just pick up the trash?? I feel like this isn't problem. Just take out your own trash. [link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||
| Job history effects on mortgage loan acceptance Posted: 19 Dec 2020 11:02 PM PST I really want to start investing in real estate and buying a home soon. However, I am afraid that my job history might affect my chances of getting a good mortgage or a mortgage at all even though I have above 750 credit score and almost no debt and will have a 5% down payment for a FHA. I have worked for multiple years. Probably for about three years. But they have been part-time jobs I've done in college and barely made me any money. Will lenders think this is OK even though the income is incredibly small? Because if the two-year job history is just to show consistency and stability then I guess I show that because I've worked for years now. I am currently working a job that's going to pay me about $15,000 a year due to only being part time. I am looking into doing a job that is going to pay about $50,000 a year in the next couple months. When I start this new job, does this mean I have to restart the entire process of a two-year job history? Is there any chance I could maybe get a decent loan within maybe a six month period? Thank you [link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 19 Dec 2020 11:12 AM PST I've spent my afternoon researching about private lending. Seems like it can be the best of both worlds of having pretty decent safety while also giving very high returns. Obviously the biggest issue is getting the capital to be able to lend, but if you have it it seems like this is a great move? Seems very feasible to be getting double digit returns with not very much risk because the loan would be secured by the property. Anyone have any insights or expertise with this subject? [link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||
| I have $450,000, do I have enough money to survive off of real estate investment income? Posted: 19 Dec 2020 02:49 PM PST My current situation: I'm 25 years old, I live in the United States, unmarried and childless, I have no job, I have very little credit history and I don't know what my credit score is, I have a four-year accounting degree, and I have about $450,000 in securities. If I were to sell all my securities there would be significant long term capital gains; I don't know what it would wash out to after LTCG tax (it would take a while to find my bases for all my different holdings and what the gains on them would be) but obviously I would end up with significantly less than 450k if I sold it all. I have worked in public accounting, I hate the corporate atmosphere. But even more than that, I hate not being my own master, I hate adhering to someone else's demands and schedule, I hate being a wage slave in general. My desire is to take what I have and create a passive or low-involvement income stream that I can live off of. I do not need to make a lot of money, I would be perfectly happy making $40k/year if it meant I can be my own master. My question is if it's possible, given my current position, to make that happen. Right now what I'm looking at most heavily are mobile home parks. I found one listing for a mobile home park for $450,000 with 11 lots that have been 100% occupied for the last 8 years that claims to net $45,000/year. After selling my securities I would have nearly enough money to buy a MHP such as that one without needing a loan. I'm sure there are better deals to be had with better cap rates. Obviously I would have to own and manage a park such as that one myself because it doesn't generate enough to pay for a manager and still be worth my investment. As for more expensive, bigger parks, I have enough money to make the down payments on these, but would it even be possible to get a loan? An asset secured loan perhaps? Remembering I'm currently unemployed and I have very little credit history. I don't have anything that I think would hurt my credit (never missed rent, never missed bills, pay my credit card off every month, etc) but I've never had a vehicle loan or a mortgage to build credit either. I do have a current job offer for $50,000/year that I'm considering accepting. If getting an asset-secured loan isn't possible or ill-advised, then I'm willing to work a typical salary job until i can get a loan. Perhaps while I'm working there try house hacking a MFH to dip my toes into what real estate investing and management is like. Basically what I'm asking is if my goal is achievable in my current situation. I'd also be curious to hear thoughts about what you would do in my situation, thoughts on owning mobile home parks, thoughts on managing mobile home parks, etc. Thank you, and sorry if I'm being completely naive. [link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||
| What kind of pro do I use to replace 8 windows? Posted: 19 Dec 2020 09:56 PM PST I own a SFH I've lived in for a year and a half. My partner was "in charge" of getting the windows replaced. He asked his dad to do it. It isn't done. Window companies are giving me ridiculous quotes. Is this a job for a contractor? Handyman? Me on the weekend? I need this done so this house can go on the market. $1000 per window seems crazy. Am I wrong? [link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||
| Is Zillow the best app/website? Posted: 19 Dec 2020 08:17 PM PST | |||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 19 Dec 2020 07:46 PM PST I'm trying to start out as a real estate investor. I have 25k saved and want to house hack but I'm running into some hurdles. Most multi-family properties in my area are either not in a good area, are too expensive, or the units are already rented. For multi properties that I do want to live in and house hack. I can't find any that are in my price range (under 300k) and in an okay area. Most of the cheaper properties already have 1 or all the units rented. Now I could buy a duplex that is already occupied but then I wouldn't be able to house hack it ( since they are not in good areas). I did a report on the address 848-850 Salisbury Rd, Columbus, OH, 43204 and the report said I would cash flow $300. both units are already occupied it seems. Could someone see if I ran those numbers correctly and that they are correct ?. overall I'm just frustrated. I can't find a duplex in my price range that I'm willing to live in for house hacking. If I were to buy something cheaper that would damage the possibility of house hacking due to bad areas and already being occupied. I'm thinking of just buying a single-family home and renting it or occupying it. [link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||
| When to collect investor money? Posted: 19 Dec 2020 07:42 PM PST Hey everyone. Posting on here for some advice/insight. Here is my situation: I've done a few flips now with hard money and was considering finding private investors for the next one. I know a few investors that are interested, and we have most of the numbers worked out, but one thing that I am unsure of is the timing of everything. Do people typically ask for the money before or after they find a property? If it is before, then do you just take the risk that it may take a little bit to find a property and eat the interest you pay? If after, then how do you structure it so that you know they will have the money available when you need it? Any insight at all would be really appreciated. Thanks!! [link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||
| Does the seller pay the fees for the buyer's agent? Posted: 19 Dec 2020 06:29 PM PST I also have a few follow on questions from my original one:
Thanks in advance for your answers everyone. [link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 19 Dec 2020 04:54 AM PST Seem like opportunities could be there I just have a hard time believing there is a demand for renters in those areas. Anyone have experience in these general areas? Idaho Falls/Boise or Bozeman MT etc? [link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||
| Simplifying administrative tasks Posted: 19 Dec 2020 05:22 PM PST I close on my first rental property at the end of the month, a 3/2 duplex. I want to simplify admin tasks such as signing leases and receiving payments. Considering setting up leases for docusign, some sort of fillable application thru email and electronic payments. Make things as easy as possible and avoid "check is in the mail" situations. Any thoughts or advice? [link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||
| How passive can real estate be? (Serious) Posted: 19 Dec 2020 04:58 PM PST How passive can real estate be? With a property manager, can I travel to another country for 3 months and still be calm that things do not go bad or do I have to be in my area for most times? [link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||
| Getting into my first property... Posted: 19 Dec 2020 09:28 AM PST Not looking for the leanest, max profitability option here if it's gonna be an uncomfortable place but... I have access to the VA loan, and currently live mobile. Have a steady job as well. Looking for a house or duplex/triplex that I can 1.) partially live out of/be my address or "home" 2.) rent the rest of it out and after a few years rent the whole thing out 3.) fly to easily, meaning a relatively accessible airport ~45 minutes I like the west but am open to options almost any location in the country. Where should I avoid/where should I look hard. Anyone have recommendations, do's, don'ts or any experience in something like this I would appreciate it. Anything at all! Denver, SLC, Philadelphia, Baltimore are currently where I'm looking very lightly. [link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 19 Dec 2020 07:27 AM PST Hello fellow Investors! I've been looking at getting into real estate for a few years now. Basically I'm curious as to what you guys think of having a business partner. I am in the process of buying a home to either flip or rent, honestly haven't decided which route to go. But I had someone approach me about wanting to do this together, this person is extremely serious and quite honestly the only person I have come across that is willing to put forth effort. Which a business partner is something that I think would help the process of gaining assets in general, a lot smoother and less stressful. My main concern is that this person has zero assets (currently), we both would want 50/50 profits and I am fine with that but I don't know how to justify my 100% asset to his 0%. Tips? Ideas? Thoughts? Note** this person is not in as good as a financial position as me and won't be able to fork over as much $ as me, at least in the beginning. This person also essentially wants to buy a condo (at &70,000 under value, family deal) then wants to appraise the condo at $120,000 to get a loan. [link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||
| Cash-Out Refi vs. Delayed Financing: What is the difference Posted: 19 Dec 2020 02:23 PM PST I am writing out my financing strategy as posted below. I am trying to understand the fundamental difference between Cash-Out Refi and Delayed Financing in Multifamily. I cannot seem to wrap my head around this! Below I wrote my financing strategy - Passing along in case there is something off/ unclear. We will be utilizing the BRRRR strategy of Buy Rehab Rent Refinance Repeat to grow the portfolio. There are loan products that fall under the category of "Delayed Financing". These products allow the borrower to first close on the property with cash, renovate the property to add value, and refinance once the property increased in value. Once the property is renovated/stabilized and is "appraisal ready", the refinancing lender will be using an appraisal to determine the After Repair Value and will lend up to 70% of the after repair value (ARV). In layman's terms for our strategy to work, we are looking to buy at a lower loan amount and then refinance within a 2 year period into a lower interest and higher amount loan product. We are looking for a delayed financing loan product that fits this strategy and mainly trying to avoid products that have high fees, a long seasoning period, and prepayment penalties. This strategy allows you to deploy capital and get back the exact same amount (or more) within a 2-year timeline. [link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||
| Houston Rental Analysis - what am I missing? Posted: 19 Dec 2020 01:56 PM PST Just dreaming of a way to start my real estate portfolio and I was casually browsing some centrally located Houston listings. I found a few cheap condos that piqued my interest. One of which is about 650 sq ft for $150k which appears somewhat updated (appliances and cabinets are nothing fancy/older but everything else has somewhat modern, low-mid grade updated finishes). Units in the same complex with better upgrades are listed at $2.33-$2.55/sq ft. The financial break down as follows: Mortgage (P/I & Taxes): $923 Maintenance Fee monthly : $200 Insurance : renters might pay this? Total Monthly Costs : ~$1150 Estimated Rent : $1300 , $2/sq ft Monthly profit before vacancy, maintenance : $150 I was thinking with a small remodel : countertops, cabinets and appliances I could eventually get the rent up to $1600 / $450 month profit. Would love to hear thoughts about this. I know some people consider breaking even on a monthly basis to be okay for appreciation-investors. That's not my primary goal but I would be okay with it worst-case scenario. To me it seems like there's potential upside for a long-term investment but I've got no experience. Thank you. [link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||
| Rent Condo out or sell and invest in new house? Posted: 19 Dec 2020 01:26 PM PST Hi everyone, I'm new here so I hope I'm following all the guidelines. I currently own a condo that is paid off except for the monthly condo fees ($344) & $2200 property taxes. I'm debating on either renting it out (average in the area is $1300-$1500) or sell completely for around 124k to invest into a 3 family, where I would reside on one of the units. I have never gotten a mortgage before but I would need to apply for one to cover the difference on the new investment property. I'm unsure which option makes more sense long term, as to take out a loan to buy new property and potentially make more monthly income or keep the condo and use the rental income from that to further my endeavors at a later time. Sorry I'm just beginning this process and doing my research. Am I looking at this the wrong way? Any advice appreciated! [link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||
| Canada: Buying a condo under a holding company vs. personal name Posted: 19 Dec 2020 01:02 PM PST We are about to have completion on a pre-sale of a condo and as we are about to sign mortgage papers, my mortgage broker tells me that it is best not to proceed with buying this condo under a holding company. Apparently due to the most recent changes in regulations in the real estate industry there is no more benefit to doing this. As per the mortgage broker, most recent buyers ended up getting the mortgages under personal names (unless there was an absolute reason to buy under holding corporation). We already have a primary residence so this was supposed to be a rental property with no plans to sell it anytime soon. The idea was that eventually when the property does sell, the capital gains would be taxed at the lower corporate rate (~13%). I have tried to research what exactly these new rules are but no luck so far. My accountant and notary are closed for the weekend but I'm also hoping to see if anyone here heard of any recent changes? Any industry recommendations/ suggestions how to proceed? Thank you! [link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||
| To put money down on mortgage or not? Posted: 19 Dec 2020 01:02 PM PST New to the space but considering buying a home and I've heard of people saying it's a better investment to put $0 down on a mortgage (or as little as possible) and assuming invest that money elsewhere is the strategy. Just wondering if anyone has resources for working the numbers to see how that works or any information in general on this approach. Thanks! [link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||
| Anatomy of a Deal - Successful Fix & Flip in Greater Houston Area in the heat of COVID-19 Posted: 19 Dec 2020 11:46 AM PST Obligatory TLDR at the bottom for those who want to skip to the punchline. Hey all, been lurking on here for a while and wanted to share my most recent experience. I want to share my story because it was my first ever flip, but it was never intended to be a flip. Due to crazy market factors, grit, and keeping our eye on the prize, my partner and I were able to successfully double our money through a global pandemic in 9-months, all of it stress ridden. I wanted to share my experience with ya'll, because I know many people, including myself, have a lot of fear when investing in real estate, which include, but are not limited to, property vacancy, eviction, global pandemics, a poor performing property manager, not earning market rents, etc. etc. etc. Hopefully our story will help you get motivated for 2021 and you too can close a successful deal and hopefully double your money also. It started in Jan-2020. My partner and I had been exchanging investment ideas for about 2-years before we finally were able to successfully find a deal that had great numbers and had the ability to close on it using hard-money and then refinancing into a conventional mortgage, with the intent to lease it out long-term. The total cash-out for each of us was $11,000, including all financing charges, appraisal, inspection, GC fees, etc. The subject property was purchased from a wholesaler. I know that some people have bad experiences with wholesalers, some had great. We fortunately had a good one and found that it was a better use of our time to leverage wholesalers because I have a full-time job and my partner has not seen consistent success with direct-mailers. The property itself was acquired for $167K. It was listed at $175 originally, and we negotiated it down to $167K. The state of the property was compete disarray. It was a SFH, that was converted into a 3-unit rental. The reason why we purchased this deal was because the property itself had a detached garage with a really nice garage apartment up top, a decent primary dwelling, but the converted master bedroom was atrocious. It was full of garbage, a disgusting hot tub where a bed should be, a closet converted to a disgusting kitchenette, with nasty dishes in the sink, etc etc, my kind of deal. The thought was to fix the property up, lease the main house to one renter, the converted master bedroom to another renter and the garage apartment to a third, and basically own a cash flow king for very little money. The projected gross rent was $2,400. Below is a table that shows the main points of the deal. Projected
So we thought we were sitting pretty, we were going to cash flow almost $1,000 a month between the two of us and we were pretty pleased with all the numbers, the deal terms and method of execution. During this process, we learned that if we close on a residential dwelling with hard money, it must close as a residential dwelling on the re-finance and the master bedroom had to be converted back to a true SFH. So almost immediately we had to pivot our strategy and change our numbers from $2,400 to $2,100. It was a bruise, but could be absorbed and still have decent cash flow. In addition to this, the market and the world had other ideas. Literally 1-month after successfully rehabbing our property and having it move-in ready, COVID-19 shutdowns started. Luckily for us, we had the stand-alone garage apartment to offset the mortgage and we were successful in securing a tenant on a lease at $750 per month, but that also didn't last long. The main house was completed and move-in ready, but it stayed idle. Part of it was the COVID-19 factor, the other big part of it was underperformance from the property manager. Unfortunately, we only had one option for property management for this part of Houston. The best thing about real estate, is that you can pivot out of a situation if you are tenacious, have a strong will, identify other opportunities and keeping your eye on the prize. And this is where the lesson is. With the massive drop in interest rates, the inventory of SFHs at our price point were disappearing quickly from the market. This immediately captured my attention and we made the decision to list this property for sale and move on. Many people have saved a decent amount of cash and wanted to take advantage of the low rate environment. Having observed this tangential shift in June of 2020, we quickly pivoted from for lease to for sale. The only other issue we had was being able to successfully sell the home with part of the garage apartment leased out. Initial feedback showed that potential buyers were turned-off by the occupied garage apartment. For those in this sub, this is a prime house-hacking opportunity, most of America doesn't think so.. Not only was the main house idle from Feb-2020 for the entire time we held the property, the garage tenant stopped paying their rent in July. It was also an all-bills paid scenario, so they were also consuming $250 to $350 per month for utilities. We went from offsetting our mortgage with this lease payment to paying everything out of pocket and a tenant that needed to be evicted. In hindsight, this was the best thing that happened because now we were able to evict the tenant, fire the underperforming property manager and list the property free and clear to potential buyers. We then listed the property for sale with a new agent, someone that my partner has been working with for quite some time, re-marketed everything and started attracting multiple potential buyers. Finally, on November 25th, I was able to take a long-drive to our area, sit in a board room wearing basketball shorts and a tee shirt, and successfully closed a deal that netted my partner and I $21,000 in total gain, after all expenses, hiccups, seller concessions, additional rehab to get the deal across the finish line.
TLDR; My partner and I successfully closed on a attempted BRRR, transitioned into flip, amidst a global pandemic, with multiple things going wrong, which included eviction, an underperforming property manager, excessive costs due to poor management of the property, seller concessions, and essentially 9-months of vacancy. Your first deal is definitely scary, I had multiple sleepless nights, but looking back at it, this was probably one of the best things I've accomplished because of grit, analyzing the hell out of the numbers to ensure there is enough margin there, taking a major risk and literally only investing $11,000 of my own money to make it possible, which was borrowed from my 401K, a meager amount of savings I had in my Marcus account and my W2 paychecks. Hope others find this story inspiring. [link] [comments] |
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