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    Real Estate Investing: Buying my first house

    February 18, 2021

    Real Estate Investing: Buying my first house

    Buying my first house

    Posted: 17 Feb 2021 10:33 AM PST

    Hey guys, I've finally saved up $20k. I know it's small money compared to a lot of you but I'm wondering if that's enough to get started in real estate.

    I heard there's a method where you buy your first home with the 3.5% down deal, you live in it for a year and then rent it out afterwards?

    Also, I've heard mixed things about showing proof of work to your lender. I'm in my first year of tattooing so I don't have that to show. I could have someone else sign for me though right?

    I'd love any advice. Thank you!

    submitted by /u/ErickTat2
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    Did the SF housing market crash?

    Posted: 17 Feb 2021 08:03 PM PST

    Hello fellow investors. I'm not big on posting, through months of lurking around, I do know we have a few bay area people here.

    I've never been a fan of the SF/Peninsula area, so I wasn't following it closely, up until now. I very firmly believe, that you can witness the crash right now, as it's happening.

    What do I mean by that?

    • There are so many rentals available in SF on zillow, without carefuly filtering, you can't even see the district's name on the map. I have not seen anything like this before [link]. Same for houses for sale, but I haven't looked at that before [link].
    • There are plenty of houses 2/1 at least, under 3k and even under $2.5k, which haven't been a case, since I arrived in 2012.
    • there are houses for sale for less than they have been acquired years ago even though they are remodeled nicely [link] and in NYC, it would worth millions and millions... There are houses available in decent condition for UNDER A MILLION!
    • At the same time, Sacramento rentals are nearly on par with SF [link]
    • But that's not even the surprising piece, even FRESNO is somewhat relatable [link] and (no offense), once I heard someone saying "Fresno is the a-hole of California". Which I very much disagree with.. that person obviously haven't been to Barstow (just kidding).
    • It's not even that the Bay Area or even the Peninsula is going down, if you look at Danville (Bay suburb), houses are only listed for a few days and there is virtually no inventory [link] or look [this] or [this] house in Mountain View (google hq), selling for unrealistic amounts.

    In conclusion, I belive SF/Oakland REI market is crashing right now, extremely hard and I don't even know where it will stop. That's been said, with some ~50% of the small businesses closed permanently [link], tax payers moving out like crazy and property taxes not increasing added up with the homeless and absurd crime rates (police wont even show up for a car broken into), I think they are in really big trouble over there...

    Want to hear what you think.

    submitted by /u/Jealous-Squash
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    Anatomy of Handling a Crisis (Tales from the Trailer Park)

    Posted: 17 Feb 2021 04:36 PM PST

    I know a lot of you are handling a disaster in Texas, or have other emergency crisis that spring up, we had our own this very morning. I wanted to lay out our timeline and the steps that we took per our operating manual on how to deal with these things. You need to know how to handle crisis and have a plan before they happen. If you don't you need to create one shortly after a crisis has happened. We are not local to this property, so this applies to all of you OOS and people with Property Managers too.

    • 7:23am Phone Call:

    Hi, [ u/LordAshon's Onsite Manager] this is (some guy) with the city of (where the park is) Water Department. You guys have a break on your private line that comes in off of the highway. If you could give me a call to see if you can't get this fixed, we will assist you in the shutdown of the the line. Please give me a call back

    • 7:23am PANIC ENSUES
    • 7:23am - Calls Onsite Manager, go get eyes on this and take a picture/video and text it back to me.
    • 7:24am PANIC ENSUES
    • 7:25am Checks bank account, credit card accounts, verifying cash on hand for emergency handling
    • 7:26am Call back from Onsite Manager - Burst pipe is not on the property, and may be under a building next door.
    • 7:27am Confusion, frustration, and Dollar Signs INTENSIFY
      • Thoughts going through my head:
        • How do I own 1000' for a water main past my water meter to the city line?
        • How is there no recorded easement for my utility line?
        • It's all either under the parking lot or the building of the fast food joints next door?
    • 7:28am Shuffle through paperwork in a hope that somehow over the year I missed some closing paper work that showed where the water main was.
    • 7:29am Call into Insurance Broker (it's early, so I go to voice mail) We might have a water main break between the meter and the city under other peoples development are we covered if the need arises?
    • 7:29am Onsite manager calls park plumbers to see if they can do work, the answer is No, you need city approved companies.

    [Shoot lost half the post]

    • 7:30am contact city approved vendors, check availability for emergency service.
    • 7:30-8am Research city ordinance, water line maps, and easements, finding nothing of value to help me get through this.
    • 8:15am City guy calls back:

    Don't roll any contractors yet, we suspect the leak is in this building and are awaiting the building owner to give us access before we can determine more.

    • 8:17am No Residents have alerted us to loss of water.
    • 8:20am Email to Attorney for referrals to City Zoning, Easement, And right of way attorney for local area.
    • 8:20-9am Anxiety continues to climb as worst case scenarios creep into my head.
      • Whats the cost to rip up the neighbors parking lot?
      • Can I just do a balloon to seal the main? Do they even make those balloons long enough?
      • What if this is in the Fast Food Chains basement?
    • 9:15am Anxiety finally breaks and I get on the official r/realestateinvesting Discord and start ranting.
    • 9:18am realize that the city person is talking about a building 200' north of where my lateral should be running
    • Learn a little bit about assumed easements
    • 9:30am Confirmation that it is not my Lateral that has broken. Crisis Averted.

    While things worked out this time, I've spent the rest of the day working on updating and planning for the future. We already have full utility upgrades planned for this summer coming in at an estimated 250k, adding another 20-50k for an emergency would have made me rethink my plans. It already has me rethinking my plans, like connecting to the water at an area where I can control it.

    How this fit into our Disaster Planning:

    ​

    Park Manager
    Alerts ownership to potential crisis
    Documents Crisis and texts/emails video/pictures
    Understands the "NO MEDIA ON PRIVATE PROPERTY POLICY"
    Understands the "Only thing I can say to Media is, your are trespassing and here is the phone number to the parks legal representation"
    Has a list of approved vendors to call in an emergency
    Maintains Email, Texts and can post on FB page to inform residents of any Crisis.
    Empowered to engage with city officials in emergencies.
    Ownership
    Confirms Crisis
    Immediately informs insurance broker/attorney in an emergency for guidance
    Maintains sufficient funds for emergency repairs
    Knows city ordinances and laws (FAILED HERE)
    What we could have done better
    Already knew where the water main was and had it identified
    Understood that we own the water main off of the property
    Had emergency contact of City Approved Main Line Plumbers

    ​

    The point is, if you don't plan for crisis you become part of the problem instead of the solution. Being active and pre-emptive in your approach to ownership, and treating this like a business with plans, backup plans, and contingencies is the only way to get to scale, maintain scale, and not have a mental break down when a crisis occurs.

    submitted by /u/LordAshon
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    Building a duplex with an FHA construction loan?

    Posted: 17 Feb 2021 08:31 PM PST

    Anyone know if this is possible? I have read for hours and can't seem to find an answer.

    submitted by /u/scottatu
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    Sell or keep renting. Am I missing something?

    Posted: 17 Feb 2021 05:11 PM PST

    Background: Only been renting my house for a little over a year now to the same tenant who is now offering to buy the house and forego realtors/pay all closing cost.

    Numbers: I think I could get $340k-350k for it. Bought it in 2016 for $312k. Owe $255k on it at a 3.75% interest rate. Monthly payment is $1600 on a 30 year loan. I'm currently renting it for $2200 but after paying the property management company I get $2025. HOA cost me $100/month. So essentially my monthly profit is $325.

    Selling seems like the obvious answer to me but am I missing something? I'd avoid capital gains tax AND realtor fees. I don't necessarily need the money right now but would invest the profit. All advice is greatly appreciated!

    submitted by /u/JohnnyJlo128
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    Is there any reason to add solar panels to a roof of a rental property when renter pays utilities?

    Posted: 17 Feb 2021 08:42 AM PST

    After having a number of solar installers contact me and deciding against installing one, would there be a benefit to having it? In Florida I'm always nervous about installing anything exterior of the home due to hurricanes and wonder if the benefit of these panels would even outweigh their costs. At the rate of solar advancement is it likely a much more efficient panel will be out in 5 years?

    submitted by /u/Aggressive-Race8206
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    Living in a 1031 exchanged multi-family

    Posted: 17 Feb 2021 10:12 PM PST

    Hello! My wife and I are first time exchanging some farm land owned by my LLC into a multi family unit. The trade will be like for like and the LLC will own the new property. Let's say the LLC buys a 4-plex and rents out 3 units to people. 1. Can the LLC then rent the fourth unit to me and/or my wife as individuals? 2. Do we need to wait 1-2 years before we can do this? 3. what if this is not our primary residence, does that make a difference? 4. What if we move in to renovate, can we then stay as tenants?

    submitted by /u/Guru_in_flannel
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    Home selling advice

    Posted: 17 Feb 2021 10:43 PM PST

    I have property in the Boston area that needs a complete rehab. It was built in 1955. It's a split level ranch, 3 bedrooms 1.5 baths. 10,000 ft land. 'Handyman joe' my dad owned it for the last 60 years. Many incomplete/ incorrectly done modifications, updates. Many good things too. Dad wasn't a dummy, just took on way too much and wasn't always a good finisher. Landscaping is in a similar state. Partially finished basement, last worked on, 1980. Both bathrooms and kitchen need to be done. Needs a roof(1987) siding(1980). Lots of concrete that probably should be removed. 20x 50 ft poorly done concrete driveway.

    In the area homes go for around 500k It is currently completely empty. What is the best way to sell a property like this?

    Market is hot? Boston is always crazy for real estate. It's been estimated 100k of work is needed. It definitely won't pass for an FHA loan. Just on the roof.

    Time is not that important. Selling it sooner is always better. But max price is most important. Seems like it is a good thing for a flipper?

    Should I try to sell it myself?

    Should I use an agent?

    submitted by /u/International_Box_60
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    Considering buying an investment property to rent to my parents

    Posted: 17 Feb 2021 09:25 AM PST

    I live in one of the most expensive areas of the US and have no intention of purchasing in this market. I've considered purchasing an investment property elsewhere though and realized I have a great opportunity to have reliable renters, as my parents are looking to sell their home and move closer to me. They are retired in their late 60s and by their own reporting would have to make into the mid 90s before running out of money was a concern.

    I look at this as an advantage because beyond the usual benefits of tax deductions and hopefully price appreciation of the property, it also gives me a head start on transferring wealth from them to me when they pass away. Without getting into it too many details, I have a sibling who has no problem with criminality. If they are not completely disinherited or jailed before then, I'd like to minimize the assets I split with them in the event that my parents pass away with any money still.

    All of this seems like a solid plan to me, but I've never owned property before. I've learned a lot from this subreddit and would like to know if anyone sees any nascent problems lingering here.

    submitted by /u/SidePullSandwich
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    3D printed house!?! wow

    Posted: 17 Feb 2021 11:43 AM PST

    Getting a Personal Loan After Getting a Mortgage Pre-Approval

    Posted: 17 Feb 2021 08:08 PM PST

    I just got pre-approval for a mortgage for a specified amount. If I apply for a personal loan today, will it affect in any way the mortgage pre-approval? Is there any way for the mortgage lender to find out about my personal loan? Note that the mortgage lender already did a hard credit pull before applying for a personal loan.

    submitted by /u/rapp17
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    Using land to produce energy

    Posted: 17 Feb 2021 07:03 AM PST

    Has anyone ever bought land and used it to generate energy and profited off of it? Like buying a parcel and putting a wind turbine on it and selling the units of energy generated (for example)? I know the chances of me having oil underneath are slim to none, so I was wondering if any other ways were possible.

    submitted by /u/backwoodbachelor
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    What should I know about Allapattah (Miami, FL)?

    Posted: 17 Feb 2021 06:44 PM PST

    Thinking of an investment duplex in Allapattah (Miami, FL)- specifically north east side of the neighborhood. Working with a local expert friend but wanted to hear investor & local audiences opinion about the neighborhood as investment - demographics, rental market, is it developing if so how, general knowledge about life there.

    Many thanks

    submitted by /u/m1ndb0mb
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    New Development Appraisal for Perm Debt

    Posted: 17 Feb 2021 10:45 AM PST

    Hi everyone,

    I am taking a serious look at building a 4Plex. I think I can get it built for $180/sf and it will be valued at $205/sf once it stabilizes. I was talking with a lender who said that they will use the lesser of the construction cost and market value for underwriting the perm debt. Obviously I want to immediately tap into the value I made. I think the way to do this is to get a construction loan with a mini perm. Then once the 6 months, or whatever significant amount of time passes since I stabilize the property is up, I would go find a lender who would value it based on the market value at that time.

    Does anyone know more about this process and be willing to share?

    submitted by /u/SnooRecipes845
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    Realtors license

    Posted: 17 Feb 2021 05:53 PM PST

    I'm looking to get into house hacking multifamilies to get started within the next year or so. Would it be worth it to get my realtor license? Sounds like I might be able to find better deals with it, represent myself during purchases, etc., but at the same time I have no interest in it outside of doing my own investing. Any help is appreciated!

    submitted by /u/Lordquas187
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    First time home buyer. How much house can I actually afford appropriately

    Posted: 17 Feb 2021 01:21 PM PST

    So I'm a first time home buyer and I'm trying to understand how much Home I can appropriately afford. Not with a lender or a real estate agent wants me to spend. Any tips or advice on how to appropriately calculate what I should be spending. I'm in the personal debate of buying a 700 house and doing some work to it. See may be 200 grand. Or do I just buy the $1 million turn key.

    submitted by /u/Yukon_Cornelius1911
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    Wholesaling LLC Question

    Posted: 17 Feb 2021 05:00 PM PST

    So I started an LLC back in 2019. It's a single member LLC (I'm the owner operator) with the hopes of selling a mortgage offset product online. Therefore, I put "Online Store" as box 10 in my SS-4 application. I have an EIN, a mascot, a logo, and a name I think is really clever so I would like to keep it. However, now I'm going to be focusing the business on Real Estate Wholesaling (I also own a duplex so I'm not a total newbie in the REI space).

    How do I change the business type? Or does it matter? I'm considering talking to a CPA/Attorney about this, but I thought I would touch base with the sub to see if you had any suggestions. Thanks for your help, I really appreciate it!

    submitted by /u/Drawn2NewThings
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    Commercial property 1031 added investor?

    Posted: 17 Feb 2021 10:48 AM PST

    Can I add on additional investor to 1031 exchange ?

    So, my family (excluding me) has a property they are considering doing 1031 exchange.

    As they are buying a new property can I invest to be partial owner of the new property

    So, 3 of my family owns a 900k property (1/3 each)

    Can I invest additional 300k to do 1031 exchange and become 1/4 owner of the 1.2mil property?

    (Not real number but for simplicity of the math. )

    I googled it but couldnt find an answer. Thank you guys.

    submitted by /u/mufasa_j
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    question regarding what to invest in first???

    Posted: 17 Feb 2021 04:13 PM PST

    I understand this might differ due to location, market, price and all that good stuff. But i was wondering, for the people that do have experience in investing in real estate, what do you think is a good start off point for a first time investor. should i look into getting a duplex or a house? Maybe a 4 plex? lmk what you think. Im trying to think long term and see what the best option would be as a start off point to think of and research before i "jump" so to say.

    submitted by /u/rebcat56
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    NYC Investing - 1BR or 2BRs?

    Posted: 17 Feb 2021 11:51 AM PST

    Any thoughts on which is more worth the investment in the NYC area? Looking in Astoria/LIC right over the river from Manhattan. Doesn't seem like the additional hundreds you get a month for a 2BR justifies the immense jump in sales price?

    submitted by /u/JaydenRosy
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    Any EU based Real Estate investors here? I would like to hear some of your stories!

    Posted: 17 Feb 2021 05:43 AM PST

    Hey guys I want to hear some of your stories on how you started your real estate business and how's it going. I'm also planning on starting, but want to get some knowledge about this business first. I don't wanna crash and burn right away. I got a very successful business already and want to have this on the side. Any tips are welcome as well! Thanks

    Also do you think its worth finding someone with experience in this business (like a real estate agent) to help me choosing and finding the best deal? Or is there no need for that and do it on my own?

    submitted by /u/krnekino
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    Housing Market in Vietnam

    Posted: 17 Feb 2021 10:06 AM PST

    Hi everyone, I'm new to real estate investment so I need your opinion. I'm graduating soon and assuming that my salary is around 90k when starting, Minus tax and living expense, I can save around 30k per year. Should I be investing in land in Vietnam or should I put it into my IRA/401k?

    I'm a Vietnamese citizen and will be on H1B visa when working.

    submitted by /u/plz_acceptme
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    Rental property insurance fair rental value coverage

    Posted: 17 Feb 2021 05:43 AM PST

    I just received my insurance renewal and decided to actually look through the details of my policy, which I've previously just trusted my insurance agent to recommend proper coverage.

    I noticed the Fair Rental Value covered is only about 30% of the actual rental value. Is this normal? Do other landlords cover the full rental value, or is less than 100% typical due to the increase in premiums for higher coverage?

    What issues could I run into with too little coverage, assuming I have enough personal cash flow and savings to keep up on rental expenses without receiving the full rent each month?

    submitted by /u/amersalb
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