Real Estate Investing: This may be a simple or dumb question, but how does it ever make sense to buy single family rental property? |
- This may be a simple or dumb question, but how does it ever make sense to buy single family rental property?
- Duplex Investing - Renting out one unit and lives in the other vs. Renting out both units and lives in an apartment
- My lender is holding up my process, is it too late to switch?
- Is the DC/DMV area a good place to invest?
- When do you sell?
- Don't Cheat on FHA Mortgage or Lie on HUD Purchases
- 60k construction loan
- What's the best way to build a network and team?
- Rent or Buy? (in Pennsylvania)
- Investing in a property with a buried decommissioned oil tank. Big risk or no big deal?
- Being the money guy in a partnership for beginner?
- Looking for advice on what to do with my apartment building.
- How big of a red flag is this?
- Just starting out (need advice)
- Are you guys hated in your community at all?
- Question about FHA financed "house hacks"
- What would you start if you were just out of high school?
- Would you sell your PDX rental if you were in my situation?
- MLO company requirements?
- MHP investment fund
- Success with leveraging a sweat equity partner?
- "Best" amortization period?
- Looking for partnership advice
- First Time Duplex Purchase What to do for Insurance?
- Best way to find commercial RE investor candidates off market?
| Posted: 23 Mar 2021 07:06 AM PDT Hi. So, I've been thinking of buying another house here in Texas that I can rent out to hopefully generate some income. But I've been doing the numbers on properties I find, and it's always giving me a negative cash flow. I then tried looking at sites like roofstock, and even their numbers agree. For example - https://www.roofstock.com/investment-property-details/san%20antonio-texas/3503-horizon-lk-san-antonio-78222/1839024 With 20% down and charging market rate rent, I'd be losing money for five years and then eventually see a ~$100 annual cash profit in year 5. And this is the best deal I can find on this site. Others have lifetime negative flow starting with ~$1-8K negative annual flow in the first years. (Here's one further away in Austin where I'd be eating over $5K a year for a long while - https://www.roofstock.com/investment-property-details/texas-texas/11020-reliance-creek-dr-austin-78754/1828494) Suddenly, this idea seems like it doesn't make any sense to me. What am I doing wrong or looking at wrong? Is buying a rental property with only 20% down foolish? Seems like I'm better putting that money in stocks. I'd like to own more property but not if it's just going to be a constant drain. [link] [comments] |
| Posted: 23 Mar 2021 09:49 PM PDT Planning on purchasing a duplex as my first real estate property. My goal is to generate cash flow and build equity. I am looking at duplexes around $250K, and hoping to collect $1,250 in monthly rent, per unit. I have enough saved up for 20% down payment. I'm debating between the two different options, since I do not mind the apartment I'm currently living in :
I'm not sure on which one is the best option in the long run. For option 1, would pay a lower down payment of 20% and a cheaper interest rate. Where in option 2, I would have to pay 25% in down payment and slight higher interest rate. Since the duplex would be considered an investment property not primary residency if both units are rented out. However, the second option would allows me to collect $2,500 in rent each month, from the two units. I would only have to pay $950 for the apartment, which would gives me $1,650 of positive cash flow. Where if I move in to the duplex, I could only collect $400 ($1,250-$850) per month. Since I am flexible on where to live, should I go with Option 2 to maximize my profit? This there anything I didn't account for? Any tips and/or advises would be appreciated! [link] [comments] |
| My lender is holding up my process, is it too late to switch? Posted: 23 Mar 2021 09:49 PM PDT Brand new baby investor here. The moon and the stars and planets all aligned perfectly, and somehow, some way, my offer was accepted for a private transaction for the sale of a property before it was publicly listed in the market. Now the only thing getting in the way is my lender. He was recommended to me by investor friends. He has a condescending tone and outright talks down to me, and I don't appreciate it. He repeats himself to me as if I'm too stupid to comprehend him. I have asked him multiple times what documentation I need to submit to finalize the details of the loan, and he gives it to me in installments. For instance, last week it was verification of assets and income. Once I submitted all of that info, I asked him what more I needed to provide to lock into a rate. He didn't respond, and my "to do" list he had generated for me was complete. Since I hadn't heard back, I left him a VM today again asking how to lock into a rate. Now this week, he's asking for details of my current debt (mortgage and escrow account). This lender is the same lender I used for my loan for my current mortgage, so he readily has these details available, but even if he needed them, I'm a little irritated that he didn't notify me sooner that he needed these statements - like maybe last week when I submitted all the documentation he requested. My problem with all of this is that this transaction is time sensitive (per the sellers), and it feels like this loan officer is dragging out this process unnecessarily while being kind of a dick. How deep into this process is too deep to start over with a different lender? [link] [comments] |
| Is the DC/DMV area a good place to invest? Posted: 24 Mar 2021 02:49 AM PDT I'll be moving to Maryland, not far from DC, Baltimore, and Annapolis here in a few months. I'm considering buying my first property. Is it a good area to buy and rent out some realestate? [link] [comments] |
| Posted: 23 Mar 2021 02:03 PM PDT I bought my first rental property in 2019 and knew I got a really good deal. I haven't put much money into it, it's yielded pretty good cash flow, but now the neighborhood is getting stupid hot and I think I can sell for about 45% more than I paid for it and I'm very tempted to sell and roll the money into more properties (understanding that I may have to wait to do that). So, seasoned vets, what signals do you look for to decide when to sell? [link] [comments] |
| Don't Cheat on FHA Mortgage or Lie on HUD Purchases Posted: 23 Mar 2021 08:25 AM PDT It often doesn't rise to national news coverage, but stay on the right side of the law folks, this stuff can get very expensive: [link] [comments] |
| Posted: 23 Mar 2021 05:00 PM PDT Purchased a property out right for 15k. Needs 60k in renovations to do full renovation. Once done, it should appraise about 140k. 720 credit, own my primary home and great DTI ratio. Struggling to get hard money lender as most folks want to do 100k deals or do purchase and Reno. Are there options out there for construction only? [link] [comments] |
| What's the best way to build a network and team? Posted: 24 Mar 2021 12:58 AM PDT I'm new to the real estate investing scene and many resources have told me that I need to build a network and a team. What are some ways to do that? Are there places that I should be checking out for networking? And for a team, it was recommended to find at least a general contractor and a realtor to work with. Any other people I should be looking into? There's a lot of information and I'm kind of stuck not knowing where to turn. Would love to get some perspective and advice! Thanks! [link] [comments] |
| Rent or Buy? (in Pennsylvania) Posted: 23 Mar 2021 07:48 PM PDT With the help of my parents I have 0 loans from school & a credit score of 750+. I am debating whether to take a loan to take advantage of the low interest rates to buy a ~300k house OR rent an apartment (~1k a month) in East PA. I have ~60k saved and will be making ~60k/yr as a resident physician. Assuming I buy a house, I will be renting 1 of the rooms out and living in the other. I am looking to stay in the house for 3-4 years and potentially selling the house or making it a rental property after I leave. In this crazy seller's market is it even worth taking the risk to buy? or would you recommend just renting for 3-4 years and not risking the property devaluing. [link] [comments] |
| Investing in a property with a buried decommissioned oil tank. Big risk or no big deal? Posted: 23 Mar 2021 11:48 PM PDT I'm thinking about buying this very nice house in a very hot market. I'm quite sure the price will continue to appreciate over the next few years. The only issue with this property is that it has a buried 300 gal oil tank that was decommissioned "cleaned and filled with foam" back in 1995. There are receipts and permits that this was done. However, no mention of whether the soil was tested for contamination. Am I look at trouble down the road? Will I have problems insuring this property? I've never come across a buried oil tank before and have no idea what this means. [link] [comments] |
| Being the money guy in a partnership for beginner? Posted: 23 Mar 2021 09:48 PM PDT Just curious if a beginner wanted to pursue being the money guy in return for learning the ropes in multifamily investing, what would be considered "fair"? I would imagine this split would be different when dealing with an experienced money guy who doesn't really need hand holding. Thanks in advance! [link] [comments] |
| Looking for advice on what to do with my apartment building. Posted: 23 Mar 2021 07:05 PM PDT Hello, this is my first post, but I have learned a lot from this sub as a lurker for almost a year. Now I am hoping for some advice. I currently own a Multifamily building consisting of 8 units, 6 1 bedroom apartments and 2 offices. There are 4 residential units on the top floor and two on the bottom behind the commercial units. I cannot rezone the commercial units into residential so I will be turning one into a laundromat and the other is just storage for now as I plan to expand into more properties in the area. The location is a low income/distressed area and I have 3 tenants, all section 8. I purchased the property in 2016 for $65K with a partner, who almost immediately screwed me out of the $60k hard money loan we secured for the rehab. I was able to refinance and am currently losing about $350 a month, but that's better than where I was a year or two ago. I have gone through squatters, bad tenants, and just poor management help. I am not going to say most of it wasn't my fault, I got desperate and did not make sound decisions, new baby on the way and sick wife will do that to you, I guess. I am now at a point where I can start the major remodel of the building. I have just gutted a unit on the second floor above the empty office space and have a couple of options. I was thinking of converting the 4 units on the second floor to 6 studio/efficiency apartments. The apartments would be about 355 square feet each, bathroom, small kitchen, and a closet or two depending on how I lay it out. I could also do 8 smaller units at about 250sq ft each, however, I think this may be too small, I don't know as I have not done the layout on that yet. The only major change to expenses, that I can think of, would be the sewer charge, which is $42/unit/month. I would also have to upgrade the main electric to 600 or 800 amp service, but I had to do that for the laundry anyway, so that cost is accounted for. The cost to gut and remodel each studio would be about $7k each unit. I am sure the taxes will be going up, however, I am in talks for a 10 year abatement and reduction of taxes. The tenants would pay for all their own electricity and double my water bill would be about $120/month. I currently pay for hot water and planned to install hot water heaters in each unit anyway, as well as efficient heaters, possibly A/C, mini splits or ptac. My numbers are as follows: 4 1BR units: AVG Rent – Sewer tax = 800 – 42 = $758 * 4 = $3,032 6 Studio units: 675 – 42 = $633 * 6 = $3,798 Additional rent: $766 * 12 = $9,192 I used the avg rents I am getting now for the 1BR, and avg rates for studio units I found in the area. Some of those were very small efficiencies, but I like to be a little more conservative. The $9k extra per year would pay for all 6 units in about 6 years. That is 16% extra cash flow, based off my $7k initial investment x 6 units is $35k. I would not be doing the upgrades all at once, just one side of the building at a time (center main hall). I must do the upgrades anyway, there are leaks, mold issues, lead paint, and just unusable spaces. I can go one step further and maybe do 8 efficiency units. The cost to remodel would drop to about 5k per unit, or 40k, as I would need 4 main sewer stacks and electrical chases anyway, these units would then all be mirror images of each other, increasing efficiency in the remodel. $550 - $42 = $508 * 8 = $4064 = $12k/ year additional income over 4 1 bedroom units. This means I can pay for 2 a year and the additional income after the fact would help pay the building off faster or go towards new properties. My biggest fear for this, would be in keeping tenants in the building. The apartments would be tiny, and the whole building may just be too crowded or just uncomfortable. I know the area may not support the most rent for all these upgrades, however, I refuse to allow someone to live in one of my places that I wouldn't be able to live in myself. I pay for monthly cleaning crew for all my tenants, and quarterly preemptive extermination. I found that this saves me money in the long run as I can keep the tenants that I want. Some of the other landlords in the area tell me they have better luck with studios as there is less space for their "guests" to come and stay. Anyway, please let me know any thoughts, experiences, or if you need more info. Thank you again. [link] [comments] |
| How big of a red flag is this? Posted: 23 Mar 2021 06:59 PM PDT We found a condo that we liked with the plan to use as a second home for a few years and then use as a rental property. We live out of town so toured the property virtually with an agent today. Everything was going well until I mentioned that the listing had 2 baths and we had only seen one. The listing agent pointed our agent over to a doorway that was covered in 3 mil plastic held up with painters tape. She said the current tenants didn't want it opened. Ok, weird but they're not my tenants so I didn't really care. The agent was able to pull the plastic back enough to stick her phone in and said that there was a very strong smell of cigarette smoke. Other than that it looked like a regular bathroom, the little we could see. Afterward I was reading online that it's almost impossible to get rid of the smell. Thoughts? 😂 [link] [comments] |
| Just starting out (need advice) Posted: 23 Mar 2021 05:12 PM PDT Alright title says all but some details I have about my situation. -I own a house appraised at $280,000 -I owe $134,000 left on my mortgage -I have 14 years left and my rate is 3% What would be the best way to take out money on my current home to use as a down payment on a rental property? HELOC or refinance? Rental properties in my area are roughly $100,000 [link] [comments] |
| Are you guys hated in your community at all? Posted: 23 Mar 2021 12:47 PM PDT I see a lot of people hate landlords, for example the subreddit r/landlordlove or something like that, starting to get into low end real estate, but wondering if it'll genuinely get people to hate me, I'm going forward with it either way, but I just want to see it coming if I should be expecting people to dislike me more, or if it'll be fine [link] [comments] |
| Question about FHA financed "house hacks" Posted: 23 Mar 2021 06:36 AM PDT Hey guys. On mobile and so fourth. Had a question I was looking for some clarity on. I'm currently looking into multi family places that I can use FHA financing for. I came across someone who said that you can include the documented rental income from the property as part of the income statement on your FHA loan. I spoke with my lender and he was slightly firmiliar with this. He said you can use 75 percent of the rental income as additional income for your loan. Has anyone done this and can explain to me more how it works? For example: A four unit 300k property that has documented $2500 worth of rental income monthly. Would my lender then take that and do 1875 x 12 = 22k And just include that as part of my income to increase my barrowing ability? Sorry if this isn't clear. I'm a bit hazy on the concept myself so please bear with me. Any help greatly appreciated! [link] [comments] |
| What would you start if you were just out of high school? Posted: 23 Mar 2021 06:51 PM PDT Where would you start if you wanted to get into real estate investing with less than $10k saved and a decent credit score. What is the best path to take? [link] [comments] |
| Would you sell your PDX rental if you were in my situation? Posted: 23 Mar 2021 01:18 PM PDT Tl;dr: home has appreciated more than I expected and I'm compelled to just take the proceeds and sell it. But I don't want to overreact when I should hodl. Purchased an attached SFH (3/2.5 1500sq ft) as a primary residence in 2016 for $230k in Portland, OR. FHA loan with 3.5% down. We got a downpayment assistance grant and seller paid the closing costs so, almost nothing out of pocket. 4.25% interest rate with a PMI amount of about $120 per month. Monthly payment is about $1550. Current loan balance is about $205k. Edit: we lived in the home for 3 years. About two years ago we moved to Seattle from portland for professional reasons and rented the house to a friend of a friend for $1750 a month (we rent in SEA). The tenants been good, low impact tenants. They have had some trouble with rent for covid employment reasons, but they caught up ahead of the city-mandated timeline. They're about three months into their 3rd year of renting and I feel lucky to have them. They've suggested they may be ready to move on after this year. So its at this point where I'm trying to figure out if I should continue to be a landlord or if I should just sell and move on. I've got a redfin realtor conducting a market analysis for me, but she said she didn't see a scenario where the house would go for less than $350k in today's market. That seems crazy to me, but let's assume for a moment that that is correct. On one hand, it cash flows reasonably well and continues to appreciate in a desirable market. It will likely be difficult for us to buy in PDX should we return to the area (a loose 5 year goal). On the other, before my tenants, I was not getting great candidates for renters, as it's not in the most desirable part of the city. If my tenants leave, the prospect of finding new tenants seems more trouble than it's worth. We didn't buy the property to become landlords. But the biggest motivator for me is the idea of just taking our profits and selling high. Walking away with $100k is better than we ever could have imagined. Having that liquidity would give us a chance to jump on a new opportunity should it arise. But the risk would be losing out on potential additional appreciation. And it's not like I have a subsequent play lined up with the money. Anyone else at a similar crossroads? Have experience in this situation? Anyone seeing factors that I haven't listed here that I should be thinking about? I really don't know if there's a "right" answer here but would appreciate hearing others opinions on this situation. [link] [comments] |
| Posted: 23 Mar 2021 05:39 PM PDT I have several friends who do a lot of volume that told me they would send me their loans if I were to have my license/company set up etc. Besides obtaining my license and setting up a legal entity, is there anything stopping me from setting up my own little MLO company and have the people I know send me their business? [link] [comments] |
| Posted: 23 Mar 2021 09:21 PM PDT Hi guys, new investor here looking into investment funds that purchases and rehab MHPs. Was wondering if anyone here have good/bad experience with similar investments? [link] [comments] |
| Success with leveraging a sweat equity partner? Posted: 23 Mar 2021 09:24 AM PDT Has anyone had any success finding a sweat equity partner? Someone that will work with you to find a deal, put in most of all the labor themselves, and have you handle the majority of the financing? Rehabs look to be the only possibility of cash flowing in my area, and trying to get creative on how to first get into real estate investing. My career would not allow me to devote the time necessary to rehab, but I have some contacts that I know and trust that might be able to do the hard work. It feels like splitting ownership would help keep both parties mutually invested in the success of the rehab, so wondering if anyone has had any success structuring deals like this. I know splitting equity would dilute the returns, but without being able to personally do the rehab I've struggled to find any entries into the market in my area. [link] [comments] |
| Posted: 23 Mar 2021 08:14 PM PDT Trying to decide between 20 and 25 years. Is there a best practice? [link] [comments] |
| Looking for partnership advice Posted: 23 Mar 2021 08:01 PM PDT I'm very new to partnering with someone on a deal and would appreciate some advice. A close friend has approached me about partnering with him on an 8-unit apartment building. I already own some small multifamily and SFH rentals, and he has a lot of experience in multifamily management, contracting, etc. We're planning on him receiving 30% equity for finding the deal because it's a good one. We seem to have very similar personal investment philosophies and goals for the property - value add with a sale (or cash out refi) in 3-4 years. We'll both be contributing capital, but me more so, and I think we'll end up around 50-50 split in ownership. We're aiming to share in the operational work and responsibilities. Would most people structure this as an LLC partnership with an operating agreement? My state allows LLCs, LLP, and LLLPs, General Partnerships. Income would be distributed per ownership ratio, but we're toying around with me receiving a greater share of the initial cash-out refi proceeds (or sale proceeds) because my ROI isn't looking very good if we split everything (including a refi) based on owner equity. Is this a common issue? In our conversations so far my partner has been very gracious and understanding about this. I have read and heard about the many pitfalls of partnerships, and I appreciate that they're challenging. We'll be working with an attorney on the partnership agreement, and I'm open to hearing from others about what works (and doesn't) in situations like this. I'm grateful to have known this potential partner for about ten years, worked on properties together, talked real estate, poker, fishing, etc. [link] [comments] |
| First Time Duplex Purchase What to do for Insurance? Posted: 23 Mar 2021 08:00 PM PDT Purchased Duplex and plan to rent out both sides (not owner-occupied). What type of insurance policy do I need? Landlord Insurance? Homeowners would only be if I occupied one of the units correct? Any other advice as to what to look for / avoid would also be helpful. I plan to make the renters purchase renters insurance. [link] [comments] |
| Best way to find commercial RE investor candidates off market? Posted: 23 Mar 2021 06:55 PM PDT I have a family member who is looking to sell a daycare off market in order to avoid broker commissions. Any suggestions I can pass along to them on how to find suitable investor candidates to purchase the property? Thanks in advance! [link] [comments] |
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