Real Estate Investing: Real Estate is not passive |
- Real Estate is not passive
- Rent vs Sell in San Diego, CA
- How many calls a day do you get offering to buy your property 'for cash'?
- Scumbag Landlord Spectrum
- midwest home - 2/1 or ?
- Possible renters approaching us on our lawn
- Anyone have YouTube channel recommendations for home improvement/maintenance tutorials for beginners?
- Pre-Fab Homes / Land Deals
- SOP's on Vetting a Potential Purchase
- 3 unit FHA property worth buying after issues in inspection-Chicago, IL?
- What can go wrong in an old house
- Real estate investor wants to do a subject to deal on one of my properties
- benefit of leverage/appreciation vs. debt paydown
- Complete real estate noobie here and would like some help from complete strangers
- I am thinking of cash refinancing to an interest only loan for my rental.
- Tax valuation N/A?
- Buy new Construction or go with old homes
- Prepping house must dos for highest rental value
- How much value does parcel/lot size add when compared to neighbors?
- Help Comparing two Refi Quotes
- I have $45k in a “mess around” stock account. Would it be wise to liquidate for a down payment?
- Rules for Second Home Mortgage
- Mortgage vs HELOC for down payment on investment property
- Newbie 23F. Need advice on house hacking.
| Posted: 11 May 2021 08:45 AM PDT In my first year of real estate I've had many duties annoyances.
This all ran me 10k and a lot of my time. This is a warning to all people entering real estate. I'm happy I bought the property but there is absolutely no free lunch here. [link] [comments] |
| Posted: 11 May 2021 11:06 PM PDT Hi All, I own (and live in) a 3bed / 2ba SFR about 1200 sq ft in San Diego, CA. Prices here (like many places) have exploded in recent years (especially in the last 12 months). I have been looking at moving into something with more bedrooms and sqft as my family has grown. But what to do my 3/2. One option would be to sell it and use the equity as a significant down payment on the next home, or keep the home and turn it into a rental property, taking out a much larger loan (with PMI and hefty payments) for the next house. I wanted to run the numbers to see if this is even feasible and the rental returns look dismal. On the sale side, an identical model in my neighborhood sold for $812K last month. On the rental side, my research shows that 3/2 homes in my neighborhood rent for about $2,800/month. My modeling shows I'd net about $17,000/year after expenses (but before debt service) and basically break even after debt service. Rental Income: $2,800 x 12 = $33,600 Expenses: $2800 (vacancy), $6000 (repairs), $2400 (management fee), $5500 (taxes) = $16,700 Debt Service: $17,400/year ($200K @ 2.75%) From a cash flow perspective, this doesn't seem to make sense, but I've got two questions: 1) Am I looking at this at the right way? I don't see how anyone would want to be a landlord in my market with these numbers, but clearly there are some. 2) I have heard in the mainstream financial news that institutional investors looking to park cash as a hedge against inflation are part of what's driving up home prices. These investors would, ostensibly, be renting these homes out. What would be so appealing to them that I'm missing? Even if you bought the property as an all-cash deal, you'd still only net about $17K/year. Taking that ~$800K (assumed purchase price) cash and parking it in a conservative bond fund returning 4% a year would seem much better. It would seem rent prices need to be about $4,500 - $5,000/month to justify the house prices being paid. What's going on? These questions have been spinning in my head for weeks, so I greatly appreciate your perspectives. [link] [comments] |
| How many calls a day do you get offering to buy your property 'for cash'? Posted: 11 May 2021 01:47 PM PDT I'm at maybe 4 per day. I usually don't answer unknowns so this is a guess. I love how they always say 'for cash'. I wasn't going to sell it for abox of Newports and Puma Sweats (+1 to anyone who gets the reference) [link] [comments] |
| Posted: 11 May 2021 12:35 PM PDT I consider myself to be a descent landlord. I answer tickets promptly. I solve problems asap. Having been in the business of real estate a little while now I have discovered the "scumbag landlord spectrum". These are the types of landlords I've encountered. Scumbag Landlords: Complete piece of shit to his neighbors and tenants. Is ridiculously cheap and is always trying to get a "deal". His properties are always falling apart. Probably wears a sweat suit or a cheap button up. Dismissive landlords: Not a complete ass but let things go too long. Pisses off his tenants by not fixing things. The most common type. Average Landlords: Not particularly good at what they do. But not bad either Descent landlord: Timely and has a descent service schedule. Professional Landlord: Has professional help and likely uses a reputable management company. Please respond with any subtypes you find in the wild. [link] [comments] |
| Posted: 12 May 2021 12:51 AM PDT I'm under contract for my first home, in the midwest. It's a 608 sq ft 2/1, built in 1905. There's no garage. Had a home inspection last week, and an attempted termite inspection, who left since there is no crawlspace. Both suggested to cut openings in the floors of 2 rooms so they could look underneath. The termite inspector sent the realtor and I a quote for $125 to pull the carpet back and cut the openings, for the owner to cover, so both parties could look under the house and complete the inspections. I met the home inspector and stayed in the house while he did the inspection. I learned there are a lot of issues with the house. Uneven floors, uneven ceiling, roof issues, leaks, some mold. My eyes hurt after being in the house for that time, so I am concerned of mold. The siding goes to the ground. Wiring - 2 outlets don't work, the dryer line is jerry rigged to the water heater breaker. I'm handy, but I see this may be more work than I anticipated. It's only a $40k house, and the comps, according to zillow are also $40k. I hope I'm using the right lingo, I'm new at this. I've sent the title company $500 as a good faith deposit, spent $200 on the home inspector, and will spend $30 for the termite guy if he cuts the openings in the floor and completes his work. Realtor spoke with the owner and relayed to me that there's not much room under the floor boards and that the pipes are about 10 years old. Seems he's ducking and doesn't want to pony up and pay to have the openings cut in the floor. I pushed back, and insisted that the owner does do it so we know what's under the house. I also just saw a craigslist ad for a 3/1, for a little less, with a 1 car garage, and the comps are about $80k. So, now I am wondering if I should continue on the 2/1, or work my way out of it, if I can, and pursue the 3/1 and if so, how to go about it. I don't have the cash for both at this time, unless they both come down in price. As for loans, having an issue as I'm self employed. So, I'm thinking, if I pursue the 3/1, as it's off market, should I get a realtor, ask if I can bring the home inspector, or just go for it if it seems doable, since there's equity, or what would be a better way to go about all this? [link] [comments] |
| Possible renters approaching us on our lawn Posted: 11 May 2021 03:01 PM PDT Hello! My husband and I recently bought our first investment property—a duplex. We are renovating it while living in one side, and have had two different potential renters knock on our door and ask if they could rent the other side. Is this normal? We don't have a sign to lease up and haven't listed anything yet, though it is pretty clear that we are renovating. It still feels a little strange. I suppose they could guess based on the projects going on that the property is being fixed up. I feel more inclined to rent to people who go through the typical avenues to find a rental than people who scout out properties and approach you on your doorstep. However, if people are that motivated to rent from you, maybe they would make for great renters. Anyways, since we're new at this I don't have a strong sense for what is normal or best or potentially a bad direction. Thanks for any help! [link] [comments] |
| Posted: 11 May 2021 02:07 PM PDT Never was taught this stuff by my parents and would like to get more acclimated to using tools and general home repair/maintenance. If anyone knows of good YouTube channels dedicated to this, I'd love to give it a watch! [link] [comments] |
| Posted: 11 May 2021 10:23 PM PDT Hi all, I was wondering if anyone has experienced buying raw land a building Pre-fab homes for quick flips? Seems like pretty reasonable numbers when I do the math, and reasonably low risk, is there something big I'm missing here? [link] [comments] |
| SOP's on Vetting a Potential Purchase Posted: 11 May 2021 01:35 PM PDT If you've been in the game long enough, you'll likely have a set of standard operating procedures that you go through to declare whether a property is a good deal or not. Please note that this list is focused on the physically elements of the property that can make or break a deal, depending on the price to correct any issues. I know an investor whose SOP's go something like this (in no particular order): 1) Foundation inspection 2) Roof Inspection 3) Float Test 4) Duct leakage test 5) Water heater test (if there's still one on the property) 6) Soil analysis 7) Is the property in a flood zone? 8) A/C system diagnosis Thoughts? I know that some of these bullet points are dependent on the geographic location of the property. For example, if you're buying a house Los Angeles, being in a flood zone is likely not something your too worried about. [link] [comments] |
| 3 unit FHA property worth buying after issues in inspection-Chicago, IL? Posted: 11 May 2021 05:03 PM PDT Currently under attorney review and have a 3 unit property under contract. Inspection found roofing, gutter, and flashing issues. My inspector found some termite damage in the basement BUT my general contractor said it is just water damage and rotting wood under the basement frame. Purchase price: 580k, I placed an offer 5k higher Rent per unit: $1650 on the low end. So roughly 5k It will be owner occupied since I am going FHA. So down payment is ~ 20k and with everything else closing will be <30k Seller is only willing to give 3k for fixing items. Property is built 1890. Decent rehab and spacious. Just scared since it's a huge purchase. Any advise or help would be greatly appreciated! [link] [comments] |
| What can go wrong in an old house Posted: 11 May 2021 08:23 PM PDT I'm on the lookout for a house and the new home prices are sky rocketing .Somehow I don't want to pay huge $$$ on the newer homes and also the structural quality in the older homes is total missing in the newer ones. That being said ; I'm kind of inclined in buying older homes (20-30 year old) but wanted to know what can really go wrong buying an older home if it passes through the inspection or I know that roof is probably old , needs some cleanup ( may be OK if the expenses are under $10K). What else needs to be checked if I need to consider buying an home something 20-30 years old. Also how does the older homes appreciate compared to the newer ones? I know the newer ones appreciate higher but how much of an difference does it make which can a difference in buying older/newer homes. How do you treat this situation [link] [comments] |
| Real estate investor wants to do a subject to deal on one of my properties Posted: 11 May 2021 08:13 PM PDT tl;dr - An investor approached me wanting to do a "subject to" purchase plus cash for my current equity. Good deal or bad and why? I am a small time (3 properties) investor and I have decided to bail on the whole thing as my other endeavors are far more lucrative and require more time from me. Also the time seems to be right to sell my small portfolio off. On one of my properties, I was contacted by an investor buying other properties in the neighborhood (confirmed). They want to do a "Subject To" + Cash (combined for $200k total) deal where I sign the deed over to them and they pay me $1200/m as well as a lump sum of $93k. House would probably sell with realtor at market for 225k. I have a mortgage payoff for 107k and a monthly mortgage payment of $1000.00. They say this is a way to avoid capital gains taxes, but I haven't checked with my CPA yet. Why does this sound too good to be true? I am not in a position where I HAVE to sell and I'm not in trouble. I want to avoid possible tax hikes later. Are there any additional tax benefits for me here? I realize the loan is still in my name and I would pay the mortgage with the 1200 monthly payments... But what if they stop paying and the deed is in their name? Why is this a bad deal? I'm in Missouri if that matters. [link] [comments] |
| benefit of leverage/appreciation vs. debt paydown Posted: 11 May 2021 08:11 PM PDT hi all, rookie here, so sorry for the dumb question. Still constantly comparing investing in 401K/retirement vs. a rental property. In adding up the rental property, I want to make sure I'm understanding the benefits. For now, let's not focus on cash flow or tax benefits. My questions are about appreciation, leverage, and paydown of the mortgage. I understand the benefit of appreciation is multiplied by 4 or 5 if you take out a loan for around 75-80%. So does that mean if a mutual fund's return was around four times higher than appreciation, it would still be around an equal return? Also, is the benefit of debt paydown by your tenant a different and additional benefit than the leveraged appreciation, or is there an overlap there that should not be counted twice? Thank you. [link] [comments] |
| Complete real estate noobie here and would like some help from complete strangers Posted: 11 May 2021 07:13 AM PDT I have an opportunity to buy a studio apartment in Hoboken NJ from a family member , she is gonna charge me 245k, it's in a building where someone owns 7 of the 8 units and rents out all of them and the building is pretty meh n not well kept due to the fact that it's all renters , I work in Nyc so I feel like I'd live there for a few years and rent it out after. I currently have 125k in the bank and would be able to put 20% down. Thoughts? [link] [comments] |
| I am thinking of cash refinancing to an interest only loan for my rental. Posted: 11 May 2021 03:29 PM PDT I have to buy a primary from the cashout and also have cash on hand should the right property show up. Right now in my market the inventory is super tight even for primary homes. An interest only loan seems to fit the bill. I have to stay in this house a max of 10 years. So if I got an interest only loan, I could pay interest till I am comfortable to convert it into a 30 y fixed or even 20 yr. I can keep making principal payment like I got a 30 y fixed. Same idea as getting a 30 y fixed and paying off in 15 years. The catch is the IO is higher rate ? Is this a sound idea of a completely daft one ? Thanks [link] [comments] |
| Posted: 11 May 2021 12:19 PM PDT New one here. For those unfamiliar, here in Central Texas we have a great property tax system where the county sends you a valuation letter every year saying how much your value has increased. Its your job to then respond to them and protest the valuation by explaining that your property is basically worthless and the home is at best a liability to you, the unfortunate owner of said POS property. The county then counters with a number in between since its not worth their time to really fight it. If the numbers are too far apart, you get a court date and get to argue with each other. Lots of fun, great system, definitely not in need of reform and certainly not a waste of everyone's time. So this year a property I've had for 4 years didn't get a letter. I log in and the tax valuation says "N/A". My previous years all look the same. My neighbors all have theirs listed... what's the deal? Deadline for protest is a week away. Has our benevolent government decided I deserve a break this year? I'm tempted to let it slide and see if I get a tax bill, but I also don't want to miss the deadline to protest. Anyone seen this before? [link] [comments] |
| Buy new Construction or go with old homes Posted: 11 May 2021 06:12 PM PDT Been debating this for awhile and since this is going to be my first purchase I will like some inputs as I'm new to all this. Been researching and honestly the information is overwhelming . Planning on buying my first home with a VA loan. Just want some inputs on going with a new construction or buy an old house. The plan is to eventually draw equity from the home for future investment. All suggestions are welcomed. Thanks [link] [comments] |
| Prepping house must dos for highest rental value Posted: 11 May 2021 10:36 AM PDT Currently prepping my current home which will be my second rental in about 2 months when I move. What are things that I should focus on in a house thats been well lived in, in a nice middle class neighborhood, that will rent for around $2000-$2400. Rentals are hard to come by so I know it will go fast. My plan: Paint inside. It needs it bad. Living room carpet. Any advice for brands/costs? Ive done flooring myself but this doesnt look easy so I may have a company like lowes/hd install Washer/dryer: Do people expect these? If so i will need to purchase Yard: being landscaped now. I plan to allow tenant to cut lawn but i have landscapers for bushes and weed/feed Anything else Im mossing that you would do to a new to be rental? [link] [comments] |
| How much value does parcel/lot size add when compared to neighbors? Posted: 11 May 2021 11:20 AM PDT Hi all, I'm looking at buying a property and I am having trouble giving analysis to the creative options of the deal... Being in the city, the parcel is the biggest/widest parcel of 100s in the neighborhood. Most houses are skinny rectangle parcels, going from the street to a back alley, about 3000sqft. The parcel I am looking at is about 3x as wide, also goes from the street to alley, and is 10,000sqft. The whole back half of the property from the house to the alley is not used and is zoned RS1-7. With that, I can build some type of ADU The property contains a 2bd/1ba with a 1/1 ADU(small) and requires minor work. At 570k listing, with renovations required, the deal isn't great and would be a pass, but it has 5000sqft of open parcel... Am I looking into this too much? Is there something I am missing? In what ways would you be looking to add value with the additional 5000sqft on the parcel? Would you pass? [link] [comments] |
| Help Comparing two Refi Quotes Posted: 11 May 2021 01:29 PM PDT We have 393 left on our mortgage -> orginal rate 3.75. Quote 2: I can't add up the numbers enough to understand why on quote 1 we're borrowing an extra 7k to cover 3k in closing costs. Number do or do not add up there? It also makes me nervous cause I was set to go with quote 1. Quote 2 swooped and said hey - we'll appraise your place at 20k more than quote 1 and set you up with no mortgage insurance. [link] [comments] |
| I have $45k in a “mess around” stock account. Would it be wise to liquidate for a down payment? Posted: 11 May 2021 07:27 AM PDT I have a brokerage account that is currently valued at $45k mostly in index funds. I was planning to keep growing this as a sort of vacation/fun money account. Recently, I sold my house(would've rented it out, but it had seriously expensive problems the buyer said they'd waive), upgraded to a nicer one and am realizing just how beneficial the leverage aspect of real estate is. Would it be wise to liquidate my $45k for a down payment on a $200k rental property? I'm not interested in BRRR; I'd like to rent out a habitable house, grow equity and refinance as needed for future down payments. I'm just trying to weight the comparison to the stock market and the less liquid nature of real estate while potentially forgoing the fun, but depreciating purchases I was initially saving for. [link] [comments] |
| Rules for Second Home Mortgage Posted: 11 May 2021 02:58 PM PDT Hi, I have some questions regarding a second home that asking the loan officer might cause problems. Am I allowed to rent out rooms in a second home? As for the entire house, does the no-rental restriction only apply to the first year or to the rest of the loan period? For example, a primary mortgage only requires 1-year of living there before I can move and rent it out. Thank you. [link] [comments] |
| Mortgage vs HELOC for down payment on investment property Posted: 11 May 2021 01:51 PM PDT My wife and I currently own 1 investment property we're using as short term rental and its cash flowing very well with traveling picking back up. We're looking to buy a second investment property to also do short term rental. We're looking for multi-families that hover around the 650k-700k range which would require a down payment of 130k- 175k. There are some properties we like but we haven't reached out yet as we want to have our funds sorted before we go shopping. We own our home free and clear. Wondering whether taking a mortgage against our primary to use as down payment would be best or to take out a HELOC. I understand the down side of paying interest on funds that may not be deployed vs the risk of HELOC debt being suddenly called and not sure which is worse. Another consideration is that there is the possibility we may need to move in 6 months- 1 year from now for work, but its not certain yet. We could just wait till after we move but we hate to lose out on opportunities and momentum in our REI. [link] [comments] |
| Newbie 23F. Need advice on house hacking. Posted: 11 May 2021 07:42 AM PDT So I have 20K saved and I am staying on someone's couch now (due to a recent breakup) and I want to buy a small place of my own that I can maybe house hack and then turn into a LT rental. I have 1 year and a half of property management and dealing with 8+ tenants. My job is remote.I can move anywhere in the country (USA) What is your advice for me? edit: what is the best place in the country to do this? Where I can gain appreciation on my property. [link] [comments] |
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