Save up as much as possible, and if the market is still high when you're starting to purchase go out of state if you want to own rental property. It's pretty easy to do these days, just make sure you do the right due diligence- inspections, appraisals, and all the like. Get a recommendation for a good, trustworthy property manager.
Real Estate Agent 路 Los Angeles, CA 路 Member since 2019 路 58 posts 路 11 votes
7y
@Jonathan Oh yes, I agree it鈥檚 not a lot. I鈥檓 starting out my rental arbitrage business so I will definitely be saving most of that to make my first investment out of state. Thank you! I will definitely look into hard money lenders as well.
Real Estate Agent 路 Los Angeles, CA 路 Member since 2019 路 58 posts 路 11 votes
7y
@Joel Fine thanks for sharing! What do you mean when you say landlord hostile city governments? Any areas you prefer / stay away from specifically? Thank you.
@Joel Fine thanks for sharing! What do you mean when you say landlord hostile city governments? Any areas you prefer / stay away from specifically? Thank you.
Here is an example. I bought a quad in the city of Cleveland in January. The quad was run down and basically uninhabitable when I bought it. I had my contractor do a complete cosmetic rehab - $50k worth of work. Now the place looks good and is ready to house four small families.
In May, I received a notice from the city of Cleveland. It was a criminal complaint against me. My crime? Apparently back in March, my contractor had some debris in the yard. Probably when he was doing demo. The debris is long gone. Oh, and the "criminal" complaint appears to have been pretty lightweight - I just had to pay a $95 fine. So in reality it's just a cash grab.
As far as areas to stay away from...I avoid war zones. I try to stay at C- or above. Other than that, as long as the numbers work, I'll consider it.
@Elliott Elkhoury thank you! Any states you like / recommend specifically?
I like Indiana as far as midwest goes. Best laws, low taxes and taxes tend not to be reassessed upon sale in the counties I work in which is a big help. I see low owner paid utilities bills for sewer/water/garbage in small multifamily. The portion of the state nearest Chicago experiences excellent cap rates and rental demand in working class areas because of it's proximity to the midwest's biggest city.
Lender 路 Los Angeles, CA 路 Member since 2017 路 916 posts 路 647 votes
7y
@Nancy Mascorro Food for thought here but I closed on fourplex in glassell park/eagle rock area in January of this year through the NACA loan program. I put no money down and rehab was working into the loan amount so it is all covered. Once its up and going I aim to get about 90/door or 270 cash flow a month. It took about a year and a half to close this loan but I now will house hack in LA and have no out of pocket costs once the units are occupied.
Lender 路 Los Angeles, CA 路 Member since 2017 路 916 posts 路 647 votes
7y
@Aaron Gordy thanks man. It took a lot of work to get it up and ready (about two years from beginning of NACA to when the first tenants move in) but means I will live rent free in LA.