Rookie Investor Questions

[Matthew Cater]

Hi All,

I am a real estate rookie and have some questions that I am sure others have had. I thought it would be best to get these out in the open where someone can chime in on their experience provide suggestions. I have three main worries that are holding me back from committing to real estate investing and taking action. Can someone provide insight into how they got past these hurdles? Some background info: I would like to begin small by house-hacking a SFR and then perhaps other SFR investment properties.

1. Not sure that I'll be able to find (good) tenants in my market.

2. With #1, I'll have 2 mortgages and not able to find tenants. Two mortgages makes me feel uneasy with the amount of debt, Also, how do you qualify for mortgage #2 with the DTI ratio of 2 mortgages?

3. The vast amount of laws and regulations of being a landlord.

Any help/thoughts would be appreciated.

Thanks!

[Jonathan Lyford]

Hi,

1) Why wouldn't you be able to find good tenants? You have to screen people, but there are good people around.
The number of applicants is a function of the price. If the price is fair, you will be able to have enough applicants to find a good one. Yes, there is always risk that it doesn't go right. That's the risk you take in real estate, but remember the upside of real estate too.

2) if you house hacked, there would only be one mortgage. For me, the uneasy feeling of the risk of debt is mitigated if you have an emergency fund. What if you had 6 months emergency fund that would cover expenses even if it was unrented? What is you could cover the mortgage with your day job? would that change how you feel?

3) I haven't ran into any such issues so far, but like with anything, you have to weight the pros and cons. To me, the pros of being a landlord outweighs the cons, but that decision is up to you.

Hope that helps