Trying to get started but have some questions

Rental Property Investor · Rockville, MD · Member since 2015 · 133 posts · 83 votes

Great plan!

I am not a fan of pools for rentals (sounds like a lawsuit waiting to happen). I think that is a great idea to sell it and move that cash to another location so it can work harder for you.

I like the idea of getting the inspector and appraiser license to make you a more educated investor. I personally think the agent license is too expensive and too much work but it may be worth it if you start to buy several a year.

1 Reply

Brian Ellis

Rental Property Investor · South shore, MA · Member since 2017 · 1k+ posts · 1k+ votes

6y

I second selling it. You mention the area not being good for children, who is going to rent a 5 bedroom without any kids?

You need to include cap ex in all of that as well. A large house with a pool is going to be more than your average house.

50-60k in equity is a good chunk of money to work with if you sell.

1 Reply

Collin Vosburgh

OP

Otsego, MI · Member since 2015 · 20 posts · 5 votes

6y

Originally posted by @Brian Ellis:

Hey Brian thanks. So the thing about selling it now is my credit needs a bit of work so I wouldn't be able to probably finance anything for a good year. I would hate to sell it and not be able to do anything with that money when I could be making more off the house until I can. Also I would really like to be able to still use our pole barn for our other business. Ugh I don't know. I think it would be a great property for some young adults looking to move out of their parents with some roommates or something but also that would be a big risk. And I mean it's good for a family too I guess. We've lived there for three years but it's just not right for us anymore. I don't know, what do you think?

1 Reply

Collin Vosburgh

OP

Otsego, MI · Member since 2015 · 20 posts · 5 votes

6y

Originally posted by @Mary K.:

@Collin Vosburgh

Great plan!

I am not a fan of pools for rentals (sounds like a lawsuit waiting to happen). I think that is a great idea to sell it and move that cash to another location so it can work harder for you.

I like the idea of getting the inspector and appraiser license to make you a more educated investor. I personally think the agent license is too expensive and too much work but it may be worth it if you start to buy several a year.

Thanks Mary! Yeah I was thinking inspector or appraiser as well. I think I may do that just so I won't have to hire someone. Maybe realtor license eventually. Thank you. And yeah the pool I guess might be a bad thing hmmm

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Matthew Irish-JonesBusiness Member

Real Estate Agent · Buffalo, NY · Member since 2017 · 2k+ posts · 2k+ votes

6y

Originally posted by @Collin Vosburgh:

Hey everyone, my name is Collin. I'm from Chicago but now live in SW Michigan (Otsego). I've been trying to get into real estate investing for some time now and have been studying and researching all I could. I would like to be involved with getting multi-units for buy and hold as well as gaining enough capitol to eventually be able to flip houses. I think I have a solid plan so far but would like some feedback to make sure it's a good one.

So a few years ago I bought my first house and since have about 50k-60k in equity. Now since my family and I aren't too big on the area anymore (it's kind of secluded and not the best for kids) I'm thinking of renting it out until I get my credit back up for maybe the next year and then selling and using the money I make off of it to hopefully get a couple multi-units. It's a lot of property and has 5 bedrooms and a pool. The mortgage is sort of high so I wouldn't make a whole lot off it (if I rent for 1700-1800 I would make a couple hundred a month) but at least I would be paying it down until I sell. It would be great for maybe 3-4 roommates. It also has a large pole barn on the property that I would still use for myself to run our food truck out of which is also why I would like to hang on to the property. Also I would be able to maintain the property very easily. My fiancee would buy our next house which I would make sure also has some instant equity. And from there keep acquiring more multi-units until we're able to start buying properties to flip. Any feed back or advice would be much appreciated!

Also I've been thinking of getting a real estate license, inspector license or appraiser license. Would having any of those help or even all three? What would be best?

Thanks!!

Rentals with pools are not ideal and will cost a bit more with the insurance company. If this in a rural area? If so you may not rent it as easily as you think. We have a lot higher vacancies in rural areas.

Your agent license, inspector, etc... Sure they can help you learn but, there is a cost to getting all of them in time and money. Do you want to be an agent or an inspector? If you only want to be an investor I don't know if getting all of those licenses are necessary. While you can save on every deal if you are your own agent.... a good agent is worth the 3% and will find you good deals, help with analysis, connect you with other vendors, know the market, rental comps, etc... 3% paid by the seller for a good agent is a bargain if you find a good one.

If plan on becoming an agent/investor.. Yes get your license.

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Brian Ellis

Rental Property Investor · South shore, MA · Member since 2017 · 1k+ posts · 1k+ votes

6y

Originally posted by @Collin Vosburgh:

Originally posted by @Brian Ellis:

Hey Brian thanks. So the thing about selling it now is my credit needs a bit of work so I wouldn't be able to probably finance anything for a good year. I would hate to sell it and not be able to do anything with that money when I could be making more off the house until I can. Also I would really like to be able to still use our pole barn for our other business. Ugh I don't know. I think it would be a great property for some young adults looking to move out of their parents with some roommates or something but also that would be a big risk. And I mean it's good for a family too I guess. We've lived there for three years but it's just not right for us anymore. I don't know, what do you think?

I cant speak for you, because I don't know what your market is like. But you don't need a great credit score to get an FHA loan.

3.5% down on a single family home for you and your family, and utilize the rest of the profits on something else. Or house hack a multi-family. Anything up to 4 units will qualify for an FHA loan.

That's what I would do. And that's what I have been doing. Except I buy fixer uppers and live in those while fixing them up.

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Collin Vosburgh

OP

Otsego, MI · Member since 2015 · 20 posts · 5 votes

6y

Originally posted by @Brian Ellis:

Originally posted by @Collin Vosburgh:

Originally posted by @Brian Ellis:

Hey Brian thanks. So the thing about selling it now is my credit needs a bit of work so I wouldn't be able to probably finance anything for a good year. I would hate to sell it and not be able to do anything with that money when I could be making more off the house until I can. Also I would really like to be able to still use our pole barn for our other business. Ugh I don't know. I think it would be a great property for some young adults looking to move out of their parents with some roommates or something but also that would be a big risk. And I mean it's good for a family too I guess. We've lived there for three years but it's just not right for us anymore. I don't know, what do you think?

I cant speak for you, because I don't know what your market is like. But you don't need a great credit score to get an FHA loan.

3.5% down on a single family home for you and your family, and utilize the rest of the profits on something else. Or house hack a multi-family. Anything up to 4 units will qualify for an FHA loan.

That's what I would do. And that's what I have been doing. Except I buy fixer uppers and live in those while fixing them up.

That's a good idea. I already did an FHA on the house we have now and my fiancee will do an FHA on our next house. We have the money for the down payment for that already without having to sell our current house. But what do you mean by house hack a multi-family? That sounds very interesting. And are FHA loans only a one time deal?

0 Reply

Collin Vosburgh

OP

Otsego, MI · Member since 2015 · 20 posts · 5 votes

6y

Originally posted by @Matthew Irish-Jones:

Originally posted by @Collin Vosburgh:

Hey everyone, my name is Collin. I'm from Chicago but now live in SW Michigan (Otsego). I've been trying to get into real estate investing for some time now and have been studying and researching all I could. I would like to be involved with getting multi-units for buy and hold as well as gaining enough capitol to eventually be able to flip houses. I think I have a solid plan so far but would like some feedback to make sure it's a good one.

So a few years ago I bought my first house and since have about 50k-60k in equity. Now since my family and I aren't too big on the area anymore (it's kind of secluded and not the best for kids) I'm thinking of renting it out until I get my credit back up for maybe the next year and then selling and using the money I make off of it to hopefully get a couple multi-units. It's a lot of property and has 5 bedrooms and a pool. The mortgage is sort of high so I wouldn't make a whole lot off it (if I rent for 1700-1800 I would make a couple hundred a month) but at least I would be paying it down until I sell. It would be great for maybe 3-4 roommates. It also has a large pole barn on the property that I would still use for myself to run our food truck out of which is also why I would like to hang on to the property. Also I would be able to maintain the property very easily. My fiancee would buy our next house which I would make sure also has some instant equity. And from there keep acquiring more multi-units until we're able to start buying properties to flip. Any feed back or advice would be much appreciated!

Also I've been thinking of getting a real estate license, inspector license or appraiser license. Would having any of those help or even all three? What would be best?

Thanks!!

Rentals with pools are not ideal and will cost a bit more with the insurance company. If this in a rural area? If so you may not rent it as easily as you think. We have a lot higher vacancies in rural areas.

Your agent license, inspector, etc... Sure they can help you learn but, there is a cost to getting all of them in time and money. Do you want to be an agent or an inspector? If you only want to be an investor I don't know if getting all of those licenses are necessary. While you can save on every deal if you are your own agent.... a good agent is worth the 3% and will find you good deals, help with analysis, connect you with other vendors, know the market, rental comps, etc... 3% paid by the seller for a good agent is a bargain if you find a good one.

If plan on becoming an agent/investor.. Yes get your license.

That's a very good point. I definitely want to be more of just an investor and finding a really good realtor might be the way to go. Would it be wise to get inspector certification and possibly appraisal? Then I wouldn't have to hire someone for that and can negotiate better knowing what it's really worth and what needs to be done to it if anything is wrong. I've seen classes for around the 500 mark which might be worth it in the long run maybe?

0 Reply

Brian Ellis

Rental Property Investor · South shore, MA · Member since 2017 · 1k+ posts · 1k+ votes

6y

Originally posted by @Collin Vosburgh:

Originally posted by @Brian Ellis:

Originally posted by @Collin Vosburgh:

Originally posted by @Brian Ellis:

Hey Brian thanks. So the thing about selling it now is my credit needs a bit of work so I wouldn't be able to probably finance anything for a good year. I would hate to sell it and not be able to do anything with that money when I could be making more off the house until I can. Also I would really like to be able to still use our pole barn for our other business. Ugh I don't know. I think it would be a great property for some young adults looking to move out of their parents with some roommates or something but also that would be a big risk. And I mean it's good for a family too I guess. We've lived there for three years but it's just not right for us anymore. I don't know, what do you think?

I cant speak for you, because I don't know what your market is like. But you don't need a great credit score to get an FHA loan.

3.5% down on a single family home for you and your family, and utilize the rest of the profits on something else. Or house hack a multi-family. Anything up to 4 units will qualify for an FHA loan.

That's what I would do. And that's what I have been doing. Except I buy fixer uppers and live in those while fixing them up.

That's a good idea. I already did an FHA on the house we have now and my fiancee will do an FHA on our next house. We have the money for the down payment for that already without having to sell our current house. But what do you mean by house hack a multi-family? That sounds very interesting. And are FHA loans only a one time deal?

FHA is limited to one buyer, one house at a time. But that doesn't mean you cant sell your house and do another FHA under your name. You just cant have two FHA loans. You are required to live there for at least one year, and then you can move out and rent it.

Househack refers to living in the house while you rent out either the other units or bedrooms. You can do this with a fixer upper to gain the most value, or with a turnkey investment. Either way It is financially the smartest way to go when you are starting out. I househack by living in houses that are in very bad shape, and fix them up over time. Once im done with the renovation, I usually refinance to a lower rate, take equity out, rent it out and move on to the next house.

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Matthew Irish-JonesBusiness Member

Real Estate Agent · Buffalo, NY · Member since 2017 · 2k+ posts · 2k+ votes

6y

Originally posted by @Collin Vosburgh:

Originally posted by @Matthew Irish-Jones:

Originally posted by @Collin Vosburgh:

Hey everyone, my name is Collin. I'm from Chicago but now live in SW Michigan (Otsego). I've been trying to get into real estate investing for some time now and have been studying and researching all I could. I would like to be involved with getting multi-units for buy and hold as well as gaining enough capitol to eventually be able to flip houses. I think I have a solid plan so far but would like some feedback to make sure it's a good one.

So a few years ago I bought my first house and since have about 50k-60k in equity. Now since my family and I aren't too big on the area anymore (it's kind of secluded and not the best for kids) I'm thinking of renting it out until I get my credit back up for maybe the next year and then selling and using the money I make off of it to hopefully get a couple multi-units. It's a lot of property and has 5 bedrooms and a pool. The mortgage is sort of high so I wouldn't make a whole lot off it (if I rent for 1700-1800 I would make a couple hundred a month) but at least I would be paying it down until I sell. It would be great for maybe 3-4 roommates. It also has a large pole barn on the property that I would still use for myself to run our food truck out of which is also why I would like to hang on to the property. Also I would be able to maintain the property very easily. My fiancee would buy our next house which I would make sure also has some instant equity. And from there keep acquiring more multi-units until we're able to start buying properties to flip. Any feed back or advice would be much appreciated!

Also I've been thinking of getting a real estate license, inspector license or appraiser license. Would having any of those help or even all three? What would be best?

Thanks!!

Rentals with pools are not ideal and will cost a bit more with the insurance company. If this in a rural area? If so you may not rent it as easily as you think. We have a lot higher vacancies in rural areas.

Your agent license, inspector, etc... Sure they can help you learn but, there is a cost to getting all of them in time and money. Do you want to be an agent or an inspector? If you only want to be an investor I don't know if getting all of those licenses are necessary. While you can save on every deal if you are your own agent.... a good agent is worth the 3% and will find you good deals, help with analysis, connect you with other vendors, know the market, rental comps, etc... 3% paid by the seller for a good agent is a bargain if you find a good one.

If plan on becoming an agent/investor.. Yes get your license.

That's a very good point. I definitely want to be more of just an investor and finding a really good realtor might be the way to go. Would it be wise to get inspector certification and possibly appraisal? Then I wouldn't have to hire someone for that and can negotiate better knowing what it's really worth and what needs to be done to it if anything is wrong. I've seen classes for around the 500 mark which might be worth it in the long run maybe?

The more knowledge you have the better but, I don't know if getting licensed in these things is completely necessary as an investor. I don't always do home inspections personally, I don't feel I need someone to take a picture of something and tell me this needs to be further investigated by a professional lol. However.. If I was concerned I would hire an inspector that I trust and gladly pay him for his services. Same thing with appraisals if you are using a bank, the bank is going to hire an appraiser. I don't believe they will let you provide your own appraisal. If you are a cash buyer that is helpful but again, a good Realtor can provide comps quickly and efficiently.

The professionals in the industry can be worth the fee's if they know what they are doing. You need to decide where you time is best spent.

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Michael Gayer Jr

Inspector · Mililani, HI · Member since 2016 · 170 posts · 31 votes

6y

@Collin Vosburgh Aloha from Hawaii! I own a home inspection company. The entry cost to becoming a certified inspector is not expensive at all. I have purposely gone into the inspection field to create a business, as well as a good way to network with others Real Estate professionals, and become a full-time real estate investor in the near future. My recommended certifying organization is InterNACHI. They are the only one with a recognition from the US Department of Education. Let me know if you have any further questions.

However, this is not necessary to become a successful real estate investor. Keep learning and go to local investor networking events. Some are listed in BiggerPockets for our local areas. You can find active investors who are doing deals right now and you can offer them a service of some sort in exchange for learning from their experience. I hope this helps. God bless.

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Trying to get started but have some questions

Trying to get started but have some questions

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