Looking to Purchase First Property/Investment

[Ahmad Aram]

Hi Everyone! I am in the NOVA/DC Area and am wanting to start/build a rental portfolio. I am a licensed Real Estate Agent in VA so the process of finding the homes/purchasing is not what concerns me. It's more so learning the in's and out's of doing things on the investment side. And all the tools that are out there.

Ive got close to 100k cash that I can use towards a down payment on a 1br,1b condo(which seems reasonable and easier to rent near me). And already have a LLC set up for my Real Estate Sales business. Some questions I have are

- Should I create another LLC to be purchasing these homes?

- My Lender suggests I live in the home for a year or so to benefit from the lower interest. This I am not opposed to as the properties I am looking at are very close to where I rent currently.

- Are there any tools out there that could potentially project what the property could rent for? I have MLS access and have been crosschecking the numbers that sites like Rentcast.io provide and they seem pretty darn accurate. MLS is obviously more in depth but for a rough number Rentcast seems to be great?

- Condo prices I am thinking are in the 350k and below range. Thinking a BRRRR strategy? They are mostly older condo buildings so they could def use some remodeling to increase the value. For sake of region I am in the Tysons|Mclean area.

Any advice is obviously appreciated and looking forward to hearing from you all :) Thanks!!

[Alecia Loveless]

@Ahmad Aram It can be harder to purchase homes using an LLC as opposed to your personal name. Depending on how many you anticipate buying and how quickly may provide insight into whether or not you want the added hassle of finding loans with an LLC. It is also my understanding that many lenders still require a personal guarantee for properties held in an LLC. I don't believe this is the case for DSCR loans.

One thing I will caution against is over renovating a condo. Just because you buy something for $350K and renovate it and put money into it doesn't necessarily mean that you will be able to get a much higher value on a BRRRR strategy if none of the other units in your development or area will comp out.

There are plenty of dated condos in my town that cost between $275-350K which could easily use $100K worth of renovation. If someone wanted to live there for years and years it might make sense for them personally but given that nothing else in the association is selling for more than $350K it would be futile.

I had friends some years ago that in a condo put in high end appliances, it was a chef and his wife, so think $20,000 stove, sub zero refrigerator and top end dish washer. Granite countertops before they were standard. They put in beautiful hardwood floors and high quality finishes throughout. They decided to sell and wanted $50,000 more than comparable units. It took them 4 years to sell and they had to lower their price to what other units were getting and finally just took a bath on the cost of their upgrades.

Just be careful with your budget and do t over renovate for the comps.