Hi all,
I have learned a lot after lurking for nearly a year on BP forums. Thank you all for your helpful posts.
My wife and I “house-hacked” (hope that’s the correct terminology?) our way into finally becoming “investors/landlords” for the first time in July 2017.
We live in Las Vegas, where we own one rental and our current home (which will become a rental by next year).
Long term plan was always to be a relatively passive investor compared to many pros on here simply due to my “9-5” which takes up most/all my time. We have 30+ years until retirement, so we are leveraging time and credit. I am in the (good) debt accumulation phase of my life for now.
After renting for a year prior to moving out here, we bought a townhome with 5% down, 30 yr fixed, for $229k in a Class A. We immediately tore up the old carpet and put in laminate flooring all over including 3 flights of stairs (~$3.5k total for ~1500sqft). That and epoxying the garage ($500 total cost) were the only major upgrades we did.
After 9 months, we got approved again and started looking at our second/next home. Listed the first unit for rent, and the second applicant to view the place within the week accepted at a price which would cover our mortgage, PMI, taxes, HOAs, etc and then "cash-flow" +$50/month.
In 1 year of ownership the property value has gone up by ~$45k. A surreal amount. It was driven by the Vegas market but also some new similar size builds that are priced nearly $150k more than our purchase price. We are currently considering on refi'ing to drop the PMI of $75/month.
Unfortunately, our tenant has been a relatively needy one. Has quite a few complaints abot cosmetic and convenience fixes, which has run about $1500 in total. Some of the fixes are warranted but my wife and I never really had an issue with while living there.
However, I screen applicants and use Cozy.co (which I learned about here) to get auto-payment every month from the tenant. As such I would rather keep an overly “communicative” paying tenant there than deal with turnover by excusing her from the lease prematurely. Rental hikes will be inevitable considering the significant property appreciation.
Current home was also 5% down, 5/1 ARM, for $293k. Gated community, view of the Vegas strip from balcony, heavily upgraded, next to casino, also Class A. Planning to rent this one out completely furnished for $250 less than less upgraded, furnished comps in the community simply because it is a hassle to move so much furniture or sell it on short notice. Will likely need to refi this unit out of 5/1 ARM while still owner-occupied and rates are low.
Will be moving due to my career by next summer to another city, and will likely have to higher a propery manager since I won’t have time to manage them. We plan to also “5%” into the next home in the new city we move into.
Goal is to buy a multi-family complex once I make enough in my day job. Always wanted to own one. Getting closer to that goal!
Still have a lot to learn. Some of the things I hope to know more about from BP.
1. LLC protection. When & Why?
2. When do I need to hire a CPA? How complicated are taxes for single unit investors?
3. Do I need a lawyer on board? For protection or evictions?
4. Leverage techniques for a multi-family.
5. Opportunity costs of a rehab project vs day-job?
I know it was a long intro read, but I always enjoyed the beginner stories and figured it was time I repaid it. Thanks again, all!
