All Forum Posts by: Adrienne Bryson

If it's not earning you money then it's not an investment, just a purchase.  Buying a house is pretty much like buying a car.  You spend spend spend on it, and unless you get an extremely rare and special deal, you will never make your money back if and when you sell it.  You might be able to get some of your money back if property values increase or if you do some improvements that increase the value of the house more than what they cost you... But when you add it all up - down payment, closing costs, taxes, insurance, mortgage payments, utility payments, landscaping, carpet cleaning, appliances, etc etc etc - it's going to be a huge financial loss.

I bought for myself first, that was before I was aware of "house hacking".  Now that I know, I really wish I had done that.  My husband and I are young (26) and only bought our house 1.5yrs ago, so we are somewhat cash poor and don't have much equity.  That puts me in a tight spot now that I'm looking to invest.

So I'd recommend not doing what I did.  Buy a small multifamily (duplex, triplex, etc) that you can afford with your down payment, that will still cash flow if one of the units is not rented (because that's where you'll be living).  You can essentially be paid to live for free.  That would mean that whatever you would otherwise be spending on rent/mortgage, can now be set aside and saved up to put towards another investment.

There's a "set" of four SFR rentals up for sale right now. I did an analysis of the set on the BP rental calculator. The calculated cash flow would be about $712, which would be about $178 per property average, which would be a reasonable deal. But using the 50% rule, the cash flow would be about $450, which would only be about $112 per property average, which is low.

So my question is, how do I know if this is a good deal or not?  I'm not necessarily looking to buy  I'm just trying to get a good feel for what exactly a "deal" really looks like.  Of course there's the option of taking only one, or two, or three of the properties also.  If I were to buy, would it make more sense to only take the one(s) that come out best on paper?  Or would it be better to take the set and negotiate a lower purchase price or something?

Try the rental calculator here on BP and see if it would actually cash flow.  Sometimes a property looks great on the surface, but when you actually crunch the numbers it doesn't make sense.

If the numbers look good, there's probably some other reason why nobody wants it.  Maybe there was a crime wave in the area recently.  Maybe the cost of utilities has been climbing at an unsustainable rate.  Maybe vacancy for the area is really high.  Maybe the property has some "hidden" issues like a leaky roof or cracked foundation that add enough expense to not make it worth buying.  Maybe it's not appraising for anywhere near asking.

The only real way to find out what's going on is to dig deeper into it.

Why not?

Rather than asking "if I" or "can I"... Ask yourself "HOW WILL I".  Make a to do list that takes you step by step from where you are now to where you want to be, and then get to work.

You can buy a few books TODAY (on flipping, funding/financing, etc).  You can figure out your fundraising strategy and start TODAY.  You can start networking (with North Carolina investors, attorneys, agents, etc) TODAY.

Makes sense @Adam Schneider, so how much do you normally pay/request?

From what I've seen the "zestimate" is all over the place and not worth even looking at. Zillow does have a feature where you can sort of run your own comps, and it's more accurate than the zestimate. I've run quite a few and compared to comps my realtor pulled from MLS, and her comps are usually about 10% higher...which is good for me as I want to be conservative with my ARV estimates anyway.

I've also compared Zillow to Realtor.com and to Redfin.  Realtor.com seems to be least accurate of the three, with the other two being reasonably similar.

I do have a contract template...not sure how to attach it here but if you'd like to message me I can shoot you a copy!  Of course, have it looked over by a local attorney.  What works in one state won't necessarily work in another and you want to (1) make sure you're legal and (2) avoid any loopholes that may cause issues for you.

It is understandable to be wary, but it's not a bad idea to have a good relationship with a realtor in general if you plan to get into investing!  And remember that the seller pays realtor commissions so if it turns out a realtor is needed it's no real skin off your nose.  But for contracts an attorney is probably a safer bet anyway.

Ask the seller which title company/attorney they are dealing with, and contact that company/attorney directly about depositing your earnest money.

Thank you for that insight @Michael Bowman!

I figured as much @Scott Ryne after doing so much research and never seeing/hearing it mentioned once.  So I can take it out of my purchase contract I suppose, but should I have it in my sale contract for when I sell a house to a retail buyer?

@Alex Franks with you being the 3rd person outside of NC to say that, I'm going to say it's a state specific thing.

@Randy E. interesting... Especially that I now know the seller of my house is an investor.  I guess it's up to the individual whether to request/pay or not.  Now I know!

@Account Closed I already know what it's for.  It's basically like earnest money except it goes straight to the seller and is not credited towards the purchase, and the seller keeps it no matter what happens after that point.  I'm asking if it's SOP for investors, or just a "retail" thing.

@Wayne Brooks perhaps you're right that it's local.  I'll ask on the North Carolina forums too if nobody in this general forum can answer.