All Forum Posts by: Alecia Loveless

@Desiree Board I’ve been house hacking for almost 30 years now and can’t recommend it enough.

If my spouse wasn’t opposed to moving I would try to buy a new house hack every 12-15 months and use low down payment owner occupied loans for as long as it made sense.

After this advice I feel it is much easier to invest locally where you can become a “market expert” more easily.

I’ve been tempted to look OOS or at other markets farther away from me in my home state but have decided this is just shiny object syndrome. I’ve built a great team, which is imperative, and have systems in place for my local rentals.

The farthest I’ve gone is about 20 miles away from my house which takes me about 30 minutes to get to. I feel the properties 5-15 minutes away are easier.

@Chris Kay I spent about $50K on a 3/1 reno about 5 years ago. We had to do a lot of electrical work, bathroom, kitchen rehab, total paint and a new roof.

This was my first investment property and I had a poor inspector who missed all the electrical and even though the roof had about 5 years left my insurance company made me do that.

Since then it’s generated top dollar and I’ve maybe had to put a total of $500 into it.

Learned a lot from that one.

Now we’re doing cosmetic rehabs on 1000 sq ft 2/1 apartments for about $7,000. Maybe $8500 if I have to replace the appliances. This includes flooring, painting, bathroom upgrades new light fixtures, usually there’s about $800 in electrical costs factored in here and all new cabinet hardware. We buy the cabinet hardware in bulk on Amazon and do flush mount hinges, new handles and knobs. Usually runs about $200 for 100 of each and then we use them over and over in all our units. Ravinte is what the knobs and handles are called. The flush mount hinges are about $8 for 2 at the box stores and I think I’m getting boxes of 50 for around $60.

@Taylor Hughs Hi Taylor, I started out investing with 1 SFH. At the time it made financial sense.

I then bought a duplex and eventually got bigger.

I prefer the multis because there’s one set of expenses and multiple rents coming in.

If I were in your position starting out at a young age I would focus on building my credit score first. And I would find a decent job to utilize to help get traditional lending with.

I would then find a 2-4 unit deal that I could put down a 3.5-5% down payment on as an owner occupied rental. I would do this every 12-15 months to build my portfolio. This way on a $300,000 purchase you only need $10,500-,15,000 for your down payment which if you maintain a low cost of living is very achievable every 12-15 months.

If you don’t mind moving somewhat frequently this is a great way to start your portfolio.

Seller financed deals are nice but still often require a down payment as well and can be much harder to find than deals you can finance through some form of lender.

@Frankie Paterno In most places you will likely find that your $1.2MM will go much further with existing built as opposed to developing. The current costs of construction are so high that you can just find more bang for your buck buying as opposed to building.

If I had to guess I would say your money could “develop” 1-2 houses in Staten Island but in the right market you could easily get up to 12 or possibly more good units fully paid for. If you use it as several down payments and use leverage you could be off to the races with many more Class B or C units that will still cash flow for you.

@Jason Khoury I purchased my current residence, a duplex, from a local non-profit about 5 years ago.

I was able to figure out that they had come upon some hard times and were significantly low on cash.

Then there were some issues with the inspection report that ruined 3 contracts prior to me getting involved. I hired my own expert and discovered these issues did not exist but that the expert the 3 buyers had brought in wanted to be hired to do the work so they blew them out of proportion.

I made a relatively low offer and after one negotiation we settled on a price that was about 45% lower than the original list price.

After closing, when the property taxes were due I never received any bill. So I contacted the tax collectors office and was told there was a legal loophole and that since the building had been owned by a non-profit for part of the year it would receive tax exempt status for the full year. So I saved an additional $2500 in taxes after the fact.

Be sure to check and see if there’s any tax benefits to you from buying from the non-profit.

Also this could be a potentially lucrative business partnership. If you’re in the position to buy multiple deals because this nursing home may get properties frequently. Be sure to let them know you’re interested in more deals if you are. And if they seem open to it be sure to follow up every two months or so. You don’t have to be aggressive about it but maintaining friendly contact can go a long way.

Thank you. I appreciate you thinking about this. 

That makes sense. Slightly more. 

I haven’t had to list anything with a realtor which would be more like a commission of a full months rent. So 1/4 seems fair. 

I’ve been offering a $100 referral fee for existing tenants who refer a new tenant to any of my properties. New tenant must go through complete vetting, sign the lease, pay security deposit and rent, and move in, prior to the referring tenant getting their $100.

I have decided to send a mailer to ALL my existing tenants informing them of this policy as my existing referred tenants have all been exceptional.

Does anyone else do this? Do you feel $100 is enough or should I raise it to $150 or even $200?

I want to make this a valuable thing to my existing tenants.

@Sathya Priya Sampathkumar I’m currently renovating 2 units that are 35 minutes away from me. It’s been a pain going there every day for the past 4 weeks and looking ahead to have to keep going there every day for the next 4 weeks.

I’d recommend a local market if at all possible.

It never occurred to me that I’d have to make the drive to this building for 2 months. I usually visit this property once a week.

If I were you I’d look for a subset of a more expensive market. It will likely be a “commuter” community and will still attract plenty of great tenants. Ideally it should still cash flow solidly but may not appreciate quite as rapidly as the bigger market.

@Jason Baker I attended the University of North Texas in Denton, Tx shortly after high school.

At the time they had a real estate degree (they probably still do). The courses I took during that period in real estate were some of the best and most informative courses I took during my entire college career.

They are probably the only courses I actually have used after graduation.

I think if you want to pursue real estate and can do so in college without a lot of debt that you might learn some really good stuff. I did.

While I don’t regret anything in my life if I was to go back in time I would finish the real estate degree and go into something real estate when I graduated at 22 instead of doing it half-as**ed for years.

I’d easily be $15MM more ahead in my investing career if I’d have focused on that for the 23 years it took me to get really going.

@Jim Vasica Whatever it is I think it’s worth it.

I’ve recently undertaken to paint 3 units, two 2 bedrooms and one 1 bedroom.

It’s about to kill me.

Between working around the renovation materials to the 35 minute commute to the first two units I’m having serious second thoughts about this.

We were extremely hard pressed to find a painter to do this which is why I said I could do it.

I think $3-4,000 would be reasonable for a 3/1. That is online with what we’ve been paying when we were able to find help.