All Forum Posts by: Alex Linden

Well @Maggie G., from what I can see, the first property is simply not that great of an investment unless you are able to either greatly decrease the purchase price or generate additional rental income/decrease monthly expenses. The numbers posted from your calculator simply don't add up as a good investment, even in the long term you still wind up at a negative or very small ROI.

The second investment is at least positive in terms of Cash flow; however, at only about $400 per month in Cash flow, the property still falls short of the minimum $100 per door in monthly cash flow that I have seen recommended many times on BP. Keep in mind, you should choose your own standards for a minimum monthly cash flow based on the area's market as well as your level of comfort and goal sets! 

In addition, there are other reasons I would personally not invest in either property, but I do generally err on the side of caution. All in all though, the most common recommendation I have seen as to a minimum per door monthly cash flow is between $100 - $200.

-Alex

Sounds great, will be there if I can!

Hey Chris,

First of all, welcome to Bigger Pockets. I can tell you it is an amazing site for studying and networking in Real Estate!

To start with, what kinds of investing interest you? Personally, my main interest is in Buy & Hold Investing and I am currently scouting around hunting for my first deal! 

I can tell you that one of the most valuable resources I have come across is the BP Podcast. They give you excellent links to anything from blog posts, other websites, and books as well! 

My personal favorite books for investing so far have been E Myth by Michael Gerber, The One Thing by Gary Keller & Jay Papasan, and Rich Dad, Poor Dad by Robert Kiyosaki.

These 3 books are more motivational/how to start/run a business books; but I feel they are great places to start researching Real Estate Investing. All 3 have been frequently recommended in the Podcasts as well.

Another great tactic is to look up local investors via BP or to let your friends and family know that you are interested in getting involved with REI. You'll probably be surprised by how many people either invest on the side or can connect you with someone who does! I certainly know I have been surprised several times in the last year or so.

If you have questions, these forums are hyper-active with friendly people who have probably been in similar situations before!

Good luck!

-Alex Linden

I will attend if I am able! I might have to go into work, we will see! It sounds great though!

There are a lot of different options to choose from, especially if you are interested in living in the property.

One of the benefits of using the FHA loan is that you may also be able to use the "extension" to it, the 203k loan, which also allows you to wrap the rehab costs into the price of the loan which can be very beneficial to those starting out with a smaller amount of cash. However, the FHA loan does have the 6 month - 1 year live-in requirement for the loan.

Another possible loan to consider would be the VA loan if you qualify for it. It is similar to the FHA loan, only it is specific to Veterans/Military; In addition it allows for a 0% down loan on the property as opposed to the I believe it is currently 3.5% down on the FHA loan.

Otherwise, you can always consider a partnership (depending on your goals) or Conventional Financing. Or a combination of those as well. BP is an amazing site full of amazing people and truly endless information. 

One awesome source of financing information that I am in the process of reading is Brandon Turner's, Book on Investing in Real Estate with No & Low Money Down. The majority of the information can be found throughout BP, but it is like a very convenient handbook! 

I am sure others have a lot more information on the financing topic as I am also a newbie, just thought I would point a couple quick things out! 

Good luck!

Hey all,

So I have been doing a lot of tenant - proofing research lately as I get ready to jump into the world of Real Estate Investing and one of the things that seems a prominent discussion is flooring!

I have come to the conclusion that a nice porcelain tile is a good tenant - proofing solution for flooring unless the property already had refinish-able hardwood flooring prior to my purchasing the property in which case I would keep the hardwoods.

I am opposed to having carpeting for flooring because I feel it will be easily trashed. However, if I am buying a property that already has carpeting in decent condition, should I simply maintain the carpet rather than rip it all out in an initial renovation? 

What are thoughts on this? Any other durable types of flooring that I am not considering? 

Would love lots of different input when people have time!

-Alex

Thank you very much for the tips and recommendations! 

I will likely hold off on this one for now unless I can get the property for a much lower price. 

I was pretty gung-ho about this one as besides those 2 factors it only needs some paint work and a fairly easy refinishing on some of the hardwood flooring. 

However, it may be a little more than I can handle for the time being

Hey everyone,

I have been looking into a property that I think would make a decent rental if I am able to get it for the right price; however, I have a couple concerns in regards to possible rehab.

The property is a 2 bedroom/1 bath  1100 sq/ft listed at $50000, which I will be able to turn into a 3 / 1 after renovation; comps for the area show me I should be able to rent the property for $850 - $900. 

Now then, I am a little concerned on my rehab budget mainly because of 2 things. It is an older property that has about half Knob & Tube wiring which I would replace before renting. The attic room (this is where I can make a 3rd bedroom), main bedroom, and dining room all have Knob & Tube while the kitchen, basement, bathroom, and 2nd room have updated wiring. Since I already know I would update the wiring throughout the home prior to renting, does anyone have an approximation on the cost for that? This is something I would have to hire out to a contractor as I do not have experience in electrical work.

The other unknown expense for me is that I believe the upstairs attic room which I intend to renovate has Asbestos tile for flooring (the stairway to the attic room has the same tile). I believe I would be able to replace these tiles with porcelain tiling on my own; my main concern is the fact that they may be asbestos tiles. Is this something I should just steer clear of and have a professional come in because of the tile type to avoid possible future legal issues or could this simply be a deal breaker for the whole project?

In addition, this would be my first buy & hold property. While I am confident in myself, because of these 2 potentially difficult risks, would I be better off biding my time and continuing with my deal analysis rather than jumping in on this property?

Any input on this would be excellent!

Thanks,

-Alex 

An agent I am working with recently told me that lately FHA loans have been much harder to get when looking at 2 to 4 unit properties as opposed to single unit properties. She said that in many cases this form of financing has been completely denied unless the property was only one unit. However, I am not sure if this is specific to my area, or if FHA loans in general are harder to get within the past year?

@Mark Douglas Great Pros & Cons there, much appreciated post! If I may ask, did you have any issues getting the FHA due to the fact that it was not a single unit?

@Account Closed In regards to the safety of not having the property in an LLC, I know that this particular podcast with Scott Smith is an awesome source of LLC information if you had not listened to it. In addition, I believe you can refinance out of the FHA loan after the Live-in requirement is met, and then put the property into an LLC as I understand it. Do correct me if I am wrong though, as I am a newbie as well!

https://www.biggerpockets.com/renewsblog/2015/02/12/bp-podcast-109/

That is great! Looks like you did some excellent work.