All Forum Posts by: Alfie Park

@Steve I'll be downsizing from a 2000 sq foot house to maybe a 1500 sq ft older house with 3 bed 2 bath so not a huge cut. Just older house to free up cash.

@Kenneth thank you for mentioning other options. Something to consider

I'm currently living in a new house (~$400K) and am thinking about downsizing to a cheaper older house (~$250K) nearby, still in a good neighborhood, to generate cash for investing in several investment properties.

My mortgage on the new house is paid off, so if I put down 20% down on older house I would free up more than $300K in cash (realtor fees, transaction costs, etc.). This could then be used as down payment on several investment properties.

I do have 3 young kids so a bit worried about how we will transition as a bigger family to an older, smaller home. But anyone else have similar experience doing this?

I can't use the FHA loan b/c I don't plan to live in the house. Hard to move around with 3 little kids.

I decided to back out of deal paying $100 option fee. Next time will look for property with much bigger margin of safety for cash flow!

I can't use the FHA loan b/c I don't plan to live in the house. Hard to move around with 3 little kids.

I decided to back out of deal paying $100 option fee. Next time will look for property with much bigger margin of safety for cash flow!

Quick update (and also request for advice!):

Got the estimated mortgage #'s back from lender and starting to get cold feet. Main concern is that what I assumed to be slightly positive cash flow might actually be break-even to negative cash flow depending on maintenance.

Numbers shared below:

1) $210K purchase price, 2.9% property tax rate, $120/month insurance, 4.125% 30 year mortgage @ 25% down, $40/month HOA

2) Comes out to $1,440/month in monthly payments which is what the lender quoted.

3) Market rate based on recent comps is $1,700 to $1,800/month so let's assume $1,750/month for easy math.

4) That leaves difference of +$310/month in cash flow but if I assume $100/month in maintenance/CapEx and assume 10% vacancy (so $170-$180/month vacancy costs) then it's essentially break-even.

Am I missing anything, and if it's break-even should I get out of the deal? If so I think I'm only on the hook for $100 option fee.

Thanks in advance for advice!

Thanks for the insights everyone! 

I decided to make my first purchase in far north suburbs (Frisco/Prosper/McKinney north of Eldorado). Got in around $200K and should be able to generate a little positive cash flow with more emphasis on long-term appreciation given terrific schools, commercial/highway development, and companies moving HQ's more north (e.g. PGA, Dr Pepper).

Posted about it on this thread:

https://www.biggerpockets.com/forums/758/topics/751326-help-first-investment-property-in-north-dallas-suburbs?page=1#p4418627

Thanks for the insights everyone! Definitely talked me out of the condo/townhouse idea. 

I decided to make my first purchase in far north suburbs (Frisco/Prosper/McKinney north of Eldorado). Got in around $200K and should be able to generate a little positive cash flow with more emphasis on long-term appreciation given terrific schools, commercial/highway development, and companies moving HQ's more north (e.g. PGA, Dr Pepper).

Posted about it on this thread: 

https://www.biggerpockets.com/forums/758/topics/751326-help-first-investment-property-in-north-dallas-suburbs?page=1#p4418627

Thank you for the tips! I was looking into Cozy so @Lallu it's good to hear you find it helpful. I'll look into some of the other tools mentioned as well.

One quick question on listing/marketing the property when self-managing: how to best do this? There's so many websites out there to search for rentals...

Also any important things I should be doing (outside of normal home closing process) to prepare for managing the rental property?

On another note, prices definitely have come down in far north Suburbs (Frisco/Prosper/McKinney north of Eldorado), even in really good school districts. That allowed me to get a pretty good price for the rental property (~$200K) but also makes me concerned about how much lower it could fall. 

Again I'm committed to buy-and-hold strategy, and the area should see strong appreciation over long-term given 1) Great schools 2) Rapid commercial development 3) Extension/expasion of highway 380 and DNT 4) Big companies moving HQ's more and more north (e.g. PGA, Dr. Pepper) but doesn't mean it's easy to ignore the near-term noise!

I had my offer on my first investment property accepted this week! Location is in far north Dallas suburbs (Frisco/Prosper/McKinney). Should throw off slightly positive cash flow if I self manage, and also banking on solid appreciation. I intend to hold for long term.

Any advice from others on the forum about key things I need to be doing?

I'm planning to  heavily leverage technology to handle marketing, applications, scheduling showings, collecting rent, etc. so would also appreciate property mgmt software recommendations.

Thank you in advance!

I've heard from multiple sources that Denton is a good area for investment properties in DFW area. 

My question is, for Denton is it better to focus on student housing (so houses/condos within walking distance to UNT or TWU) or for single family homes geared towards non-students or graduate student families?

Any other tips on Denton investment properties (especially for those with recent experience in that area) would be much appreciated!