All Forum Posts by: Amy Kendall

@Kate Batals I have bought a few new townhomes in Utah county that I use as rentals. I have found them to be good rentals that attract good tenants with low vacancies. Lately, I am preferring them over the single family homes that I have because the HOA does maintain the landscape and provides the insurance for the exterior of the building. Plus, you won't have to worry about replacing the roof in the future. I am in the process of doing a 1031 on one of my older properties and will most likely exchange it for a few new townhomes. Duplexes are also attractive, but most of them are older and may be in need of repairs. There are some newer multifamily in our area, and depending on how much you want to invest, they could be an option as well.

@Austen Sweeten Option 2 is the only one that gets you into the investment game, unless you would buy a multi-family property with option 1 and move into it.  I have seen a lot of people that want to invest in real estate but seem to always kick the can down the road thinking they will be in a better spot later.  You have no other debt and seem to be in a good place to get started, so whatever you do, take this opportunity to get started.  House hacking is a great idea.  You could also rent it out, then buy a home with a basement apartment and rent that out to continue saving money.  Just find a good strategy to end up with a good rental in the end.

Is that a turnkey home provider?  If so, you can find a turnkey provider in just about any market that you are looking for.  Although not a turnkey provider themselves, Norada, could put you in contact with providers in any market throughout the country.  Good luck!

@Rosemary Novak.  I think all of those things you mentioned are great to understand about the area.  I also like to contact a few property managers in the area and ask about rental rates, tenant expectations, trends, vacancies, etc.  They can offer a wealth of knowledge that you might not get by just looking at data of the area.  If they say you can hit all the numbers you are looking for out of your property, then that gives me confidence to continue.

@Thomas Smith the 1% rule is a good guideline, but it doesn't work in every market.  Some investors don't even get out of bed if it doesn't meet the 2% rule.  You will get a lot of differing opinions on the subject.  Personally, if this property was located in my market and wasn't a total dump, I would definitely pursue it further.  Good luck!

If you make a good investment that cash flows well and you don't plan on selling it during a recession, you will be protected. Have a good amount of reserves for unplanned circumstances and invest in whatever makes sense for you.  Perhaps a house hack would be a good starting point for you.

I'm not a tax expert by any means, but when I talked about this subject with my own loan officer, he said that would add the depreciation back in because it was not a true loss. So, I assumed that meant that it was not counting against me. Other than that, I am not very aggressive about writing off every single expense on my rentals because I do want to show that they are profitable on my taxes so that I can keep getting loans in the future. Your HELOC payment will count against you on future loans. If you could fund the deal a different way, you could refinance your rental instead. This would give you a lower monthly payment and lower your debt ratio while also increasing your cash flow. Maybe you could even cash out a little in the refinance and still accomplish it.

Look for a real estate agent that also invests in your area.  Tell them what you are looking for and the criteria you want.  Are you planning on fixing up a property?  Are you going to manage it yourself?  If you aren't planning on rehabbing the project or managing it yourself, a good property management company can help you with finding good contractors as you do along.

You don't have to put 20% down on another investment property if you move into that property.  But that would mean you would have to rent out or sell the house you are living in now, and I'm not sure if that home makes sense as a rental.  Talk with your bank, but they usually count 75% of your rental income against that debt.  So, a good rental will not count against you in qualifying for another loan.