All Forum Posts by: Andrew Freed

In this competitive market, I did not want to let the deal slip through my fingers. As a result, during the negotiation/inspection of my last property, I had the option of reducing the purchase price by $7,000 or get about $2,500 in fixes. To keep the bond strong with this seller, I decided not to reduce the price and allow the fixes to occur prior to closing. In hindsight, I would have bought the deal anyway and it was a fair price, but business in business. If I could have saved $7,000 and put it in my next deal, that would have been the better decision. There are always deals out there, don't get caught up in FOMO. 

@Michael Bruns - I own a condo that I currently rent out and make a few hundred a month. It was previously my primary residence that I converted to a rental. That is in the Boston market though, but Austin and the Boston market have similar industries. Regarding if its worth it, it could absolutely be worth it however you need to do your due diligence up front. Some of the questions you need to ask yourself are the following:

1. Is the HOA well run? Does it have decent reserves? If a large capital project needed to occur, could it cover it with its reserve or would it have to complete a special assessment?

2. Is the HOA landlord friendly? Some HOAs do not allow you to even rent. Review the condo docs prior to purchasing. Also when the threshold of renters vs landlord goes over a certain point, it restricts financing options hence lowers your buyer pool when you sell the place.

3. Do you want to become a Trustee? I became a trustee of my condo association and it helps in having an investor voice at the table. You know, gotta project your assets.

If you do your due diligence and the numbers work, I say go for it. Austin is a fantastic market and you can't go wrong with it in the long term. 

@Neil G. Never wait to be in real estate, get into real estate and wait. In my opinion, I think you should house hack in a nice market that you want to call you home (buy a 2-4 unit building) and deploy the remaining cash in large multi-families in better cash flowing markets such as Memphis or Colombus OH. You will be able to expand quicker if you use this strategy by keeping your expenses as low as possible while deploying your capital into quicker ROI properties.

@Sharise S. Woot woot, congratulations on taking action! With so little cash invested, I'm sure the cash on cash return is pretty good. What sort of rents do you get for this property? Is it turnkey? Does it require work? I'd love to learn more about your deal and offer guidance in anyway I can. 

@Stetson Giralmo - Congrats on getting started so young! Whatever market you choose, just make sure that the price point allows you to maintain decent reserves. You should have at least a year of reserves just in case issues arise, especially if this is your first property. With decent reserves, you can manage the level of risk dramatically. Real estate is all about the long game. 

I invest locally, but recently started putting in offers on some long distance properties. What are some of the most common headaches associated with being a landlord long distance? I'm all about managing expectations in life including my own so please help me understand what I am in for :)

@Kyle Kalish - I agree with a lot of the sentiment. If it is truly a fixer upper, I would find a good local contractor and offer to pay him $75-100 bucks to give you a rough estimate on properties prior to bidding. You can offer to walk through the property via facetime or take videos / pictures and send it to the contractor for review. You can even advise that you will seriously consider him or her for the renovation as well to increase their buy-in. At the end of the day, if you want good service and a strong relationship with contractors, you have to pay people what they are worth. The good ones out there have a ton of business and won't waste their time prospecting with investors constantly when there is a ton of work waiting for them. 

@Alex Silang Your most important partner is your deal finder or "agent". I'm not saying he won't do a good job, but you would definitely increase your odds by choosing an investor friendly real estate agent with a track record of success. I'm sure there is a ton in the Nevada area. At the end of the day, investing is just risk management so increase your odds any chance you get. 

 @Josh Borg That is a tough situation. First and foremost, work on increasing your credit limit on all of your credit lines but do not utilize any of the credit. The goal of this act is to lower your credit utilization rate to almost 0, which will increase your credit dramatically. Credit utilization rate is the largest contributing factor to credit. Also, work to eliminate any debt that you have on record. 

Regarding options, I agree with Carlos that you should try to connect with mom and pop investors via facebook market place or craiglist, see the place, explain your situation in person and "pull their heartstrings" and offer to pay double security to comfort any uneasiness. You can even offer a six month lease to show them your willing to lower the odds of needing to evict you. I think if you use this tactic and do it enough, you will find an empathetic soul out there that is willing to work with you and your daughter. Best of luck my friend. 

@Kristen Manke - This is awesome, congrats on making the best decision of your life. I am currently house hacking myself and have a piece of advice for you. I would recommend looking for a place with at least 3-4 bedrooms you can rent out. The more bedrooms you have / rent, the higher likelihood you will cash flow. For instance, if you house hack a duplex, you most likely are covering some of the bills out of pocket. For a 3-plex, you are barely cash flowing or breaking even. For a 4-plex, you are making a decent amount every month. This concept translates over to house hacking a SFH as well. If I were you, I would search for a 3 bedroom minimum or a 2 bedroom that you can add value to and add another bedroom. Best of luck!