All Forum Posts by: Andrew Freed

@Jonathan Bombaci Can't wait! 

@Joshua Smith - The biggest lessoned I learned is, it's expensive to own real estate. It is imperitive to budget for the phantom expenses such as capex, repair, maintanence, and property management (even if you are self managing). These are real costs that hit your bottom line whether you like it or not.

The biggest mistake I see from new investors is taking the revenue and minusing the mortgage payment and calling that cash flow. If you don't accurately budget for these phantom expenses, you could be thinking your getting a cash flowing asset but in reality, you are getting a property that cost you money each month due to  these unaccounted for phantom expenses. 

@Dante Ritchey - Yes it is happening tonight. 

@Joe Garretson - Wow sounds like you found a rockstar team. It really makes the difference.  

What sort of rents and returns will you get for this property? Will it be a LTR, MTR or STR? I'd love to hear more about how you plan on maximizing this investment.

@Justin Goodin - You are missing a critical piece of information, proforma rents or market rents. When I underwrite a property, as long as the tenant base in month to month, I look at the purchase price vs. the proforma or market rent for a quick indicator if the deal makes sense before underwriting further. For instance, I like the proforma rents to be at atleast the 1.2% rule vs. the purchase price. That is a quick 30 second calculation that will determine if this is worth underwriting further. 

@Michael Smythe - I disagree, it should be signed by both the tenant and the landlord. Honestly I hold more weight towards the tenant signing it because they are the ones you are collecting rent from post close. If I had to choose, I'd rather have the tenant sign it to ensure they follow through with the agreed upon rent in place during the transaction. 

Yes, the seller could exaggerate the rent and commit fraud but that still involves you having to seek legal repercussions which can get expensive. A lot of times it's not worth the legal expense to chase down the seller post close. 

@Jason Skinner - Good question! Regarding the rental amount, make sure the seller gets an estoppel from the tenant prior to closing where they sign off on their current rent and first/last/security amounts. 

Additionally, I use the "binder strategy" to negotiate higher rents with in-place tenants. Google Dion Talk Financial Freedom and you will have a play by play on how to complete this negoation. 

Personally, with in place tenants, I tend to keep the tenants in place, negotiate higher rents, and get a new lease signed, either month to month or a year lease depending on if the rent is at market or not. I normally don't have the in place tenant fill out a new application with a credit report and background check, but other landlords are may.

@Hey @Sun Zari, congrats on getting started. I have a few friends that have Airbnb's around Orlando. Based on my understanding, Orlando seems to be somewhat oversaturated in Airbnb based on talking with my friends who own a couple down there so just be prepared for that. 

Additionally, based on my discussions with them, themed Airbnb's around Orlando tend to be more popular. Think a Harry Potter house or a Star Wars inspired home. Just a few tips your way, nonetheless, feel free to DM me and I can provide the contact information to my buddies who own Airbnb's in Orlando so you can ask them more clarifying questions

@Nasir Smith - Have a local agent run some rented comparables in the area to get accurate rents. You can also check the HUD FY 24 housing assistant rents to see what you can get in the area. From my experience, these tend to be pretty close: https://www.huduser.gov/portal/datasets/fmr.html. Rentometer and the BP rent estimators are also decent tools. 

@Shaydon Childers - Congrats on getting started, the first property is always the hardest. Just to make you aware, flipping is a job. It is as non-passive as you get in real estate. The goal of real estate is to eventually have financial freedom and not have to "work." Switching out your W2 for an being a flipper is trading one job for another. 

The great thing about keeping a W2 or job is that you are loanable and can continue to house hack and buy investment properties from conventional lenders, which always provides the best debt hence increasing your return on the property. 

I'm not saying flipping isn't the right move for you, however be aware of the downside. You will be less loanable to banks, it is high risk/high reward, and you will most likely be working just as many hours if not more vs your W2. 

Personally, I decided to keep my W2 while expanding my real estate portfolio for the above reasons and it has been very fruitful.