All Forum Posts by: Andrew Freed

@Michael Whitman - All good questions, however I think you are missing some major due diligence and that has to do with checking with the city on this property. That means calling the inspection office to see if they have an open permits, if it is in fact a legal x unit, does it have any housing violations, has their been any police activity near the property, have any of the current tenants had an eviction on their record. These are some of the items in addition to what you listed that I would be interested in during the due diligence process. Lastly, don't forget to get estoppels when you close, that is the tenant signing off on the current rental amount / funds you have escrowed. 

@Matthew Platon - I think there are a lot of unforeseen factors that could affect my decision. Does the tenant pay for the utilities as of now and you are simply upgrading the system? What is the cost of an HVAC system vs. a heat pump vs. forced hot water vs. baseboard and what is the cost to the tenant? If I can get a heat pump done for $5K vs. a forced hot air system for $15K and its a LTR where the tenant is responsible for utilities, why wouldn't I go with the cheaper option? If you can get a heat pump and not have to upgrade your electrical panel or service to do this, that might be a cheaper option. Something to look into, nonetheless not enough info to give you a concrete response. 

@Antonio F. - Agreed, sounds like you don't have the time to properly vet candidates. I recommend hiring either a PM or even a listing agent who you pay a half a month to a month of rent to get the unit rented.

Just so you are aware, these tenants are your customers hence if you make the application process challenging and tedious at the very forefront of the process, most people don't got time for that. Look at you with your busy life lol. In the future, if you're a landlord, remember that these are your customers and try to approach your business from that perspective. 

@Tom Hall - The answer is simply a "No." Why would you pay down a 7% interest rate when you can utilize the extra payments towards actively investing in other opportunities that can provide a higher return, e.g. actively investing in real estate. It's not that challenging to get above a 10% return in real estate with all of the profit levers (cash flow, appreciation, mortgage paydown, tax benefits, leverage)?

@Taylor Cook - I'm very sorry to hear that. Nice of your to help step in and get your family affairs in order. I have a great bookkeeper that I use in the phillipines, very fairly priced and knows his stuff. Happy to share that contact with you if you would like. Feel free to DM me. Best of luck with your family members ordeal. 

@Cody Baum - Can you become an investor focused agent and get practice in real estate without it being your own money? Also, it could help you build your warchest to start investing. Seems like a low risk strategy for you to start taking action on your dreams, which is the crucial ingredient towards reaching FI. 

That is how I got started, I househacked a multifamily and became an investor focused agent. Started a meetup, househacked some more, started partnering then moved to syndications. It's a progression but the key is to take the smallest of incremental action each day and it will sum up to something incredible in years. Just my two cents. Good luck on your journey and I hope you provide the financial security you hope for to your daughters. 

@Rohan D. - The main question here is do you qualify as a real estate professional according to the tax code. If you do then you can utilize losses to offset your active income but if not, you are limited with how much depreciation you can utilize to offset your active income. Given that you have a W2, you most likely do not qualify as a real estate professional since it has to essentially be your main gig. 

If you wanted the REP designation in the future, you can have your signficant other qualify and that would allow you to qualify (e.g. a stay at home wife) or you can take a consulting role resulting in the real estate being your full time gig. Hope that helps! 

@Leo Gregoire - Sam Ahsan manages a STR company that operates around Massachusetts. He is a normal attendee at our meetup. I would touch base with him and get his insight.

@Jerry Zhang - What do units normally trade for in the area? If units trade for $30k on average and you are getting them for $45K you are overpaying. Figure out what a good price per unit is relative to the area and that will give you insight into if its a good deal or not. Additionally, is there increasing population or decreating population. Properties in growing areas with increased rental demand are definitely more desirable. Good luck with bringing the deal to the finish line! 

@Dozar Real - I agree, a unit like this will not rent for the price of the additional bedroom. However with that said, can you take square footage from somewhere else to create a hallway or create another entrance into the bedroom? If so, you might be able to make a unit which functionally does not make sense into a normal 2 or 3 bedroom unit. With some creativity and some carpentry work (usually not that expensive), you can create value by turning a non-optimal unit into one that maximizes the square footage. I hope this helps!