All Forum Posts by: Andrew Frowiss

Hi @Eric Dekker these are just my thoughts! 

Option 1 wouldn't be a bad option. Option 2 would be a great option if you have 4 plexes in your area that you can do this, or if you don't mind investing out of state. Of course you wouldn't be able to house hack the 4 plex if you were investing out of state. If you don't have 4 plexes in your area for a reasonable price consider looking into Killeen TX. You can find 4 plexes there for around $380K to $420K and it's still a cash flowing market with decent appreciation.

STR are great options, but if a recession were to hit, I imagine they would get affected by it. People still need to travel with work, but I figure people spend less on vacation related travel during times of scarcity.

Best of luck to you in all your endeavors! 

Hi @Joe Gilroy I would recommend looking into Killeen TX! Lots of 4 plexes and a cash flowing rental market. 

Hi @Mike Schorah I think it might help you, but not required. When I was wholesaling I don't think I ever got a deal because of the website I had. It's not something that came up when talking with Seller's about buying their home. If you had a landing page with some reviews from satisfied client's it could help you on getting internet leads for motivated Sellers, but I think the more important part of the equation is problem solving/deal closing. 

When you meet with motivated Sellers they usually have some sort of issue that is the reason why they are selling. A quick cash offer may just be what they need to deal with whatever they have going on, but I find that it's not always going to be a solution. Some Seller's would prefer to Seller finance the deal, or have you assume their loan.

These are just my thoughts!
 

Hi @Steve Williamitis I would recommend looking into strategies that require little to no cash out of pocket. I got my start wholesaling deals! You could talk to your landlord about using your apartment for Air bnb, but most landlords won't allow this. I know some landlords agree to stuff like this, but it takes the right person, and also would need to be agreed upon and included in your Lease. 

Go to Investor meet ups in your area and make friends with the people you meet. In my experience there are lots of Investors who have the cash for deals, but have issues finding deals. If you can get really good at finding motivated Sellers, then you can rinse and repeat this strategy. Either get paid up front to assign the contract to someone else to do the deal, or partner with them and see the deal through till the end.

Finding deals is hard, and getting them under contract is also difficult, but if you master these skills you can make good money and get experience in this industry. I started doing this at 20 and in my first 2 years flipped a house and wholesaled another 2 deals to partners of mine. 

If you find you are having a hard time getting the Sellers to agree on a price with you, you might want to consider bringing a partner with you. I would find motivated Sellers, and bring my business partners with me to help me close the deal. It's a great way to learn the process and get some experience.

Hi @Darcy Dawe great question! When you are analyzing your deals make sure to the best of your ability estimate your net equity position after 1, 3 and 5 years. This should help give you an idea of what you can do after closing to grow your portfolio (how long you need to wait until you have enough equity saved for your next purchase). 

Once you have your property purchased, and fast forward several years, you have enough saved up for your next purchase. Consider refinancing to pull out your equity and make your next purchase. If you do this you will pay capital gains, but if you wanted to avoid this you can 1031 your funds into a bigger property (hopefully one with multiple units).

I wish you the best of luck in all your deals!

Hi @Jack B. I would recommend trying to work out some sort of rent increase. Tenants don't want their rent to go up, but its going up everywhere. Present them with a number and see what they say. If it's too high for them then try to meet them somewhere in the middle. If they go anywhere else they will have to pay for moving expenses, so it's cheaper for them to stay in most cases. 

If they left and you had to find another Tenant just make sure to screen them really well up front :)

In my eyes if the Tenant has been there a long time and has a good payment history then I would try and keep him there. If you have a makeready you will have your own costs (vacancy included).

These are just my thoughts! I wish you the best of luck!

Hi @Stacy Wheeler when I was wholesaling back in the day I found the best way to find buyer's was going to Investing meet ups. I found lots of people there with the money and motivation to do a deal, but no deals on the horizon. Some regular Investor meetings have larger email groups where they ask each other for help, or pitch deals to find buyer's or partners. See if you can get on a list like this. Alternatively there is (or at least used to be) a section of Bigger Pockets where people can post deals they need partners on. You might want to look into that as well.

Hi @Isaiah Miller great questions! Look into the Killeen TX market. Purchase prices are cheaper out there, and you can get into small multi family with around $200K to $400K. Sometimes I see duplexes come on the market there for less that $100k but it's rare. For beginner investors it can be a great places to start. It's still a good cash flowing city with decent appreciation rates. You can also get into single family houses in the area for around $100K plus or minus.

Talk to a Lender about what loan products they have for Owner occupant multi family. I have some clients that are using FHA loans to owner occupy multi family properties so in this situation your down payment could be less than %25 which a lot of people are paying right now for conventional loans. The Lender would use the rent income you would be getting to help you qualify for the loan.

Hi @Alex L. these are just my thoughts. If I was in your situation I would probably 1031 your funds into a larger multi family property in your area or out of state (if your area isn't the best for this). Alternatively you could sell the property and buy a bunch of single family properties in a market with cash flow, decent appreciation, and lower purchase prices (I recommend Killeen TX as it checks all those boxes).

I prefer to scale. Either way make sure to run your numbers and make an informed decision. If you had several single family rentals then you would bank on the appreciation on all of them (and cash flow/loan pay down of course). That's my mindset anyway! 

Best of luck!

Hi @Adam Gonzalez great question! These are just my thoughts on the situation. When looking at deals and analyzing them, run the numbers and see what it would look like if you were to rent out the home to long term Tenants. If the numbers look good enough to you in both situations then you would have another strategy to use if you ever found yourself in a recession. Keep it until conditions improve and then go back to STR.

If you aren't comfortable with it then maybe you would want to wait and see what happens in the future. If you were to buy after the recession you could get some better prices.