All Forum Posts by: Anthony King

@Mj Schindler the good thing about dealcheck is you can click on the question mark near each metric and explore them all to figure out which ones mean more to your particular situation. I learned a lot at the beginning using these and going down google rabbit holes until I fully understood how to apply all different metrics.

Without numbers we're all guessing and our "must-haves" are specific to what we buy/own. If you're buying for appreciation in an expensive market and I tell you 15% CoC and $300/door are my minimums you'll never buy anything.

For me, in 2021, I have purchased SMF's (2-4 units) ranging between 100-200k purchase price in Ohio for cash flow, buy and hold, in top 3 school districts for the area. No fixer uppers. Bare minimum $100/door, but most are near or over $200/door, 12% CoC using conservative numbers and check it against the 50% rule just in case. All of my properties meet the 1% rule, but that isn't very useful. These are my recent LTR's. I also have 2 STR's in gulf coast markets that have completely different metrics and other SFH's in 4 different states. All of them serve a different purpose and have different metrics that matter to me. This is why you need to provide more info for anyone to give you a useful answer. Like anything in RE, it depends. It depends on your goals, your financial situation, your market, price range, number of doors, passive/active, etc.

@Nathan Simons you do not have to change your loan, refinance, or even notify them. You fulfilled your obligation and can keep the loan you have even if you rent out the home.

@Nathan Simons providing numbers would allow for better advice, without that this is all theoretical. With that said, if you're new to investing and being a landlord it might make sense to rent it out for up to 3 years to learn the ropes. You are correct about the capital gains tax that's why I said selling by year three so you lived there 2 of the last 5 years. In the meantime if it cash flows, continues to appreciate, and someone else pays down your existing mortgage then I say rent it out for a bit. I would really think on what your goals are and the best way to achieve them over the next 3 years if you do rent it out. Then sell and redeploy that money when you've narrowed your focus and developed a plan. You can always sell earlier if something comes up sooner.

@Jose Lopez Lucky for you this is a terrible deal otherwise someone woulda swiped it from you now that we all have the address. Serious errors in your calculations too which make this terrible deal, when done correctly, extraordinarily terrible.

@Qina Cai in addition to a pet deposit you can charge monthly pet rent of say, $50/pet. If you keep the deposit and get extra rents for a year or two you'll at least cover some of the damage that is more likely than not to happen. Only sure way to prevent pet damage is to not allow pets. Or, roll the dice and take the 1/1,000 odds that they have a very clean, lazy, and hairless dog with no nails or saliva.

@Fiona Dupin How did you determine this property was a good buy if you need a PM to tell you what rents are for the area? Are there tenants already in place? How familiar are you with the specific area within Tampa that you are purchasing? I ask all of this because it's a good idea to have your "core 4" in place BEFORE you start making offers. Hopefully you're using an investor-friendly REA and if they are, they should be able to give you no less than 3-5 recommendations for solid PM's. Also, be aware that your REA may lead you to believe this is a good investment and "it'll do great", but if you're out of state, have no experience, or likelihood of repeat business with them in the future....they may not have your best interest as an investor in mind. Since you already have an accepted offer I would hustle to talk to multiple PM's and get as much info about the property, the area, market rents, etc as you can to make sure this is a good buy. Consider that an interview for hire as well as an urgent due diligence period before you follow throughon this purchase. Maybe I'm misreading the situation altogether, but the fact that you're searching for a PM after you did an inspection on a property that is literally on the other side of the country leads me to believe you may be getting ahead of yourself. Best of luck.

@Sam Abraham What "correction" are you waiting for, or expecting? What data tells you that there will be a correction? I bought two duplexes, two triplexes, and a STR beach condo in two different markets this year and they all cash flow with over 12% CoC on the LTR's. Inventory is very low. Demand is very high. Inflation is high and interest rates are historically low. The millenial generation which is bigger than the baby boomer generation is entering homebuying age and they'll either continue to rent while they wait for a correction, or buy. If they wait, I'm happy to have them rent from me. If they buy, they drive demand and prices higher all while homebuilding lags behind. Without getting into the details this all tells me that REI will stay hot. There is no data suggesting that there will be a correction and if you sit on the sidelines for a few years you'll always be waiting and regretting not buying that duplex today for 200k that will be selling for over 300k 5 years from now.

Look for secondary markets in the midwest for cashflow or class A/B properties in lower tax, landlord friendly states with population growth, job/wage growth for appreciation. Find what strategy works for your situation and get started now. Don't wait! There are plenty of deals out there in the right market. There is no such thing as the state of "the" market, but rather many independent markets with deals to be had. Some good for BRRRR, others for buy and hold cash flow, flip, etc. Sounds like you're trying to fit a square peg in a round hole. If you're analyzing 50+ properties that don't work in your market, change markets, or change strategies.

@Michael E. Way too little information to provide any helpful advice.

@Hassan O. I grew up lower middle class in a loving family, joined the air national guard while still in high school for the college benefits, got my degree and became a pilot in the air national guard which has afforded me a lot of opportunities. Bought my first SFH in 2008 and relocated for a job in 2014 so I decided to rent that one out. I bought another SFH in 2015 and lived there until May of 2020 and then rented that one out. I had no idea what I was doing that whole time and got lucky with good long term tenants. I was always a saver so I had some money saved up and when I got married in 2019. We then sold my wife's house and made 100k profit. We combined our funds and bought several small multi-families and one STR this year. 2 duplexes, 2 triplexes, and the STR this year for a total of 13 doors. I plan to sell the first SFH for about 200k profit and tap into the significant equity I've accumulated in my second SFH in the spring and target a larger multi-family deal in 2022.

We've used leverage and money we've earned from our W-2's with no help from anyone else. I've studied this game and worked my butt off on top of my national guard and airline careers to get to this point and don't plan on slowing down any time soon. I can confidently say I started with nothing and got here on my own. I am very lucky that my wife and I share the same goals, but she trusts me to make it all happen. We had our first child in Aug 2020 and that's when my motivation began and it's become an obsession. We have another on the way due in Feb and they're my "why".

It can happen for anyone if you're committed. Start saving, start learning, and start hustling. There are no shortcuts and it's not easy, but it's definitely worth it.

Unless you plan on living there you'll need 25% down for a Fannie/Freddie loan. Plan on about $35k cash to close plus reserves. 5% vacancy, 10% mgmt, 5-10% each for maint and capex, plus any utilities, taxes, and insurance. CoC ROI and cash flow are pretty low. Not sure you'll find 2.5% interest on a non-owner occupied anymore either. Closer to 4% more than likely. Overall not a terrible deal in this market, but not particularly good.