All Forum Posts by: Andrew Powers

I understand where you're coming from, especially being new to this. But ultimately it's your job as the investor to make the deal happen. You are in ownership of all decisions and actions you take. Everyone in the process has different motivations and different ways of making decisions. It's your responsibility to take ownership of this deal because it's YOUR deal. Not your agent's or anyone else's.

This all may seem hard to take in, but waiting / depending on others is not going to get you far as you will be at the "mercy" of others. You will feel let down as you mentioned. This is a mindset shift. Write down what information you are lacking in an organized way, find the answers as best as you can (search online / ask specific questions about something you don't know), compare options, make a decision, and own it. If you're not ready or it's just a lot of new information to comprehend, that's OK! Take more time to gather information and think about it. Your struggle here shows there is personal growth to be had. Even if these deals don't work out, going through this process will make you even more ready to attack the next opportunity you find! 

Hello have you calculated these properties based on "hard" data (ie numbers)? What is cashflow, CoC?

Compare that to the more "soft" data. Type of tenant base, potential for rent and property value appreciation, ...

Compare that to what you are looking for. Location, how much work you are willing to put into a property, etc.

Both properties have pros and cons. Your goals, skills, etc will help dictate decision. Right it out in a comparison chart based on metrics that are important for investment and for you personally. 

For my first house hack, I had similar choices. Ideal location / needed work / high appreciation potential vs not ideal location / needed no work / ok appreciation. For my goals, skill set, and knowing that I would live there... I chose the former and I'm happy.

Do the homework to compare options objectively. If its still not super clear, sometimes it comes down to gut feeling. Good luck with your decision!

Yes there's many financing options, I suggest looking around the forums. You can do anything from getting bank loan, partnering, private loans, FHA 203k construction loan, etc. Once you start studying the options out there, you will have the tools to start putting together a plan!

Not sure what you mean by options or strategies, seems like you have a plan already. Just curious, how long will the lease period be? Are those at the base stationed there for short and or long periods of time? Maybe there is an option to do short term rental if theres a market for people visiting the base for short periods of time? 

Welcome to BP! Couple questions/ comments: 

- do tenants pay for all utilities in your area?

-i suggest adding in vacancy and property management allowances to be conservative. 

-how new is the house? Was it rehabbed with quality? Asking since cap ex and maintenance are both at 5%. I usually do more for older homes in my area of Michigan, even if remodeled since it seems most around me are lipstick on a pig!

-how did you calculate property tax? Make sure the number is not the tax the current owner pays... it gets recalculated in Michigan upon transfer of ownership based on what the town deems its "market value". Look into that and if not sure, you can ask me. Or to get rough number, compare taxes to recently sold homes in your area and scale the taxes up/down based on this property's value.

One of the primary advantages to BRRRR is the ability to buy under value and recycle as much cash as possible to use on the next deal. Buying a market value MLS rental leaves down payment / other costs in the deal and the potential to lose equity if the market turns.

What are your goals with this first purchase and future purchases? Are you OK with learning the ropes with a market-value deal that you leave more money in it, versus a BRRRR deal that could be more costly than expected at the rehab or refinance phase? There's risk with either path but it's about what risk you are willing to take.

@Account Closed I think that's a good idea to have a trusted friend or family member live in or close by the house and property manage. Owner occupy gets better rates as suggested. Just make sure you read the details of the loan and local property taxes, there may be a certain amount of time the owner occupant needs to be residing in the house. Not sure if it's actually enforced or the implications but something to consider!

I chose Cozy because of its features and personal information protection. Tenants can apply and have background/credit screening done without providing the PM/ realtor/ landlord their SSN (I don't want to deal with that and they don't want to give it away to unknown people). Also payments are direct deposit from their bank, through Cozy, to your bank. You don't have their bank info which again is nice not dealing with. It also has features for lease documentation, repair documentation, etc. Overall it's been a great PM platform but there are others too.

An online tool like this may not work for certain tenants that do not have $ in bank accounts, would not want to share their SSN on the internet, etc. Requiring tenant screening through a platform like Cozy weeds those type of tenants out, if you don't want to deal with cash, money orders, etc.

Congrats on the duplex!! Have you thought of when to increase the rent for the month-to-month tenant? Consider that winter is often more difficult to find tenants. Maybe it's best to wait until spring to raise rent, in case the tenant chooses to leave? 

Congrats on the property! That's awesome. Without seeing the property, my first instinct would be moving the first 2 items to last. The house work is your risk in the project (time, property alterations, money). 

-Time: you may find the house work takes way longer than expected and if you schedule runs over time, you can outsource the outside painting and landscape pretty easily if needed. 

-Property alterations: if you need to remove/ move walls, change the window sizes since they are weird, or something else.. that can affect the outside of the house. So paint work you would have done first now needs to be redone along with siding modification. 

-Money: unexpected costs can eat up the budget so if the house work costs more than expected and you need to reduce costs somehow.. then reducing landscape costs for example may be better for you than something inside the house.

.... But you may be trying to do the outside work before winter so that may change things!