All Forum Posts by: Bart H.

Is this your initial investment?  May I ask, how well do you know the neighborhood?  Are you proficient with working in a class c neighborhoods?  It looks like you are reasonably close to Fair Park if I am looking at the map correctly.  That's not an area I would pick unless I was a seasoned investor.  

A couple of things.  I think your water and trash is light.  And your property taxes are WAY light.  IF you buy for 200K, I think your taxes will be closer to $4,500-$5,000/year.

Is it separately metered?   IE do you have to pay for electric in the units?  if so, $100/M is going to be light.

I think you are a little light on repairs.  My guess is you will be $300-$400 per month in repairs for 4 units.  (if not more)

Can you really get a 3.8% loan on a 4 plex?  with only 3%-5% down?

I hate to be super negative, but I think you are a little low on the expenses.

I would suggest that if the realtor is worried about whether you have applied for a loan, they most likely haven't worked with investors.  I would reach out to the local forums in the areas you want to invest and see who the realtors are that are most active on the forums.  IMO those will be your best choice of who to work with.  

If needed, you could also look around and find a good mortgage broker in the area, and have them get you prequalified so you have an idea of what you could borrow.  That way the realtor knows what price properties to show you.

 Our best deals NEVER seem perfect ahead of time.

Imo the better way of looking at it, is what are your exit strategies if things don't work as planned.  And I think your best deals will be those that you make "perfect".  

Everyone can do the basic math, its a really competitive market right now, you almost have to find a property that you can turn into a deal.

Look everyone can luck out and have a deal fall into their laps, but the reality is today, deals are made, you a fixing something up, seeing something used in a different way than the average investor or whatever to make something a deal.

Our best deals in the past we have paid over asking and no one else saw what we saw in the property.

A couple of examples, one of our houses had terrible pictures, and we paid over asking.  $500/month in net renta and  $100K in appreciation since 2014.

Another house we had $200-210K in equity since late 2015, $1000/month in cash flow.  We put 20-30K into a 180K property, and have refinanced it to remove all of our initial investment.  Took a funky 3 bedroom house that rented for $1,400/m and turned it into a 4 bedroom house that is typically rented to med students for $2800/month.  Og and this house is sitting on a multi family lot with a view of downtown.....AND a LOT of major development in the area.  IE the lot could be redeveloped in the future for more upside.

If you ran the numbers $1,400/month rent on a house you paid $180K.  Not the greatest numbers.  it wasn't the "perfect investment".  We did things that MADE it the "perfect investment"

IMo that's the thing to look for, what can you do to force appreciation?

I think there will be a binary outcome depending on who has locked in long term financing and has no refinance risk vs those who have to refinance.

If rates are going up, you would think that rents would follow.  It seems to me the risk is needing to exit in the near term, not the long term returns if rates/inflation head higher.

Emily, there are several reasons to use an agent imo.

1) A good agent will keep on top of the deadlines, knows how to fill out the paperwork etc. 

2) a GREAT agent will know how to act when a deal goes bad.  I cant tell you how many times our agent has negotiated a better deal, found an error in an appraisal, helped us with negotiating the inspection process etc etc.  On an easy straight forward deal you might not need a realtor, but what happens if something odd comes up?  Investors are dealing with weird issues all of the time.  An agent navigates you thru those problems, and that's worth a LOT more than saving a couple percentage points on a deal.

3) If you get it out there that you are an investor, and do some deals with a realtor, when that realtor gets a deal, they will come to you. Just one deal can be worth a half dozen or more commissions.

I think when you ask the question about an agent, imo the real question is for a very small percentage you will close on more deals, have less hassle on easy closings and likely end up with more deals in the long run.

Ouch, better not have been 5720 Live oak!!!....yeah maybe I should have held onto it.  It was in about the best condition of any of the ones in that area.  (we looked at 20 or more of them over a 3-4 year period.)  When I talk about an area, there was a point in time where we knew that little area along Live Lak/Ross and over a little into SKillman as well or better than anyone.  We would look at every one of them that came on the market.

A lot of them got bulldozed and were replaced with condos, and those folks could pay more than we could/would.  And I havent seen mant duplex's coming up in that area any more.

Honestly I am glad we sold it.  It gave us some capital that let us do a couple of other things in terms of rehabs, and thats made us a LOT better investors imo. Plus taxes were going up a lot faster than rents.  Our margin got cut in half due to increases in property taxes.

 We had a duplex on Live Oak, right near Skillman.  It was a great location, bought it in 2013 over asking for 280, sold at 370, I think we brought 20K to the table. (or close to there), in 2016.  And we lived there a year, and leased it out the remaining time.

Its a great area, perfect for a house hack, I dont know that it will still cash flow, as a lot of them in the area were torn down for condos.

If its your first property, first time as a landlord, getting something that has an ok return is perfectly fine if you are going to house hack it for a couple of years.  Its your starter property, learn the ropes etc.

If its a set project, like tiling a bathroom,  I typically try to buy materials, if its a new vendor that I have no experience.  If its someone I work with regularly, I typically try to buy materials, but usually do whats the easiest.  Pay half or a third up front, and then the remaining at the end.

If its a bigger project, say a kitchen upgrade, or a flip.  We will try to buy the materials, and then do a series of draws.  (Usually every couple of weeks).  Keep even with paying for what work has been completed.  That way if you need to hire someone new you aren't out any money.

IMO go with a duplex. Over time it will go up in value. Condos really wont go up in price. My first property in Dallas was a condo, it just never went up in value, and I regret having not bought a duplex instead.

Since then my wife and I started with a house hack duplex and did very well.