All Forum Posts by: Benjamin Aaker

@Michael Plante No place to buy yet. I would plan to identify three properties for 1031. I'm continually looking for multifamily investments but willing to pay the tax and take advantage of the elevated housing prices going on right now. 

I think you'd have better response if you went to some local Real Estate meetups. Those guys will be investors who are eager to help out new investors. The agents are spending their time and money to do open houses and are there to sell that particular home. They might not have much time to answer your questions. Here are some to ask:

1. You know the 1% rule? What are rents in this city typically getting as a percentage of sale price?

2. Should I invest in single family, small multifamiliy, large multifamily, commercial, or something else?

3. Do you know a good banker, RE agent, accountant, insurance agent, contractor, handiman?

Hi Justin and welcome to BP! We are glad you are here. Nice work on taking the first stop and asking the question. You next need to educate yourself and network. Find meetups in your area and go to at least one a month. Grab some real estate books (you can get a million recommendations by asking the question) and I recommend to start with The Millionaire Real Estate Investor by Gary Keller. That is, unless you haven't already read Rich Dad Poor Dad by Kyosaki. There are a bunch of YouTube channels and Blogs out there to help you. Set some long term goals and work backward to set short term goals and stick with it. You don't need money to get started in real estate, just time, energy, and drive.

If you think the property is worth 150k, then you should talk to the bank and tell them exactly why. The bank is wanting a trusted opinion on the property value so they use a particular appraiser. They sometimes miss things and you can inform them. Sometimes the bank will let you speak with the appraiser. Be friendly and tell them why you think it is worth more. 

Using the 1% rule , it's 150k, quite a bit lower than the seller wants. The problem is that the seller is asking for retail prices and looking at comps for residential purchases. In this market, you won't be able to compete with that as an investor. A regular homeowner might think 220k is a great value. Get a tenant in there and you are suddenly underwater in this market. The only way it would work is if the rent is significantly lower than market rent. You should so some research, but we are talking about in increase of $700 in rent. That's probably not going to happen any time soon. 

Hi Jeff,
I'm concerned that the property won't cash flow. It looks like your plan is to put 20% down. You won't be living there, so you'll have to get a commercial loan. With a 20 year term at 4.5% you are looking at 1,200 a month in mortgage payments. Add to that $200 in taxes and $200 insurance you have $1,600 which breaks the bank.
You would be an out of state landlord, so local property management is a must. Budget 8% of the gross for this. Also budget 5% for repairs and 5% for capital expenditures.
The 1% rule is designed to give you a rule of thumb to estimate how these expenses will affect your investment. If you get to 1% you probably can break even. This project is 0.6%.
The seller is asking for retail prices for a rental property. You made an offer and they countered at asking. They don't want to deal so you should walk away. I know what you are thinking next: It works if I pay cash. Don't do it.

Hi Jeff,
I'm concerned that the property won't cash flow. It looks like your plan is to put 20% down. You won't be living there, so you'll have to get a commercial loan. With a 20 year term at 4.5% you are looking at 1,200 a month in mortgage payments. Add to that $200 in taxes and $200 insurance you have $1,600 which breaks the bank.
You would be an out of state landlord, so local property management is a must. Budget 8% of the gross for this. Also budget 5% for repairs and 5% for capital expenditures.
The 1% rule is designed to give you a rule of thumb to estimate how these expenses will affect your investment. If you get to 1% you probably can break even. This project is 0.6%.
The seller is asking for retail prices for a rental property. You made an offer and they countered at asking. They don't want to deal so you should walk away. I know what you are thinking next: It works if I pay cash. Don't do it.

Hi Mark and Tabitha. Welcome to Bigger Pockets. You've obviously taken the first step by getting on the site. Budget some time to reading each week, whether on this website or the excellent books already suggested to you. Go to at least one meetup a month if only just to meet people.

The next step is to set some long term goals for yourself. What will your life look like at age 65? 50? 40? and so on. Use those goals to work backward down to this year. Use that goal to figure out what you must do every week. Tell someone you trust your goals and ask them to keep you on track. 

@Scott Bottomley Great idea. Asking to raise the price by that 1% would be a great way to see her true colors. If this is really a matter of wanting to compensate her broker (it probably is) then she should have no problem splitting it with you.

Like a lot of AirBnb utilizers, I expect to have access to a washer and dryer without charge. I think this tiny extra fee translates to a huge headache in bad reviews.