All Forum Posts by: Blake Anderson

Right out of college we "rent hacked", which means we shared a rental with another couple. So we saved over 20k. right out of college during our first year of marriage (hardest 20k I have ever saved since I was in grad school and my husband was a brand new ensign in the navy :) )!

Instead of using that as our downpayment we did a 0% va loan. There is also USDA, 3.5% fha or 5% conventional. We bought a serious fixer upper. It was all cosmetic, so done ourself cheap but hired out expensive. Since we were new we had no idea the costs. The goal was to self fund with our salaries but just in case we had the back up.

After 6 months, we were very well off, my new job was going well so not only had that pot of funds not been touched it grew. So we turned 1 down payment into two rentals. 

We put as little into the houses, since we know we bought them below market (for what ever reason, short sale, slight fixer needed, etc). So we don't refinance we under finance. The houses always work in their current state for a rental. Than once they are fixed we have an amazing rental for little down.

Pure rental- is a rental that was never a personal property so having 20-25% down.

Self- Funded- meaning my husband and I don't have partners. No one else is on the loan or a partner. We use our assets and all the loop holes wisely but at the end of the game no one other than my husband or myself is on the title. 

Hi Blake, 

I completely agree with you.  I am a big fan of remodeling a property with higher-end materials such as granite countertops, stainless steel appliances, nice shower heads, goose-neck kitchen faucets, etc.  

If I were you I would speak with several different realtors in your area and find out how much more you can charge for rent on a high-end remodel.  You will be able to charge premium rent but NOT necessarily have to spend on all the bells and whistles such as crown molding, 42" cabinets (vs. 36") cabinets, real hardwood flooring (vs. engineered hardwood), porcelain tile (vs. ceramic tile), etc.  Once you reach a certain standard, then spending more to improve the property further just won't matter in terms of charging more for rent.  For example, granite prices can vary greatly from the less desirable types of granite that may just look okay (that you find in some hotels), to slightly more expensive for good looking granite, and extremely expensive for those really unique cuts that look incredible.   

If and when you do your rehabs/remodels, definitely reach out to the BP community with questions as to what exactly will give you the biggest bang for your buck.  

Jay

Welcome to Biggerpockets!

You found the place to be! You will find no better place to build a solid platform than bigger pockets. The one thing we all agree up on is that we invest in real estate. Beyond that everyone is different.

How much are you putting down on your duplex? We got started at 23 right out of my masters degree program. We put 0% down and than self funded the repairs (it was a foreclosure). Instead of using the downpayment we had saved, we used it as our oh-**** fund in case we ran into unforeseen problems. Once we were comfortable and knew it wasn't need 6 months later, it became the downpayment to our first "pure" rental.

We have a very specific business plan and we buy very specific houses. This allows us to meet our long term goals while self-managing and working full time. Our ultimate goal is to use our real estate cash flow to fund early retirement in 15 years. So we live frugally allow us to invest in real estate. Other people use wholesaling or flips to fund their rentals :)

I highly recommend you also check out- the blogs, forums and listen to the podcasts. If you see a post you enjoy check out the persons signature. As many of us have created resources around our niche (websites, blogs, etc) so checking out the signature is a great to get more information. Make sure you don't miss out on networking is by filling out your signature, profile and pming people with questions.

Look forward to seeing you around!  

Blake, maybe that is a bad term.  I mean catering to vets, felons, students, elderly, etc.  If there is a shortage of viable housing for any of these groups in your area, maybe remodeling old buildings to provide it could be a profitable and rewarding niche.

Hi Blake,

I have some experience rehabbing aging properties and remodeling.  When you improve a property, each decision you make will typically involve cost, quality, and durability.   For rental properties, definitely put an emphasis on durability. Certain materials have predictive life-spans and maintenance costs, so choosing the most durable materials with the lowest maintenance costs is best.   

Choose appliances that don't break down because although they may cost more initially, you will save in the long run by not having to replace or fix them.  Another example is flooring - choose flooring that lasts and is durable.  Hardwood floors last a lifetime, but tenants may not care about maintaining it.  Hardwood also warps if exposed to water for too long.  I recommend ceramic tiles because it looks nice, is cheap, resistant to water, and durable.  

No need to get the best flooring, cabinets, bathtub, sink, etc. Just buy what is durable, looks decent, and is affordable.  It may sound simple now, but when you are actually shopping for materials and doing a rehab, your mindset will be much different and you may unintentionally overpay for items because they look nice or underpay because materials are cheap but won't last. 

Hope that helps.

Jay

Blake, welcome to BiggerPockets!  Great that you are getting into real estate at such an early part of your career trajectory, and that you have some specific ideas of what you'd like to do.  In our town we have older downtown buildings where the first floor is retail and the other floors were converted into housing for veterans.  You may want to explore certain people groups that you could cater to, partnering with their support agencies, as a thought.  I'd like to live in one unit of a multi someday, so I'll be interested to hear of your experiences.  :)

@Blake Anderson 

welcome to the site.

@Blake Anderson

Welcome to the community! BP has a tremendous amount of information to help you, but it is only available if you seek it out. Be sure to be as active and engaging as possible. Read blogs, post questions, and the podcasts are gold! The best free education you can get. Good luck!