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All Forum Posts by: Bonnie Low

Bonnie Low has started 23 posts and replied 1893 times.

Post: Rental Feedback and Area Feedback

Bonnie Low
Pro Member
#1 Medium-Term Rentals Contributor
Posted
  • Investor
  • Asheville, NC
  • Posts 1,924
  • Votes 1,756

Thanks so much @Cherie Ganesh! This is really insightful. I've heard similar about Memphis - it can change dramatically even within the same block. Really must have boots on the ground who knows the area from what I can tell. 

Post: Rental Feedback and Area Feedback

Bonnie Low
Pro Member
#1 Medium-Term Rentals Contributor
Posted
  • Investor
  • Asheville, NC
  • Posts 1,924
  • Votes 1,756

@Cherie Ganesh - have you ever used the Neighborhood filter on Realtor.com? You can overlay the crime rate, noise, flooding and some other filters over the neighborhood you're looking at to see how it ranks. I'm wondering how accurate that is because I'm using it to look at places I'm not familiar with. It would take someone who really knows the neighborhoods, like yourself, to be able to gauge the accuracy so I'm just wondering if you've ever used it before?

Post: Experience With Wholesalers

Bonnie Low
Pro Member
#1 Medium-Term Rentals Contributor
Posted
  • Investor
  • Asheville, NC
  • Posts 1,924
  • Votes 1,756
Hit and miss. Go to your local REIA and see which wholesalers show up there. Ask other investors at the REIA who they've had success with and who they haven't.

Post: Cash out Refi and reinvestment help!

Bonnie Low
Pro Member
#1 Medium-Term Rentals Contributor
Posted
  • Investor
  • Asheville, NC
  • Posts 1,924
  • Votes 1,756
Interest rates are at historic lows, but they're going up. I would use this opportunity to re-fi at the very least to get you into a lower interest rate while you still can. If you're thinking you're going to want to pick up an additional property in the next year or so and don't otherwise have the cash on hand for a down payment or to pay cash for a deal, it could be a good time to do a cash out re-fi so you have that cash available when you need it. Given the market uncertainty, though, I would be wary of increasing my monthly mortgage too much (which can happen with a cash out re-fi because you're essentially borrowing more) since it sounds like your renters are just barely covering the existing mortgage. You may not be able to count on rents going up to keep pace with your new mortgage payment. As for a HELOC, someone mentioned that you only pay on it if you use it and that's true. It's like having $ you can call on if you need it and the time to establish it is when the value of your property is still high and you have equity. If values drop, so does your equity so the amount you can use can diminish. Also, if you're thinking about getting it but not using it unless you want to  or need to, double check whether there's a period of inactivity after which the lender will close a HELOC loan. 

Post: Payoff a Vehicle or buy another rental!?

Bonnie Low
Pro Member
#1 Medium-Term Rentals Contributor
Posted
  • Investor
  • Asheville, NC
  • Posts 1,924
  • Votes 1,756

Buy another rental. The rental is an asset and presumably will appreciate whereas the car is only going to depreciate. The rental gives you write offs. The car payment is relatively low and so is your interest rate on it so let that ride (pardon the pun) leveraging the bank's money you borrowed for the car loan and put your $ to work for you in another rental.

Post: what do you hate about wholesalers?

Bonnie Low
Pro Member
#1 Medium-Term Rentals Contributor
Posted
  • Investor
  • Asheville, NC
  • Posts 1,924
  • Votes 1,756
I actually really, really appreciate wholesalers. They basically do the work I don't want to do. I don't have the time or the desire to search out off market deals and I know the successful wholesalers invest quite a lot into developing the personal relationships it often takes to get their foot in the door with a potential seller. Since we invest both locally and out of state, one of the first relationships we seek to establish when looking OOS is to find a good wholesaler who knows the market and can be the boots on the ground.

Post: Looking at my first potential project this weekend!

Bonnie Low
Pro Member
#1 Medium-Term Rentals Contributor
Posted
  • Investor
  • Asheville, NC
  • Posts 1,924
  • Votes 1,756

It's tempting to want to bring a GC with you, but if this is your first I wouldn't recommend it. I know that almost sounds backwards, because you want someone with expertise. But the thing is, you're likely going to have to look at a lot of deals - a LOT - before you find one that works. And it's not feasible to take your GC to all of them. Unless your brother or best friend is a GC and is willing to just do it out of the goodness of their own heart or because they want to partner with you, you'll probably burn them out. It can also take quite a bit of time to walk your site. We always do a quick walk through to decide if there are any obvious deal killers. If we decide we're interested, then we take measurements on that same trip so we know how to estimate material costs like flooring, new roof, drywall, etc. It's very important to measure the sq. ftg of each room - you won't get that detail off the MLS and what's listed on the MLS is often inaccurate anyway. So bring a tape measure and write it down! Also, count windows and doors - those costs really add up and they almost always need to be replaced. Look at the roof. If it needs to be replaced try to see if there's one layer or two - older homes almost always have two layers and this is important because it adds to your demo costs. Look at your big ticket items like HVAC, furnace, swamp cooler, water heater and garage doors. We always sketch out a layout of the house, too. And be sure to look in the attic to see if it needs insulation and check for leaks, basement for leaks and water infiltration and crawl space. Check out your utility panel to see if it's new or has to be replaced. Appliances can add up, too, but used appliances are usually ok for a rental whereas homebuyers expect new. These are the big ticket items that will help you decide if the numbers still work for you. If they do, then yes, get an inspector out there to look for any fatal flaws or things you can't just eyeball. You'll usually end up spending $150-$250 for an inspection but it's worth it so you know what you're working with. Then, if you still like it, I would get a contractor out there. Just for comparison, we easily looked at 50 houses before we got our first deal accepted so it was a lot of analysis, but we got better at it every time. Good luck!

Post: [Calc Review] Help me analyze this BRRRR

Bonnie Low
Pro Member
#1 Medium-Term Rentals Contributor
Posted
  • Investor
  • Asheville, NC
  • Posts 1,924
  • Votes 1,756

Hey, Kadeen - First, let me say I'm no expert on the BP calculators by any means - I've used them and also use my own system and they tend to come in pretty close. But I thought I'd mention the one thing that jumped out at me in your analysis is the estimated repair costs. As an experienced flipper, I can tell you the repair costs are always more than you expect they'll be. And as your house is a 1947 built home, you can expect there to possibly be some expensive repairs unless you're buying something in pretty good shape. Do you have experience estimating repair costs? If not, you might want to price some things out. Just as an example, a roof on a 1200 sq ft house here costs about $8-$10k. Windows on the same house are about $6k. Interior & exterior paint about $5k total. LVP flooring runs about $1.99 sq ft so about $2500 just for the flooring, not including labor to install. Tile for two bathroom floors, one tub surround and a kitchen backsplash = $3600. I just thought I'd share some costs from a recent remodel of ours to give you some idea of costs. These are CA costs so I don't know how they compare to where you're at, but we're in a cheap area of CA (near Redding). Also, beware knob and tube wiring in older homes. That can really add to the costs. You might not be required to update it - check with your local building dept to find out what code is - but you might want to anyway just for safety as a landlord. Hope this helps. Don't let it scare you - just do your homework. Good luck!

Post: Best cities for long distance real estate?

Bonnie Low
Pro Member
#1 Medium-Term Rentals Contributor
Posted
  • Investor
  • Asheville, NC
  • Posts 1,924
  • Votes 1,756

@Rachel Cutler I'm in a similar situation. CA investor - CA is too expensive for the most part. We previously held property in Pocatello ID but the metrics of that market are no longer making sense, either so we're looking to invest in other states. I've followed some of the posts here about investing in other states, hottest states to invest in, good cash flow markets, etc. It's tedious but you start to see some trends popping up and then I dig in deeper. For example, lots of cities in TN get mentioned over and over. Same with Indianapolis, Birmingham and many FL cities. So I go to City-data.com to get more specific demographics on income, housing prices, employers, growth, etc. Finally, when I find a city I like I look for local REI forums and start making connections to find people who really know the area. Hope this helps!

Post: I'm a Real Estate Investor, but my Degree is in...

Bonnie Low
Pro Member
#1 Medium-Term Rentals Contributor
Posted
  • Investor
  • Asheville, NC
  • Posts 1,924
  • Votes 1,756

What an interesting topic, @Yonah Weiss. I have a degree in Liberal Arts. I thought I'd go into teaching but never did. Still, it helped me get better paying jobs W2 jobs than I would have gotten without a degree. I accidentally landed in the environmental field and currently am VP of a non-profit working in the energy efficiency sector. I'd say my degree helped me earn the income to be an investor today and also led to various leadership positions which have helped me be a better project manager, which is essential when flipping and managing subcontractors. My youngest son started college last year. We were astounded at how much college tuition has increased! Frankly, I'm not sure it's worth it unless you are pursuing a career that absolutely requires a degree, like engineering, medicine, nursing, etc. Because of his University being shut down for COVID (Boise State) he's pushed pause on pursuing a college degree and we have no regrets about that. He would likely be close to $100,000 in student loan debt by the time he graduated and the interest being charged on student loans these days is downright criminal. He has a FT job at a grocery store and is learning how to become a Wholesaler. A college education is great if you're passionate about your field and a degree is a requirement for entry. But there are a lot of really smart people with and without degrees doing very well in RE and I would bet hardly any of them formally studied real estate in college.