All Forum Posts by: Bradley Buxton

@Jessica Medvec

Usually when a seller wants cash the property is not lendable. The condition is so bad the home is not worth the purchase price for collateral. Whether that is actually true can be debatable and the seller might not want to deal with complex lending situations. A "total reno" can mean it's all original and very outdated but livable or it can be an absolute disaster with foundation issues and sewer and water problems. Find out from the seller agent why they think it's cash only. 

@Kody Smith

Depending or your time, lifestyle, goals, and time to exit, the Reno, NV market is worth looking at. The influx of tech jobs, manufacturing, mining, and Californians there is a strong population and combined with limited to no multifamily new construction we expect a severe housing shortage. Last quarter the vacancy rate for apartments was below 3%. Low property taxes, no income tax and landlord friendly make it ideal for many CA investors.  

@Shaheen Ahmed

Investing in real estate with all cash ensures you receive cash flow. Not everyone can do that but with high interest rates more cash is needed. Also the 1% rule is about as good as the rule thumb and not based on current conditions or current data. There are excellent deals available this time of year, but the inflated prices of small multifamily properties can make finding a good deal challenging. Adjusting the purchase price, budget, and offers can help you reach the break-even point.

Many calculators overestimate cost assumptions or rental comps, which can be both beneficial and a hindrance. In the Reno market, we have access to hyper-localized and up-to-date rental data and local knowledge of different areas, providing a more accurate picture.

Remember, buying real estate is a liability until you sell it, at which point it becomes an asset. The best markets are where people want to live, like California. Despite the high prices, politics, and taxes, people still desire to live there. Changing your strategy can help you enter the market and succeed.

If you invest will all cash you will get cash flow. There are some great deals this time of year and the over inflation of small multifamily can be tough to get a deal. This is where adjusting the purchase price, budget, and offers can all help you get to the break even point. There are also many calculators out there that over estimate the cost assumptions or rent comps. This can be a good thing but it can also keep you from buying anything. I see this because here in the Reno market we have hyper localized and up to date rental data and local knowledge of different areas. Buying real estate is a liability until you sell it and then it becomes an assets. The best markets is where people want to live, example is CA. As much as people hate the prices, politics, taxes people still want to live there. Changing the strategy can help get in the game. 

@Carl Reza

The hardest part is taking the first step of knowing your goals and why you're investing, then doing a deal analysis with your market, assets, budgets, etc. There are lots of markets to choose from and something closer to home maybe NV or AZ will be easier to manage and view properties. Interview agents, lenders, and property managers. If possible as others have said, go to a couple of meet-ups in the area you want to invest in. There will always be a level of fear of failure and you will most likely experience some, mitigating that with diligence will keep you in a healthy state of paranoia. If there were no risk there would not be a reward of building wealth. Talking to a lender can be a good first step, less exciting than looking on Zillow but still very important. 

@Dan H.

It sounds like you have your answer if you should buy it as an investment or as a vacation home. If you like the the area and can afford the house it would be like buying a luxury or sports car. It will bring you joy and not a return on an investment. I'm in Northern Nevada and there are vast areas where you can get away in the mountains with a lower wildfire risk. Many people have homes they never rent and only keep for personal vacation. 

As for insurance I deal a lot with that here in Tahoe and western Reno. There are some insurers going back into CA because there is money to be made. There are tougher requirements to satisfy underwriters and there are actions to take to fortify your home that can lower insurance. Happy to share some resources for that. 

@Gordon Cuffe

Great story. I grew up not too far from there and that is a very typical house, maybe minus the cat. Heal fast and great job!

@Daniel Boucher

This is a tough question. No one wants to kick a senior citizen out on the street. On the other hand who ever buys the property will have to raise the rents. This is an issue in Reno, NV with many multifamily properties where an older owner has not raised the rent in years and their selling agent thinks the property is worth market value, it's not and there is usually lots of deferred maintenance. The current owners are putting the moral dilemma on the new owners and still want full market value. Depending on how much you need to raise the rents to market, the other updates in the building that are needed, how quickly you can rent to market rents will all drive your decision. If you have units to remodel and are updating you can offer the senior tenant to move to the nicer unit and raise the rent, you can incrementally raise the rent, or maybe you can rent the other two for above market to make of the cost of the senior rent. Regardless of what you do the senior will likely lose their low rent situation whether you buy the property or not. 

@Radhika S.

Chose a market that will fit your budget but also your lifestyle. There are inconveniences to investing out of state like traveling to see properties, meeting with contractors, checking work, checking the property condition. You can build a team and people do, it takes time, mistakes, and extra money. To reiterate what others have said you'll need a larger reserve fund to invest out of state when something goes wrong. If you can spend the extra time you'd spend managing your out of state team on a side hustle to save up more to buy something closer to CA that you can get to and from in a day, NV or AZ. You'll get a sense of time commitment to OOS investing and saving more for investments. 

@Sherry Tsai

Where are people going to be moving to in the future? Will Long Beach become the new hip beach town?  Will riverside continue to build keeping inventory steady and will people need to commute in traffic to get to work?  Where people want to live will drive rents, revenue, and appreciation.  Also it would be worthwhile to speak to a financial advisor on how to best diversify your portfolio and maybe you can even use your currents investments to get loans for real estate. 

@Kyle Luman

Keep in mind everyone's situation is different and while one investor in the short term is wanting less cash flow for tax reasons (presumably) your situation it might not make sense to break even or lose money. Talking with a good CPA can help you explore options on how to save on taxes. As others have said it's much easier to find a break even property in a a good area. The advantage to real estate is that you can compound equity using leverage.