All Forum Posts by: Bradley Buxton

@Jordan Brown

I used to live on the central coast (SLO) and there might still be some areas you can get a bungalow. Talk with a lender about your options for a low down payment. A conventional loan will have PMI below 20% generally and FHA you pay a "PMI" for the life of the loan. Look at different options for 3% down and you might be able to find something in Goleta or maybe even Ventura. Also, take a look at a condo if you really want to be in SB proper, it might be a way to get started, and calculate the insurance and maintenance that an HOA would pay

@Robert Mitchell

One basic structure is that you enter into a contract with an agreed purchase price and timeline to make the purchase. The payments are generally more than your rent with the extra amounts going to the down payment. After a set amount of time, you get the choice to complete the transaction (buy the house) at the agreed price or not buy the house and the owner keeps the extra amount of the rent payments.  Talk with the owner and a lawyer on how the specifics of a deal are structured. 

@Scott Lorence

The advantages to renting to college students are that they generally leave after a few years so you can do repairs or updates, you can raise rents on a regular schedule, they will pay a premium to be near campus, and if you get engineering students they tend to fix the small stuff on their own. Higher deposits might be an option to cover more damage. You can have good an bad tenants with any demographic.  

@Srini Rajamani

It's never too late to get started and from your previous experience, you can avoid those same disasters in the future.  Keeping a W2 for a while will make it possible to get loans and use leverage to invest. The idea of replacing your w2 is admirable and can be done. Generally, real estate wealth is built through appreciation and tax deferment. There are many threads on here about cash flow vs appreciation. Everyone's situation is different and keep your eyes on the prize and you hit those goals. 

@Alev G.

Analyzing deals can be the most stressful part because of the assumptions that have to be made and there are so many unknowns that can change a deal from good to disaster.  If you're looking for local data in northern NV check out Address Income there is a rental map with hyper-local rents to use for your underwriting. Happy to share other references and resources in the area. 

@Alev G.

I'm in the market in Reno, Sparks, and Tahoe and I have seen some very strong appreciation over the last year. The new manufacturing out at Tesla and the new lithium battery factories will continue to put upward pressure on prices and increase competition.  Although the cost is high for these areas there is little new construction. We are still seeing Reno as the place to be right now and Sparks is also getting more expensive. 

@Anton Kharcheuka

Is your question do you sell or continue to rent out the rooms? Will the property not break even renting out all the rooms? You might be able to do a 1031 exchange into a duplex or other multi-unit that will break even or appreciate faster. It appears it's an income-producing property for investment. As @Dan H. has stated building and ADU can take a while to pay off and could affect the appreciation on the exit sale without a garage which could limit your sales to another investor.

@Mayank Jain

It will depend on your risk tolerance and what is most important to the seller. There are other ways to get your offer accepted that can be appealing to the buyers like non-refundable deposits, higher deposit amounts, shorter timelines and others. With a condo it might be less risky because of HOA maintaining the major capital expenditures. Have you put in offer with contingencies and lost out? That would be a first step.

@Dexter Florendo Kalai Aspacio

Buy in the right location where people want to live and rents will continually increase. Look for properties with value-add opportunities that don't cost much money. For example, can you add a door to a family room. 
Think about your market and what people are willing to pay a premium for. For example in Reno, NV there are many homes with walkout basement areas that can be made into separate studio apartments that will get more rent than just the room in the house.

Also think about where you can cut costs, can you self manage, find a less expensive property manager, can you bill back expenses to your tenants. Install landscaping that super low maintenance and reduces water usage and looks nice.

Turnover and vacancy will kill your ROI along with capital expenditures, regular maintenance is important.