All Forum Posts by: Brendan F. Nagle

North Iowa is beautiful this time of year. It's relatively landlord friendly and your down payment for expensive areas of the country might actually buy the whole property. Feel free to reach out if you have questions.

@Mamadou Ngom 

Hello, I am househacking in St. Paul. Feel free to reach out. Most of the pre steps are easy, get your ducks in a row. Having your financing in order will allow you to pull the trigger when the time is right. Have reserves with enough money to pay the full mortgage and expenses if your renter can't/won't pay. Be ready to learn some new skills, dealing with people is fun. Reach out to plumber, handyman, and electrician to have a team in place if things go awry. 

There are a lot of ways of househacking. whether its separate units, mother-in-law suite, renting by the room, or STR. Figure out the plan of what you are comfortable with and start checking the boxes accordingly. I found success with a mother-in-law suite, renters are signing a renewal soon.

I would reccomend @Kurt Pauley as a realtor. and @Tim Swierczek for any financing questions.

I did a nice laminate and an underlayment, thinking it waterproof and it looks better. Its cold... Go with carpet. warmer and quieter. 

Cash flow is not 310. Put some numbers in for Capex, vacancy and maintenance. Your renovation while not huge will takesome time. I still say do the deal but my caveats are simple. Your first rental is an education. You will make mistakes. Mistakes cost money, they are only bad if you don't learn from them.

I still own my first one, My mistakes are blaring red flags now but at the time it was a big deal. I didn't fire the first contractor fast enough. Good at rough work, crappy finish work. My partner and I poorly designed a bathroom. We gutted the house. We could have designed a bedroom bathroom and closet with the space. Instead we didn't. My wife still makes fun of it.

Think baseball, hit a single or double on this one. Do the work, learn new skills to make this deal profitable. The next one do it again or go bigger. Feel free to reach out. Good luck on your journey. 

I have had it go both ways. My first duplex we purchased empty but the former owners put tenants in to get one more  month of rent during closing. We should have kicked them out but didn't and both were terrible tenants. 

On a 6 plex I purchased last year, it came occupied and we have 100% occupancy for 8 months. It worked out better than expected. There was a person not on the lease that took months to get rid of but let's leave that alone.

Meet these tenants, interview them, and do a back ground check. You pay for the check, they live there already. If they meet your requirements, keep them. If not, send notice.

House hacking may solve both issues. Where to put the money, my house or the rental? House hacking its the same spot. Owner occupying financing will give you better interest rates. Try it for a year and a day. If it works, do it again. If it doesn't work, sell or refinance out and use the equity to find a home. 2-4 plex would be easiest and has most seperation but rent by the room and Airbnb could be an option as well. Good luck on your journey. 

Read, Learn, try to scout or bird-dog for a local investor. Reverse engineer your goal.

Big Portfolio- 100 doors (Your goal any # or $) > relationships needed to scale> 10 doors> skill sets needed to solve problems, math, fixing, negotiation, people skills> 1 Door> Down payment, relationship with Bank, Good credit> Learn skills so you can be successful on your first adventure in real estate.

Steps for a 15 year old. 

Paid or not you will learn valuable lessons.

1. Offer to clean a rental apt or house after a turn over.

2. Learn from a contractor. Follow your states' Labor laws.

3. Dress up and come to a networking event. Show you are serious.

4. Call an investor, ask to shadow a deal or have them teach you how they run numbers.

5. Learn local Housing law and code. Call or visit your local municipality for information.

Good luck on your journey. Happy to help any way I can.

If you are in the Midwest, I recommend Zenlordpro. I finally got my partner off the checkbook ledger accounting. They have videos of their services.

The 1% vacancy scares me. Go higher and see if your numbers still work. If the town has good numbers, ie growing and not a huge crime area, this looks like a good deal. Deal breakers on this, If small town and the only big employer in town closes or doesn't come back to full capacity, could be 40-50% vacancy. Make sure you get rent roles and interview the property manager. Do you have financing lined up. A small town or regional bank may be your only option. Might not get the best interest/terms now. 

Depending on your market, being too conservative will price you out of deals. Not being conservative enough will bite you in the #%*. On every property I look at the numbers several ways once they pass 'Will this work' test. I assume 10% vacancy, 5% Cap EX, 5% maintenance, and 6% management. Now each property is different. I assume if major Cap Ex items, plumbing, electrical, roof are new or newer Cap Ex and maintenance will be less.

I operate my rentals with assumptions on vacancy, Cap Ex and Maintenance. I self manage and do what maintenance I can do myself, but the rentals have to be profitable to my standard. If the only way I stay in the black is me fixing every problem, then it isn't a business its an expensive hobby. If one needs an expensive hobby, have kids play a sport/dance, buy a horse, or a dirt track race car. 

Now experience/luck has shown that treating tenants with respect but be firm with your lease leads to less turnover. Calling references helps too. Fixing problems before you put a tenant in the unit solves a lot of problems. Fixing things the right way the first time costs less than fixing it twice. (learned that the hard way)