All Forum Posts by: Brent Coombs

Eric, you wrote that you "assume that last number ($450/m) is based off getting a property for a steal".

Yep, and why not?  As an investor wannabe, you also should only want "steals"!

My point was:  Who decides that $191/m is not enough, but $200/m is enough?

Especially in markets where cash flowing deals are super-hard to find in the first place!

But yes, that does largely come back to ones interpretation of neighborhood desirability.

As I said - esoteric (which could just as easily have been rendered - subjective).

Good luck with your research.   You also can/should create new threads on BP.  Cheers...

Why only lessen your expected Rent/m to $700, if the median is only $650?

On the other hand, 24%/m for Maintenance/Capex seems a bit steep, even for that kind of neighborhood. (I think that the "repair costs...might be a lot more than you are expecting" comment by David above was meant to mean the initial repair costs - rather than $5k).

One more thing:  If you're going to knock back a 4-plex based on your best research leading you to believe you'd only be getting $191/m per Unit instead of your own randomly chosen must-be-$200+/m criteria, then I wonder how keen an investor you are to begin with?  Nonetheless, you are showing a lot of sense by asking your questions here, and taking into account such esoteric details like neighborhood grading.  But, how good will you be at betting what those gradings will be in 5-10 years time?  [ie.  What factors will influence the neighborhood either gentrifying - or being taken over by squatters?]  

Keep asking those good questions.  Good luck.  Cheers...
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@Jay Hinrichs, you wrote: "every year you have a section 8 inspection and every year the inspector dings you for stuff the tenant did".  Now I'm starting to get the picture.

You also wrote: "in some markets trying to get them to pay the co pay is like pulling teeth".

Now I'm getting more of the picture.  Thanks again.  

I'll mention those points to my friend.  Maybe he'll be glad he "had" a property in Youngstown, rather than pining for what he thinks might have been, if only his Property Manager had let "Section 8" folk Rent that home rather than more-or-less make him Sell it - which he (wisely) did.

[I think my friend may have been sucked in by 'Seminar Gurus' who say: "Section 8" makes buying property in America the same as finding endless pots of gold].  Cheers...

 Thanks Jay for that quick response.  But, my friend is of the belief that those tenants and "their kiddos" would be kicked off the "Section 8" Program if they abuse the Rent subsidy provided by the "Section 8" Program.

Not so?

Are you saying that the Program itself has no teeth, or, that those same "abusers" just know how to "abuse" the system too?

Seems to me that America itself can be judged by the effectiveness (or otherwise) of the "Section 8" Program!

Happy New Year; may 2022 be better...

Seems to me that many Landlords just don't want "Section 8" Tenants (not because their properties aren't up to scratch).  On the other hand, a friend of mine had a property in Youngstown that he wanted to rent out to "Section 8" Tenants, but his Property Manager disallowed such.

I'm posing this question for that friend: Just what is it that scares many Landlords/Property Managers from allowing "Section 8" Applications (seeing as there is supposed to be a heavy burden upon those Tenants to keep the property in good condition, while rent income is as-good-as assured)?...

@Michael Wetherby, even professional Flippers get it wrong sometimes, often then relying on their Lenders or their own deep pockets to keep them out of strife.  How assured are you of continuing Lender support if/when you misread the market?  

And/or, how deep are your pockets?

ie.  Perhaps, especially in 2021, flipping should be left to seasoned professionals?

Are you ready to fend off any perfect storm of increasing inventory (becoming a Buyers Market rather than Sellers) and Mortgage Rate rises - with no advance notice?

[But, when you see it happening, you'll also become aware that the warning signs were there all along!]  Good luck...

@Cordero Martin, what transpired last year after your post?  If the attached lot was used as part-security against the Reverse Mortgage, then that company has zero incentive to "release" any part of its lien, right?  (Which would have well been known by the Owner/Seller, and should have been known by you!)  Don't forget: Live and learn.  

Throughout all this, did you ever get a clear payout figure as at any particular date?  If not, why not?  The Owner/Seller must be able to find out those details. ie. How much equity is there left (reducing monthly)?  Hope you got out of it undamaged.  Cheers...

@Jacob Wiltshire, I'd never rent anywhere that didn't have a shower, and I'm not alone.  [In and out in under ten minutes - job done].  On the other hand, my Step-mom had her bathroom renovated to remove the tub in favor of a shower (because getting in and out had become problematic).

Nice long soaks in a bath could be deemed a must for many folk.  So yes, install a tub that is also designed to allow a wall shower with appropriate solid Screen to be attached, or at the very least install an overhead Rail with plastic Shower Curtain.  Good luck...

@Jillian S., [Disclaimer:  Not a Tax Accountant].  Seems to me you'd be "safer" if you buy each of them as your Primary in the first instance, one at a time.  Then move out after 2 years, selling before 5 years is fulfilled.  Otherwise, I can well see how "the other 3/5 of the gains would be taxable because I didn't live there" (from day one).

If you're thinking of buying multiple rentals in year one, guess how many will theoretically be able to avoid Capital Gains Tax after 5 years (if you only intend to live in one for the final 2 years)?  [Hint: One (and maybe not even that many)].  And for each 2 years that then goes by, guess how many years you haven't avoided CGT on the rest of them? [Hint: At least 2 years more, and counting].

Solution?  Buy ones in areas that don't increase in value!  And/or, keep them forever.  

Or, here's an idea: Just pay the CGT and be chuffed that you're doing your bit!  Cheers...

@Adriana Mendonca, are you sure you'd be allowed to sub-let?  The ones I've come across require the Buyer to be the one who lives there.  Also, the re-sale price tends to contractually decrease for years after purchase, never going up.  

ie.  Find out all their Rules before buying.  Good luck...