All Forum Posts by: Carlos Zappatos

I was reading a BiggerPockets book and Mr. Turner said when estimating expenses, you take the vacancy rate and apply it to the rent price and include that as part of your monthly expenses. So if rent is $1000 and VR is 5%, you would factor in $50 as an expense each month. Is this just to prepare in case the property is vacant? Do you just put the estimated VR cost into an emergency fund for the time being? Should one increase rent to include this $50 (make rent $1050?) Or are you just “estimating” what vacancy would be but as long as the property is occupied there is no literal monetary value placed on a presupposed vacancy rate? I am very confused by this.

I was reading a BiggerPockets book and Mr. Turner said when estimating expenses, you take the vacancy rate and apply it to the rent price and include that as part of your monthly expenses. So if rent is $1000 and VR is 5%, you would factor in $50 as an expense each month. Is this just to prepare in case the property is vacant? Do you just put the estimated VR cost into an emergency fund for the time being? Should one increase rent to include this $50 (make rent $1050?) Or are you just “estimating” what vacancy would be but as long as the property is occupied there is no literal monetary value placed on a presupposed vacancy rate? I am very confused by this.

What reason(s) might they have to buy their own house first?

Go to college, it’s not required to be a real estate investor but you will learn fundamental business concepts that will be invaluable for your future. Also, a business related degree will most definitely help you find a job which you can use to save money to invest in real estate. You may also want to get your real estate license as you can sell houses or at least learn while in school. 

So it can be sensible to live in the apt that I rent, and also own an investment property; assuming the math works, of course?

I currently rent and have never owned. I make very good money and have always wanted to put my money to work in real estate - single family homes and duplexes specifically. I have recently come across a single family home that I personally do not want to live in, but I think would be a fantastic investment property. I am considering a buy and hold strategy for this property, as I probably will for any investment in the foreseeable future. I would love to own my own home one day but feel now is not the time. However, I want to put my money to work and get started investing. What are some things I need to consider while currently renting? Is it extremely uncommon to rent/live in an apartment while owning a buy and hold property? I have also considered purchasing a duplex and living/renting one side, but for now, a single family home has caught my attention and I want to make sure if the numbers work, is there anything wrong with investing while currently living in an apt? 

Thank you for the response! When you suggest I see if I have any cash flow, are you referring to on the duplex assuming I rent out one side? As for a condo, how would I estimate cash flow of i wouldn't expect to rent it out for five+ years anyway? I've heard of the 50% and 2% Rules, however I'm not sure if that's a reliable enough way to estimate. 

Hello everyone, first post here. This is comething I have been thinking about for a few years now, and I would really appreciate some feedback and advice.

A little about myself and my financial situation: I am a 32 year old single male with a steady job. I make salary (68K/yr.) + Commission, which usually is gross 92-112K/yr. I have about 70K saved in the bank (excluding retirement). I have no debt and great credit.

I live in Louisiana and have rented for the past few years. My rent is $785/m and I live below my means. I enjoy saving money and have no problem continuing to live below my means, however home ownership is something I have wanted for awhile now. 

One thing that allures me just as much as owning my own home or property is real estate investing in general. Because of this, I have been strongly considering seeking out a duplex with the intent to purchase and rent one side out to a tenant. This appeals to me for the following reasons:

1. It allows me to invest in real estate and OWN my home, instead of renting.

2. It allows me to be a landlord, which I have always been interested in. My plan would be to live in one side and [hopefully] have a tenant rent the other side and cover my mortgage, and if/when I move out one day (presumably 5+ years), I will rent the other unit out as well. Thus I am not going into this with the idea of purchasing a duplex (or condo - see below) and selling it at a profit at any point in the near future (under five years). I look at any capital appreciation as a bonus, and plan to BUY and HOLD as long as I can (assuming the value doesn't appreciate to the point that it makes more sense to sell under certain circumstances; again, this cap. appreciation would be a bonus to me as being a landlord is something I do not mind doing).

I have also strongly considered purchasing a condo, which is ideal for me if I cannot find a duplex at a reasonable price and in an area that I want to live in/rent out. I know condo's are hard to sell, however I hope that since I plan to rent it out at some point this mitigates my risk. Is my rationale sound? At which point is it better to continue renting?

At this time in my life, since I have no wife/kids, I am not interested in purchasing a house. I feel the maintenance of owning a house plus the size of it relative to the cost just isn't for me at this time. In 5+ years, maybe. For me, a duplex is preferred with a condo being a close second. I am hoping you can take my financial situation into consideration and help advise when it may not be ideal to purchase a duplex or condo, when it would be ideal to rent instead, and anything else that may help this decision of mine. Ultimately my question is rent or own, in my particular situation. Why or why not? I want to make sure I have covered all my bases before I move onto the next step in my real estate search.

I am happy to be here and look forward to speaking with you all! Thank you!