All Forum Posts by: Carmen Dettloff

Resort towns have had an explosion in prices! That being said vacation bookings are higher and rental rates are increasing. Personally, I am not sure the increase in rental rates justifies the increase in house prices. 

Hi @Andriy Likhman 

If you are looking to invest out of state, right now it is really important to consider eviction legislation in that area (so I would avoid the west coast for that reason). In addition, you need a team you can trust to pick properties and manage them for you. You need to ask yourself how often you can stop by to see your property? And are you looking for a turnkey property? Or do you want something that needs work? If it needs rehab, who will manage it. If you are looking at SFR, I would plan on visiting it at a min. once a year (although with video and ability to FaceTime this need is decreasing). Ask yourself where you can get to--is there a direct flight, how long is the drive, etc. How much are you willing to travel?

I assume based on your budget that you are looking a SFR. I would compare deals across your top couple markets and weigh out the potential gains vs. market desirability.

Investing out of state for the first time is terrifying. But it gets easier as you grow your team and increase your experience!

Good luck, 

Carmen Dettloff

@Thomas Santos,

I think you have to look at your total return. If you sell for $460k and you have to pay $15k in renovation to get it market ready, and you have to pay 6% commission. Then you will walk about with 417k. I am not sure what state you are in, but you might have excise tax on top of all the other fees.Then you have got subtract out what you owe. So 417k - 285k = 132k. Are you planning a 1031 exchange? If not, then you have to pay taxes on the sale.

Then ask yourself what you are going to put that money and what return you get. Let's say you get 8% COC and 18% IRR on new deal. And see how that compares with what you are getting now. I don't know exactly what you are getting now. If you provide more information I can run specific numbers (you can also PM me).

Can you do a cash-out refi? Or a HELOC? And then use those proceeds to reinvest?

Best of luck!

Carmen

Hi @Account Closed,

Your current rent, new rents, occupancy, rehab budget, etc should all be included in your analysis. Most analyzers include these inputs. If you are looking at 2-4 units the calculations are a little different because you are more subject to market values and your loan/appraised value will be related more towards similar properties nearby that have sold recently. 

Good luck!

Carmen Dettloff

@Isaac El It totally depends on if there are any rent controls or regulations in that area. Let's assume that there is not, then you have a couple choices. You can raise the rents to market rate, but then none of the tenants will likely stick around. You can raise by a couple hundred bucks and see how many stay. It just depends on what you are trying to do with the property. If you can afford the vacancy, I would raise the rents close to market, let tenants vacate, refresh the units and rent at full market rate. 

Good luck, 

Carmen Dettloff
 

@Marc Cohen With a syndication your money is tied up for 3-10 years (depending on what you are looking at). But most likely if you invested on your own you would have your money tied up for 3-10 years well. You can find a syndication that meets your timeline. 

I like some of midwest and most of southeast, because they are landlord friendly. 

I agree with other commentators that you need to vet your syndicator carefully as you are stuck with them for 3-10 years. You want to look at past success and ask for investor referrals. You can find them on Bigger Pockets or on podcasts, etc. 

Hi @Account Closed,

When I got started wholesaling I just listened to the podcast "Flip to Freedom". I didn't pay for a mentorship. All the information you need is provided for free. I am sure the mentorship would help. But I was able to wholesale deals just with the free information provided. I am sure there are other podcasts that would also help. 

Good luck!

Carmen Dettloff

Hi Marc, 

It totally depends on your goals. I would stay out of investing in California! Between the population migration out of California plus the political climate being unfriendly to landlords, California isn't very appealing. 

Personally I'd invest for cash flow because appreciation is hopefully but not guaranteed. Additionally I would invest in MFR over SFR. You lower your risk level by increasing your unit number. And I would invest in several syndications (unless you have the time to manage something yourself) so you can spread out your investment over several cities and states. Then you are diverse in areas invested and lower your risk. You could even invest some in storage unit syndications to diversify as much as possible.

Good luck and happy investing! 
Carmen

@Jose B Mendoza Things I would check: 

1. Get an insurance quote

2. Factor in closing costs and repairs in your initial investment. This will help you figure out your true ROI.

3. Can you get a loan for 3-plex that is non-owner occupied for only 10% down? If so, that is great. But I would check with a lender. 

4. Ask yourself if you think $500/mo. covers the risk of owning three units. There is a risk major unforeseen repair, do you think you this cashflow justifies this risk. As long as you can answer that question with a yes, go for it. 

Good luck, 

Carmen Dettloff

Hi Peter! It would take 250 months (~20 years) to get your 25k back. Alternately that is a 4.8% annual return on your money. Plus you don't have another property that is appreciating. I am sure you could find something with a better return on your investment. 

Good luck, 
Carmen Dettloff