All Forum Posts by: Charles Brucato

Hey everyone. I bought my first property last June with the intention of living there for a year and then renting it out with a lease starting August 1st of this year. It was a conventional loan with the requirements that I move in within 2 months and live there for a year before I can do such. I have a couple of questions.

1. I have an LLC setup that I would like to transfer this property into. Am I able to do this right now or do I have to wait until I've lived there for 12 months? If not am I able to just do an umbrella policy for now?

2. Am I able to draft up a lease and get it signed right now or do I have to wait for the 12 months to be up?

3. I want to buy a 2nd property with another conventional primary or even an FHA as soon as possible. If I am able to get a lease signed right now on the current house for August 1st when am I able to get under contract on another property?

The reason for the strict timeline is that the property is in a college town and I need to get tenants in there by August 1st or else it looks like I'll be forced to live there for another year which isn't the end of the world.

Any help is appreciated, thank you!

Quote from @River Sava:

Hi Charles -

Congrats on your first property! Smart niche you are aiming for as well. I am with a private nationwide lender than focuses on investment properties. We specialize in DSCR loans for STRs and would love to connect to talk more about building your portfolio to increase cash flow.

Thank you I'd love to. I'm definitely interested in working with a DSCR lender however I'm not interested in short term rentals. If you do DSCRs on long term rentals I'd love to talk more.

Quote from @Martin Grizzanti:

I run the Upstate NY REI Group here in Rochester--join the facebook group!

 Thank you I’ll go check it out. If you ever want to connect or talk just hit me up I’m always interested in hearing how people got their start and scaled especially on the Rochester market.

Quote from @Nicholas Coulter:

@Charles Brucato Great first move! My wife and I built up to scale by separating the tenant rent into a completely different account while we live in our Househack. So we are paying our mortgage and saving the income to allow us to buy another property every year! After 2 I think youll be surprised at the time to scale.

 Thank you for the response. I appreciate the advice. I was planning on setting something up with a different account for the rental income and using it strictly to reinvest into the business.

Quote from @Sidney Duquette:

@Charles Brucato Congrats on your househacking deal! Sounds like you got a great deal during this crazy Rochester market. I'm actually from the Rochester area as well and just got my first duplex in early May of this year and am currently househacking the residence.

I'm not sure if you have looked into it, but being near the U of R, I am actually planning on buying another duplex to do Short Term Rentals (STR)s like Airbnb or VRBO near the University of Rochester in the next year or two.

On your next deal, if you're interested in purchasing in a similar area and potentially doing some short-term rentals, I'd be willing to see if we could partner up if not just networking to meet other real estate investors in the Rochester area. Another benefit I should mention is that with short term rentals, they usually cash flow much more than a single-family residence or long-term multi-family rentals and this would also allow you to scale faster.

Again, congrats on your househack and feel free to reach out if you're interested in networking and potentially partnering!

 Thank you very much! To be honest I’m not really interested in short term rentals at this time but I’m definitely interested in talking about potential deals and what not. Feel free to reach out any time.

Quote from @Heath Thomas Jr:

@Charles Brucatocongrats on your first deal! The first step is usually the hardest. Since it sounds like youre living in the property now and intend to stay local, student rentals can be a very profitable asset class. It just takes some more hands on work than your typical rental. A good tip I have heard is make sure you are not at the property when the students and their parents move in, otherwise they will find something to complain about and have you right there saying you will deal with it.

I think your thought process of house hacking your second deal next year probably makes the most sense (and mayyybe your third deal), but if you really want to speed up the process, you should make your goal to have that third/fourth one be purchased outright as an investment property to get the snowball rolling. Do whatever it takes to get as much cash in the meantime. Try to get some roommates to help reduce your monthly expenses. Possibly by the time youre ready for your third deal, you will have enough equity from your first deal to pull some out for your down payment.

Continually house hacking to acquire rentals is certainly a viable strategy, but if you want to leverage quicker, debt will be your friend, unless you can convince some family/friends to invest with you going forward.

Hey thank you for the response I really appreciate it. I do have 2 roommates on this deal that will help me out so that’s definitely a plus.

Hey everyone. Just bought my first property in Rochester NY. The plan is to rent it out in August of next year for the 2023-2024 school year. want to carve out a niche in the student housing market going forward.

Some details about the property:

Purchase price 91k, monthly payment with taxes/insurance is $770. 3 bedrooms 1 bath, 7 minute walk to the university of Rochester. Rents for students in the area are about $500-$600 a bedroom so I think the thing will cash flow pretty well at $1500(modest)-$1800 a month. I really think I can get 1800 a month ($1030 gross profit monthly) but worst case I'm looking at $1500 ($730 monthly). I know there's other costs associated with this but those are just rough numbers.

House is relatively strong structurally as a lot of the bigger things (roof, furnace, etc) are taken care of. It mainly just needed some work on the interior. Renovations are about halfway complete and estimate it will come out to about 15k total give or take (Paint, vinyl flooring, appliances, cabinets, etc). I bought the place with 5% down as owner occupied so I don't really have any equity on it right now although it did appraise for 100k in its beat up condition initially. Total with closing costs was about 13k so I'll have about 28k sunk into it. 

Now the problem is I do have some money tucked away and I project that I will be able to do this the exact same way again about a year from now but I definitely am looking for some advice on what your next step would be to scale/leverage if you were me going forward. I'm ok with going slowly and house hacking yearly but I am wondering if there's anything I can do to leverage quicker. I am not scared to take risks as I am still pretty young (24)

My ultimate goal is to have 10 of these by the time I'm 30 and then start paying off Principal 1 by 1 over the next few years (While still working my w2). Potentially get into something bigger after that but I'm trying to be realistic for now. I think once I get a few under my belt it will be a bit easier but the challenge is going to be getting the next 2 deals done. I am ok with the high turnover and potential risks of student rentals and know what I'm getting myself into as I was a pretty big partier in college myself lol.

Any help is appreciated. I always love hearing how other people got their start. Thank you!

Quote from @Jerryll Noorden:

Quote from @Charles Brucato:

I'm new to the game (Closing on my first property in June) so I don't have the experience of many on here but to me wholesaling seems like something that is pushed on and pursued by people trying to cut corners instead of just saving up $ and buying a property. It doesn't seem like a sustainable business model in any way, shape or form. I could see someone maybe getting into it here and there if the deal is handed to them on a silver platter but you could never convince me that this is an actual strategy to build wealth. It honestly just seems like the rise of social media has people scamming those who don't know any better into buying their courses and ebooks and wasting their time just like day traders and others.

 You admit you are new, and thus it is a safe assumption that you by no means are an expert on./. well anything yet... YET you start your  "new into this game with": "you could never convince me that this is an actual strategy to build wealth".

You are an empty vessel with absolutely no substance to base any conclusions on, yet you already go ahead and you can't be convinced of anything based on that limiting mindset you have currently as a noob.

Way to go dude! 

Look man...

Wholesaling is a strategy. It is a solid one. Not because 90% of the people attempting that strategy do it wrong, can you conclude that the strategy is wrong right?

AGAIN, and I am honestly tired of dealing with sheer stupidity.. but again...

Not because guns are the leading cause of death in a city, does it mean guns are bad right?

Guns also protect people and save lives. A gun in the wrong hands makes a bad situation.. doesn't mean a gun is bad.

Answer me this though.. you REALLY do not have to be smart to see this, yet YOU and so many others simply are so DENSE you still can't see it.

AGAIN:

WHOLESALING IS A STRATEGY! WHOLESALING IS NOT "BAD PEOPLE THAT SCAM OTHERS"

It is absolutely astounding to me.

I also realize it is pointless to keep on fighting this fight.

Stupid is as stupid does... I guess.

So to each their own

Don't like wholesaling .. don't do it. Just don't advise others (wrongfully) not to do it because YOU simply suck  at it!

Deal?

Do we all have a deal? So just do it, don't do it.. who cares!

Go sell your bs to someone else. I graduated college 5 months ago so yeah it is my first deal. Also not sure why you need to get so defensive at something that wasn’t specifically directed at you. I’ve seen how generational wealth is achieved and it sure as hell isnt through wholesaling houses. Seems like that’s what you do and you’re awfully mad at the world and need the validation of internet strangers so yeah that lifestyle is not for me. Good luck.

I'm new to the game (Closing on my first property in June) so I don't have the experience of many on here but to me wholesaling seems like something that is pushed on and pursued by people trying to cut corners instead of just saving up $ and buying a property. It doesn't seem like a sustainable business model in any way, shape or form. I could see someone maybe getting into it here and there if the deal is handed to them on a silver platter but you could never convince me that this is an actual strategy to build wealth. It honestly just seems like the rise of social media has people scamming those who don't know any better into buying their courses and ebooks and wasting their time just like day traders and others.

Hello everyone. I am a young investor from Rochester, NY and currently under contract on my first property and throughout the home buying process this has been a question that I have been wondering. Obviously this is market specific, but in my county (Monroe) property taxes are ridiculously high (Over 3%) I have reason to believe that there are a lot of people out there (specifically young couples) who are overpaying for primary residences. For example, one house I checked out the property taxes were $1700 as it was a flip and was sold super cheap previously. They paid over 200 grand for the house and when they get reassessed taxes are likely to be over $500 a month. Thier monthly payment could end up being $400 a month more than they projected upon closing when they get reassessed and we have to assume the following:

1. This is definitely a primary residence NOT an investment property. The numbers would not make sense whatsoever if this was bought as a rental.

2. The average first time home buyer is not really paying attention to this. They see the monthly payment when they close, project they can afford it, and don't realize that it could go up in the future.

3. They could be potentially overextending their means with the monthly payment they currently are at. $400 a month extra could sink them. I'm not saying they are in this specific example because I do not know the buyers, but I'm sure there are many situations out there similar to what I'm describing.

As I said this is market specific. But I could see it getting ugly in areas such as my own where tax rates are high and the prices of housing is skyrocketing. Let me know what you think. I think that this could get a lot of people in trouble and could cause a lot of people to sell in the near future. I'm new to this after all, but just something I've been wondering.