All Forum Posts by: Chris John

I was just thinking about the plan going forward this morning.  I'm leaning towards trying to remain conservatively positioned for the reasons that @Jasmine H. mentioned, but if the market gets to the point where the combination of prices-rents-interest rates puts me in the position to comfortably cashflow properties with maybe a bit more down than usual (say 35-40% instead of the usual 25%), I'll probably start buying more actively again. 

My thought is that when interest rates do eventually come back down, those properties should go back up in value making a pretty nice equity increase.  Plus, honestly, sitting on cash isn't the greatest idea during inflationary periods and I'm really struggling with finding other investments opportunities that excite me.

I think there have been a lot of great insights on this thread, so thanks to everyone for sharing and for @Scott Trench for asking.

@Mike S imai

I'll be the contrarian, "DO IT!  DO IT!  DO IT!"

Just kidding... kinda.

I went on Craigslist to find rental comps for one of our first rentals about 12 years ago and saw that actual house listed for rent.  I reached out as a potential tenant and got the guy to go to a western union in Nigeria on three separate occasions to get my money before he finally figured out he was actually the one being scammed. 

He was on a Christian mission in Africa and needed someone to care for the house more than he needed the rent which explained why it was such a great deal.  As a great judge of character,  he was immediately able to discern via email that he could trust me.

Makes me sad what people are willing to do to each other for a few hundred bucks. 

:(

@Account Closed

Your realtor should be helping you to establish a value if you can't get an idea yourself by using zillow.  What do they think?  If they don't think anything, or think that whatever you think is great, you may want to find a different realtor.  I want someone that's giving me advice, options, and negotiating for me, not a "yes" man.

Also, if this is a town house, are there any similar in the area?  Perhaps some of those have sold recently to give you an idea of value?  Finally, if there are similar properties, maybe one of those will come up for sale and provide you a better buying experience.

Good luck!

@Account Closed

You made the correct call.  I would've walked when she had you negotiating against yourself.  Gain the ability to look forward and never back (unless it's in fondness).  It'll make your life a lot easier.  There's something better out there and you dodged a bullet.

Best wishes

@Account Closed

My favorite thing about my house is the view.  It's not the greatest view in the world, but I enjoy looking at it.  The joy and peace it brings me is difficult to quantify monetarily.  10 out of 10 I'd buy it again.  However, where I live, there aren't many options with views, so I felt like it was worth paying for because I didn't know when the next opportunity might arise.  I'm not sure if that's the case where you are...

Good luck with your decision!

@Eric Dekker

When I was buying (2009 to 2012 in California and 2020 in Florida), I considered a base hit something like these ratios:

100k purchase price

1k a month rent

20-25% down with a 5% or lower interest rate. 

So, roughly 1k in rent with a $450 mortgage.  I usually paid about 5-8k on shoring the place up before renting it out (new paint, tile, roof work, etc.)  So, I'd be into it for around 30k and make around $6500 a year before the BS. 

At those rents the houses pretty much paid for themselves and put a little bit in our pockets after said BS, but the money was made in increased rents over the years and especially appreciation.

I consider these base hits because they were off of MLS, were conventionally financed, etc. It didn't take any extra effort on my part by way of finding off market deals, paying all cash, BRRRRing, househacking, etc.

I hope this helps and good luck!

As I sat looking at the view from the window of my master bedroom, I couldn't help but ponder the benefits that being a landlord have given me.  I wondered, "have I disproportionately benefited from my labors?"  Honestly, I could only hope so.  However, my reverie was soon interrupted by the sounds of the mailman delivering my parcels.  

I must be feeling edgy today to post something so obviously inciteful.  Apologies to those that were hurt by my actions...

@Peter Nikic

If I were in your position, I would definitely expect to pay more unless you paid them for an option on it.  Also, if prices had dropped and it was worse less than the original agreement, would you insist on going back to them and paying the higher price or would you want the new, lower prices on either that property or one similar to it?  Honestly, I think the seller would be crazy to accept this year's dollars at last year's prices...

Quote from @Evan Polaski:

@Chris John, I am guessing you only started investing or thinking about investing in SFRs over the last 3-5yrs.  In which case, single family homes have been a gimme.  

I am grateful that I have never had a terrible tenant that does 10-20k in damage on move out, but I have spoken to several people who have (ironically all of these stories come from people that invest OOS). 

To your first point, no, it's been since 2009.  You can say that it's lucky to get in after the meltdown, but there's a reason that I wasn't buying in 2006 and it wasn't an accident.

To your second point, I'd say that between damage and skipped rent, we've had a few 10-20k losses over the years.  However, so far, our issues have all been in state.  Having said that, the OOS is gonna happen at some point, I'm sure.  You do what you can to eliminate or mitigate it, but, sadly, it feels like it's just part of the game.

In the end, if people are buying real estate with no reserves, I can't help them.  SFRs are indeed, imo, a gimme.  Just gotta find ones that pencil out, have them inspected, and have reserves....