All Forum Posts by: Account Closed

Shout out thanks to anyone who posted encouragement. 

Update on our progress: we closed on the home without any problems. Put about a week of work into the property including a fresh repaint of the deck, replacing ceiling fans and light fixtures, repaired some flooring, and repainted the walls. Got it rented out within 2 weeks to tenants we think will be great. 

Very exciting to start our foray into REI and now we can't wait to find #2! Hoping everyone in NWA is able to stay safe these days.

Also interested in Lubbock for cash flow. My wife was working for a wholesaler for a bit and they were finding lots of solid deals in the area. Wondering if these are mostly catered to students or just renting families. Vaguely know Lubbock from trips awhile back, but I know it's changed a ton

Echo what @Harrison Sharp said. Factor it into the deal, but don't focus heavily on it. In those suburban communities, HOAs are more readily part of the lifestyle. People like their well-maintained homes in nice school districts with manicured lawns. If you were investing closer towards Dallas (like Richardson or Dallas proper), I could see a justification for avoiding HOAs because renters may not want the hassle of abiding by all the stringent rules. 

@Chris Hylton I went to college at the University of Arkansas and my wife is originally from there so had a natural fit! I'd be happy to discuss the area with you. Shoot me a PM! I may be new to the REI scene, but definitely no stranger to NWA

@Babek Sandhar

Appreciate your thoughts on this. I've posted in other threads, but I'm about to go through my first REI purchase and got to admit I've been strongly considering backing out. If I were in the market I live in (DFW), I'd be running away without question as housing as been ridiculous lately and I have to imagine this is going to impact more heavily in larger markets such as this.

But since our investment property is in a near(ish) college town, my wife and I have ultimately decided to move forward.  The numbers make sense even with a slump in rent prices and barring a catastrophic occurrence like no college classes in the Fall, we think demand for a well-priced rental isn't going to dip enough in our target market.

Would love to get your thoughts, even if you disagree.

@Adam Tafel

Appreciate the thoughtful response. We’re going to run the numbers again with some of the insights from those above and factor in scenarios like students not returning in August or dips in rental prices before making our decision.

@Clint G.

Thanks for the insight!

Here are some numbers:

Rents at $1500 with ~$125 property taxes, $75 insurance, and factored in 7% vacancy and 7% maintenance over the year. Comes out to a roughly 12.5% COC return.

Yeah I just refinanced my primary residence about 2 weeks ago locked in at 3.25%, but the state I’m getting this investment property in has higher rates from what I’ve been told and the investment property makes them go higher too. I have a 740+ credit score so it’s not that I don’t think. I’ll shoot you a message on the broker side! We’ve been working with a local bank broker since my usual one is out this week haha.

Hey BP! Very grateful for the wealth of information available for me on these forums and linked information scattered around. Happy to finally be diving in after a month of studious research and equipping myself with the right knowledge. My wife and I found a property this past week and we are under contract but still in the option period. The recent coronavirus events, jump in mortgage rates, and potential economic uncertainty has me spooked so we are carefully considering whether to continue through. Would love a second opinion on the deal and maybe some insight from those who have been through similar events in the past and have more experience.

The Deal

Investment Info: $160k home in college town about 3 mi from campus
What made me interested in this deal: my wife and I are specifically targeting buy and hold SFH
How did you finance this deal?: conventional 30yr loan
Other notes:
- Our COC estimates are about 12.5% with us managing the property (vacancy and maintenance factored in)
- Has older water heater, HVAC, and AC unit that have been regularly serviced, but are higher on age

Questions
- Should I be worried about an economic downturn on a buy and hold property next to a college campus and generally economically stable area?
- I've been quoted at 5.25% rate on the mortgage, but also given an option to float it until close in the hopes that it drops after the rush to refinance gets completed and maybe the coronavirus situation stabilizes (big if). Should I float or just lock?
- If the numbers make sense, am I overthinking it as there's no way to time these things?

Thanks in advance for any replies!

Originally posted by @Michael Ward:

@Account Closed Congratulations on getting your first property under contract! That's a big step. I'm a Fayetteville native currently living and working here as a broker. If you have any more questions about the market or just want info, feel free to reach out anytime. Best of luck with your purchase!

Thanks Michael! I'll shoot over a connection. Maybe we can work together in the future. 

Hey BP! My wife and I are excited to be under contract on our first investment property. As two Razorbacks living in Dallas, we started looking locally, but found the market particularly difficult down here to meet our goal of 10-12% COC ROI on a long term rental property. Our next choice was to look in the Fayetteville area for similar SFH to rent out. We're under contract and hoping to close in mid-April.

Our long-term outlook is to pick up a property each year in markets within ~5 hours of DFW. We're excited to start our journey and I wanted to take the time to solicit any or those in a similar situation who want to bounce ideas around. Thanks for reading and hope to talk to some in the community soon.