All Forum Posts by: Conner Hitchcock

Hey all, 

I’ll try and keep this post as concise as I can!

My wife and I bought a townhouse in 2020 with the goal of moving from it and turning it into a rental as quickly as possible!  We were able to do that within about two years and bought ourselves our own single family home in the country for us.

The townhome profits very well and is in a desired area, we love it and plan on holding it forever! You can’t beat a 2.5% interest rate!

The problem is the single family home we have moved to, it was made in the 1950’s and was flipped by some really terrible flippers.  They really put lipstick on a pig and sold it to us and our long time home inspector retired so we didn’t catch the problems ourselves. We’re sitting at 6.78% interest comparatively.

Since moving in, we’ve had to totally repair the custom chimney (a couple of grand), get a new roof (had to get a 26k loan at 10%….. kill me now) and have discovered the crawl space ventilation needs to be addressed, our old cast iron pipes are blocking the plumbing up, and we need to change the pipes from Poly b in some places.  

If we sold the house we’re in for a minor profit, we could cover the costs of my roof loan, selling costs, expenses for fixing it up to sell etc. we’d essentially loose most of our down payment to get out of this deal.  we would have to move back into the town home and start saving again for another day.   that being said, we wouldn’t have the high interest debt and wouldn’t have to worry about paying for all of the big repairs.

We have our first baby on the way and are worried that the house is going to keep giving us problems and become a money pit. Would you keep the SFH with the big loan for the roof and just fix as it goes to hopefully maintain the long term (hoping no more major problems arise) or sell, cut my losses, reduce my high interest debt, and start over.


there’s always more to the story including personal reasons but hopefully this paints a picture, feel free to ask questions so I can clarify!

🙏🏼 
Conner

I have an applicant that doesn't want to pull his credit (doesn't want to take the hit for a hard credit check). They are offering me a report from Rentspree that THEY ran.  I would still follow up with the employer for the paystubs and do background check on my own.

Should I budge or insist on the current protocol which is me running credit myself?

Thanks all!

Conner Hitchcock

So I’ve nearly got my first day as a landlord in the books until I get a call from my tenant….

The top loader laundry machine explodes.  Apparently during its first run, the drum comes loose and blows the front off the which causes the washer to drain onto the newly installed carpets and proceeds to flood the basement.

Glad I bought a dehumidifier yesterday and had a bunch of towels lying around 😂😂😂. We’re getting it cleaned up and I am off to Home Depot tomorrow to get another new washer!

Who knew being a real estate investor was so glamorous 😂😂😂

This is just a random post but I still thought it pretty cool.  If you are at all familiar with the show/movie series of Jackass, some of you may agree that the cast members would be the last people on earth you'd expect to be landlords on the grind!  I wonder if Ehren watched Bigger Pockets?!?!

 I'll send you a DM.  I'd love to hear from someone with more experience!  Next time there is a meet up I would love to participate and join as well!

Thanks so much!

Conner Hitchcock

Hey all,

After some thought and help from previous posts, I have decided to begin taking some steps to turn my primary residence into a rental. It's a nice townhome in Northern VA, that I know is fairly in demand, especially with the surrounding growth and DC being so near. As I am in the process of moving out and renovation to be "rent ready", I would love to know the most important systems and order of operations to focus on from your perspective.

Once I'm ready to go, having a thorough tenant screening process, having a clear form of lease agreement ready to go, and solid understanding of Virginia housing laws is a must.  Out side of "the bare minimum" what would you suggest I invest in learning?  i.e. landlord softwares, communication templates or business numbers, templates for marking expenses and profits, etc.

I plan on growing and expanding.  I want to set myself up with a solid structure so when the time comes, I can act fast, scale fast, and be the most optimal landlord, whether it be for 1 tenant or 1000 tenants.

I appreciate the time and I look forward to seeing what ya'll think.

Conner Hitchcock

It totally depends on what your priorities are, I was a first time home buyer 2 years ago and discovered houses have a way of costing way more than they seem.  If you are interested in the appreciation, I personally don't think growth and price increases are exclusively local to the Ballston area, especially as many of the neighboring suburbs are renovating and growing. If appreciation is the big driver here, for me at least, it wouldn't be a strong enough case for me to purchase something so expensive that hurts cashflow that much, especially as a first property.  If the conservative numbers indicate that it will produce a bit when you move out, I'd give it more consideration.  

I would rather rent at a lower cost and have the remainder of what would have gone into the mortgage (and whatever else you can put aside) go into savings for a better deal in the future (cashflow wise).  You then can take the time to talk to others in your area about other potential investing markets and what would work best for you, read books, go through forums, etc.  If you're just getting out of college, you still have plenty of time.

Those are just my thoughts, good luck!

Hey all,

I am a new investor and current business owner!  I am getting ready to rent out my first property (townhome) by the end of August in the NOVA area (sterling).  I originally bought it as a primary residence but am transitioning up with the goals of family.  I am making this post to get a feel for what some more experienced investors are thinking in the area, I figured I'd share my perceptions and maybe someone could let me know of theirs and tell me why I could be wrong or right.  Also,  since I am a newbie, I'd love to talk with anyone in the area just to get to know some new folks as well.

My thoughts:

Most of the NOVA area is going to be difficult to make decent COC returns due to the values of the homes (especially starting with less capital). I've seen some discussions regarding the benefit of purchasing low cash flow yielding homes for the benefit of higher long term appreciation. As someone new with limited cash on hand, it either makes it a bit more difficult to get involved doe to the cost or difficult to gain momentum due to lack of cashflow to reinvest. I've thought about buying some of the less expensive condos/apartments in Reston or homes in Manassas, but between HOA and property costs it's still hard to justify.

What are your thoughts on the moving slightly south or west (moving north to MD is also an option).   Front Royal, Linden, Warrenton, Woodbridge; even going as far as Culpepper and Fredericksburg.   What pros and cons do you see?

Pros:  Lower cost to get into the game, potential for future growth with future expansion.

Cons:  Less income comparative to DC/NOVA, investing in a lesser known territory, slower growth and appreciation, less cashflow due to property value/availability/whatever local reason??

Thanks all and I look forward to connecting with you all :)

-Conner 

Hey all,

Rookie here looking for opinions on my situation.

My partner and I live in a nice townhome in a desirable area of Northern Virginia. We want to move further west to get some more space but it leaves us with questions on what to do with the townhome.

We are currently discussing whether or not to sell or rent out.

Option 1: renting out town home and buying a new primary residence

This would be my first step into rental investments. I would be my own property manager. Estimated cash flow would be around $450 a month with an COC of 8%. We also only have an interest rate of 2.5% which is a big plus :)

If we are purchasing a new home while renting out the current town home, we'd have to put low money down and have to pay PMI which would negate the cash flow from the rental significantly. Along with that, not having extra money from the potential profit of selling the home will spread us a bit thin monetarily. Both of our jobs would be able to cover two mortgages if worst case came along and we loose a tenant but it's still not desirable.

Option 2: Selling the town home for a slight profit

So option two is easy in principle. Sell, hopefully make a decent profit. Use that to put the down payment on our next home, use the remainder to fund a better deal. But it would have to be done ASAP.

In our area, the artificial home prices from Covid and inflation are starting to normalize, if we don’t sell soon, we will likely be only slightly above where we purchased the home. By trying to sell now, we could keep profits relatively high but would force us to pay some hefty capital gains tax and any fees from selling the home. Along with that, I worry that I’m giving up an opportunity to get started in real estate investing. That being said, if home prices are going down, so to, would potential real estate investments which gives me more options.

All in all,

Option 1 is a first step into real estate investing and seemingly the path of least resistance with regard to starting to invest, but is the smaller return and lack of monetary protection worth the risk?

Option 2 seemingly gives my partner and I the most financial security, at least in the short term, but it pushes off the potential to begin investing sooner rather than later.

If anyone has any ideas or opinions, I’m all ears. I’m open to hearing different degrees of risk tolerance and feel I can articulate an opinion based of some knowledge from some vets!  Also let me know if I’m way off and if there’s other options you’d recommend.

thanks all, Conner 

Hey all,

What’s your order of operations as the deal finder once you have found a promising property.

At what point do you bring it to your private lender/partner who provides the capital?

What steps in order would you personally take?
Thanks, Conner Hitchcock