All Forum Posts by: David Liu

 Love this response from Paul. It's pretty conservative which is what you want for your 1st property. 

I agree his analysis. 

To me it looks like house-hacking is the better route for you. I househack in the SF bay area and it's been great. 

House hacking allows you to understand property management & real estate investing finances, kind of like training wheels. 

If you have further questions on house-hacking in california, let me know. 

Wilson, 

I'm glad you're taking the 1st steps to getting pre-approved. 

You'll want to ask what are the estimated closing costs and, what the loan origination fee is. 

You will also want to ask about interest buy-down options, i.e. pay extra money upfront, to reduce your interest rate. 

You should ask the lender or loan broker what other fees they charge. 

Hope that helps. 

@Liam Marshall, 

Assuming you want a free way to estimate rents (Rentometer and BP rent estimator are paid after a certain amount of use). You would then go on zillow, craigslist, fb marketplace as mentioned by Christian. The key would be to collect as many comparable rentals and get to a $/sqft number. 

i.e. Duplex A:3 bed 1 ba, of similar condition rents for $1000/mo , 1000 sqft

Duplex B: 3 bed 1 ba, of similar condition rents for $1100/mo, 1100 sqft

etc... 

You would then get $1/sqft is your average rent for a 3bed 1ba. 

Now say the property you're looking for is 1200 sqft, then your estimated rent would be $1200/mo. 

Hope that helps. 

@Wayne Lee, 

1st of all congrats on saving up the $80K. That's a great a start! 

From what you've said here: "My risk tolerance is low and my emphasis is on cash flow. That may change as I gain experience. Despite the drawbacks of long-distance investing, I am leaning towards acquiring a multifamily in the Quad Cities or Cincinnati." 

That to me sounds like the answer, you are probably just looking for confirmation. 

I also read your push-back on finding a good property manager and that's what holding you back and you want to manage the property yourself. I highly recommend you ask your realtor or realtors for referrals on property managers and interview them. If you haven't checked it out, read David Greene's Book on long distance real estate investing.  It gives you a step by step on how to interview property managers and find the right one. You can also leverage a property manager to confirm rents and demand for the property you are looking for. 

I'm assuming you have a W2, you don't want to be managing properties as a side job, it's a headache. Leave it to a property manager who's full time job is managing properties, they have the expertise. 

Remember this is your 1st deal, so you will have a lot of limiting beliefs that you'll use as an excuse to not invest. Step back, take a deep breath, thousands of people have figured out how to invest in real estate and go for it.

Good luck!

David

@Sergio Martinez, you can also check out spareroom.com and see how much rooms are renting for in the lancaster palmdale area. 

Good luck!

Hey Arron, 

I go to a great meetup in San Mateo every 1st wednesday of every month. It's hosted by Eugene Nilus and it's in San Mateo. 

https://www.meetup.com/exclusive-bay-area-real-estate-group/

You could attend this one and see what you like about it (for your own potential future meetup). There are experienced and inexperienced investors that go and connect. 

@Rose Frantz

That's certainly frustrating to hear. 

The realtor may be right but you should also consider things from their side. They make money selling your property. So unless they are also your property manager as well, they may not have the expertise or the best advice in turning your rental into something that's profitable. 

Here are a couple of things to consider:

1a. You will probably see less and less applicants as winter sets in. It's not a good time to rent out long term properties nor sell it during the winter months. 

1b. Does your HOA allow for Airbnbs and if not, what about medium term rentals (>30day stays?). Airbnb will net you ~1.5x the long term rent, $1695*1.5=$2542/mo. double check by using https://www.airdna.co/. It sounds like your place in a popular high end area, so it could do well for short term or medium term. For the medium term route, are there hospitals close by (within 10-20 min drive)? This option can allow you to do about 1.1-1.3x the long term rent. check furnishedfinder.com for rates near your condo. especially if it's a 2bed 2ba, travelling nurses usually travel in pairs, so that's a perfect spot. 

2. Are you listing the property by yourself or are you using a property management company? Let us know which one. 

If the HOA doesn't allow airbnbs or medium term rentals, then I'd agree with the people about potentially selling.

Hey Harshraj, 

I use Zillow Rental Manager, you can setup automatic rent collection and the rental income is easy to track. You can also charge for utilities by requesting a one time payment on Zillow. 

It's not bad for a 1st house hack. You'll also want a system like stessa.com(comes free with BP membership). Stessa can help you track automatically all income, expenses by integrating with your bank account, credit cards used for the househack. You can then press one button to export all tax documents at the end of the year. 

Make sure you create a separate bank account for your rent collection. Don't mix it with your personal bank account. 

What are your opinions on having a septic tank for a multi-family property? I'm evaluating a deal and the sewer doesn't go to the city, it's a septic tank property. Owner said they just replaced it with a brand new septic tank. Does it last long? Do you stay away from it due to maintenance? Or is it ok?