All Forum Posts by: David Rogers

Without knowing more about her finances, I'd suggest diversification unless she has another source of retirement income. Typically retirees move into something like bonds in order to have certainty about cash flows. Real estate has fairly predictable cash flows but investing out of state or in a property that requires great management can be risky, as others in this thread have mentioned. I'd suggest purchasing a couple of properties cash in different areas until finding a city or management that works. I wouldn't dump it all into one area or one property. 

First Federal Lakewood is really good. Try Eric Veronica -- 419-318-8985.

1) Every BP podcast (not a book I know)

2) HOLD https://www.amazon.com/HOLD-Fi...

3) David Greene's Long Distance Real Estate Investing book. You should be using the same systems even when investing locally.

Hi Stephanie, I agree with @natebell. 

Just read some articles on the Surfside Condo Collapse. That's a worst case scenario, but basically the condo board was trying to levy hundreds of thousands of dollars PER resident to fix the structural damage prior to the collapse. There is a BP podcast about an investor whose strategy was to buy condos and become the head of the association to make sure their financials were in order. That's the only way I'd operate. 

New investors get burned one way or another. Pick a specific house type (sfr, duplex) and try to do a few deals with that type. If doing out of state, try the same area so that you can build trust with agents, contractors, etc.

Kim, please hire an accountant ;-)

They should be putting all this nonsense where it's supposed to go.

Hey Tre I'd call a real estate agent in the area to get MLS listings to make sure. If there are none built then it's probably a zoning issue. Some municipalities don't want multifamily units because they attract renters or cause too much density with the additional units. You'd have to find a house to rent by the room or try another zip code. Good luck.

Sounds like a pro tenant scam. Request something like 3 months deposit or find another tenant. I'd lean heavily towards screening a different tenant.

I agree with Scott. You could choose to pay none or all of them if you really wanted to, but could be at a disadvantage based on other landlords' preferences. For my SFRs I don't pay anything and tenant is responsible for lawn and snow. For 2+, I pay water and they pay the rest because electric and gas are separately metered, and internet etc. is at their discretion. Apartments around here include gas sometimes, internet sometimes, cable sometimes. Look on craigslist and see what's the norm in your area.

What's your budget? Level of comfort desired? Ideal commute time? SFR, duplex, or 4-plex? Classic West Cleveland duplexes with 2 bed 1 bath up and down exist in Kamm's/Westpark, West Cleveland, Old Brooklyn, Parma, Lakewood, Edgewater, Ohio City, at various price points, with Lakewood, Edgewater and Ohio City being pricier. You can buy an SFR on west 90th and Lorain for $40,000 or go to West 50th and Detroit and spend $400,000 (I'm generalizing and ballparking here).

What's your criteria? If you're single and on a budget, you can get great prices on an SFR in old brooklyn and house hack rooms to friends or roommates. If you did some internships at Goldman Sachs over the summer and thus have capital then an Ohio City duplex might be more to your liking.

I'm house hacking my second duplex currently and it has been a great stepping stone for learning how to maintain a house and manage tenants.

Whatever you do, do something! Fortune favors the bold. If you make a mistake, tuition will pay you back tenfold in acquired wisdom over the next 40 years. Good luck.

Great questions @Eric Harnden. I'd wholly support house hacking as your first venture. 

During my first year in the property, it helped me to picture my expenses as being the same as if I were renting, except now I had a bonus $525 income stream that I could put into savings each month. I never considered the duplex as cash flowing anything while I lived there because my mortgage was $900+ and the tenant was paying $525. Now that I've moved out, the combined rent of both units covers the mortgage, 10% capex put away, 10% repairs put away, water payment, and leaves just over $100 as legitimate free cash flow. 

Treating my duplex mortgage as the same as my prior rent expense kept my weekly and monthly budget close to what it had always been, except every month I'd see this magic cash that was coming from the tenant stacking up in another bank account. I also deposited the rent into a different bank than my usual and shredded the debit card so I couldn't spend the money except with great effort. A year later when I went to update the tenant's kitchen, I had about $6000 sitting in savings that I used to pay for the repairs.

Thus, I considered the tenant's rent as an extra savings or bonus income stream that I wouldn't have if I were renting or living in a single family home. For the first year, I paid the mortgage out of my usual earnings and saved her rent which I then re-invested in the house by renovating the kitchen and, later, doing the other repairs I laid out in the post. There were a couple of months where I was changing jobs and during those months I would directly apply my tenant's rent to the mortgage versus saving it.

The $20,000 was the combined down payment, closing costs, and capex/repairs expenditures over the three years that I lived there. Total capex for repairs, renovation, paint, etc. was approximately $13,000 while the other $7,000 was my initial down payment and closing costs for the loan.

This duplex allowed me to save enough capital to be able to buy other rental properties cash from the auction, take care of all repairs up front, refinance and collect cash flow within the first 3-4 months after purchase. 

Let me know if that clears things up. I'm not an accountant so there may be a clearer way to segregate or explain the income/expenses than the way I did.

Best of luck with the house hack or whatever you choose to do.