All Forum Posts by: Jim S.

Tipping point for me was my first property - immediately. Decided if I was going to start investing in real estate it would be on the side while doing my 9-5. That meant using OPT - more than happy to pay my property managers who do a great job so I don't need to deal with all the random issues that pop up. It's much more scalable if you are not part of the equation. I can add properties ad infinitum without impacting my day job. It also opens up out of state investing - just bought a property that cash flows better than anything I'd find locally. It's now fully rented & managed for 5% of rents (typical is 8-10% but found a good mom & pop operation).

Had the opposite experience with my first investment property in Summit County CO. Bought for $180k two years ago, got re-assessed at 220, but taxes are $550/yr all in. It's a beautiful thing :) Depends entirely on your area - if the play is good schools get ready to pay up.

"Disregard" is how I feel with most of the Big name financial gurus.

Agree with people saying OOS. Lived in SF until earlier this year and bought my first property OOS in Colorado (where I now live) two years ago. It forced me to build out relationships as I couldn't possibly fix problems/manage renters remotely, in particular as I do short term rentals on that property. I'd recommend using Zillow data to find markets with high cash flow potential that have demographic trends of young people moving in. There are many such locations. I'll buy a few properties here in Denver but my real cash cows will all be remote investments.

@Luke F. 5% for vacancy is my standard for multi-family. 

Repairs/capex both depend on the condition of the property. I don't think it makes sense to tie either to % of rent as they are independent of how much $$ comes in. 

My 150 year old brownstone I allocate $2500/yr for maintenance which is likely a little light, a newer place I'd say $400-500/unit. I assume capex to be in a similar ballpark to maintenance costs and adjust up or down depending on condition of the roof, hot water/furnace, appliances, etc.

Found this 3 hours too late! Will try to make the next one.

I know from personal experience who is moving into Denver - techies that like to ski, hike, etc. My friends, previous co-workers, etc. all of which make >100k working in tech. My current co-workers have mostly moved here from SF, NYC, or D.C. where they paid crazy high rents and buying a house wasn't even a thought.

With or without jobs in-hand great tech talent is flooding here due to lifestyle choices (many techies like myself love the mountains). I believe the market is fairly priced currently on pure home values, rents will rise to catch up eventually.

That said - I've been looking unsuccessfully for about 4 months because I'm not going to bank on the appreciation and I agree there could be a short-term correction in prices. 

I need a property that will cashflow (even minimally) before I'll pull the trigger. Planning to continue to be patient until I find the right deal, bought a multi-family out of state in the meantime and will save up for another if nothing comes along locally.

@Agustin Jimenez

Doesn't hurt to look! I'd check both markets for deals but given that situation I'd focus on Albuquerque. Good to have family connections that might know local contractors, areas to watch for, etc. My first (currently only) out-of-state investment is in upstate NY where my parents live.

Based on looking at some Zillow data rents are rising steadily in Albuquerque yet prices are still below the 2008 crash. Seems like a reasonable place to go bargain hunting. Should be able to find some properties that rent for 2% of price out there.

Benefit of out-of-state investing is that I'm never tempted to fly to NY to try to fix a toilet, it forces you to build a scaleable business with a solid team.

This is just me but given the price:rent ratios in LA I'd rather not invest in that market. If you can find a great deal then by all means go for it but I'd be looking at out-of-state investments where I could get a better cash on cash return. If you grew up elsewhere or have local knowledge in another market I would look there as well to see if there are any more attractive deals. If you start seeing properties you like give some property managers a call to make sure you'd be able to have it professionally managed. If I had $80-120k waiting to be invested and lived in LA, NY, SF, etc. I'd look to buy 2-3 out of state multi-families.

Welcome & good luck with the duplex hunt!