All Forum Posts by: Derek Diamond

@Adam Parker

Hey Adam! Welcome to BP.  Great questions.  If I were you I would get something more turn key.  No real rehab.  Maybe something that needs some carpet and paint.  More rehabs will come out of nowhere but start with something easier.  I would buy one and then in five years when I pay a large portion off I would flip it and buy 2 with the equity.  And keep going from there.  You could also use money from your job plus income to pay off the first duplex and then in 5-8 years buy your second.  After 15 years you will have 4-5 paid off and income for an early retirement.  My first property I bought was rent ready and there was still plenty to do even though I was not doing any "forced appreciation".  It wasn't till my third that I personally was ready to take on more than that.

@Kapil Patel

HeyKP! Not sure if I am misreading your question but you can't just pay down you current loan with the increased equity. You could refinance and pull the money out and use it for another one. You could use a HELOC or a full refinance.

@Chambers D McClay

Well you are already over the 1% rule for you monthly income. Not a bad start.

1) you have no repairs but the price is up $10k from purchase. Are you buying under market? Even if it is a turn key there is always something to repair.  

2) nice job with putting money aside for vacancy and cap. expenses - stuff like that.

3) Is this a fourplex, if so $100 a door is good.

4) your operating expenses seem a bit low. are you using a property management company?

I did not do a deep dive into this but just a few things I saw.

Good luck and welcome to the party!

@Marcellus P McKinley

Hey Marcellus! That is weird how much is missing. Sometimes, I will see a few key pieces of information missing but not normally that much. Red flags. There are a bunch of steps when listing a property. The family tells the agent. The agent puts the info in the MLS. Then Zillow and sites like that pull the data down and sent it out. There can be a lot that goes wrong in every step. An agent could add an extra zero to the square feet. Or the family might have inherited the property from a passed relative and know nothing about it. There are so many reasons. If you have a go to agent I would reach out to them and see if they could do some digging because agents should be ale to get a bit more info than you are seeing.

@Kerven Jean

Double check with someone in your area and/or reach out to a local lawyer or wholesaler but I would assume that you could still lock up the property and they will have to pay their agent the 3% or so. I have never been in this situation and I am excited to learn and see what others say.

@Robert Jones

Hey Robert! Welcome to the BP community.  You know the old saying, the more you learn the more you realize how little you know.  Same with real estate. Don't get bogged down with analysis and never pull the trigger.  At some point you have to just jump in.  You will never know all you need but just cover your basics the rest will be learned along the way.  Know your numbers for buying and selling.  User higher estimates for rehabs and lower estimates for how much rent you will take in.  You will make mistakes on the way but as long as you keep with it they are just learning experiences.  I recently had a $10k learning experience but I had solid numbers so I still ended up doing just fine.  Good Luck and jump in!

@Carl Sherrill

Welcome to the BP community!  I can only speak for Colorado and not all of it for sure.  I live in the resort town of Steamboat Springs, CO.  Our industry is build on second/vacation homes.  Some people believe that they can buy a condo for example, visit a few months out of the year and use the rest of the year to pay for it.  Not a bad plan but our resort towns have fairly high expenses that if you don't run correct numbers can turn your vacation rental into a nightmare.  For example most of the management companies charge 35%-50% off the top.  That is before all other expanses, HOAs, and mortgage payments.  Investors have use sites like AirBnB to cut down on these costs.

One question, that is important for any investing but specifically resort investing is the rental history.  My town is notorious for future/speculative rental estimates given to the buyer not actual numbers and the seller expects buyers to buy the properties based on these numbers. "Just knock out that wall and add a bathroom to raise the rents..." as if it's that easy.

There are other "dangers" but to just give one piece of advice, really read up on your HOA documents. In this resort town they can be very different from building to building. I live in a townhome with an identical one next to us, we are allowed to have dogs but they are not. And that is just because the president of our small 8-plex has a dog and convinced our single building to change. It would suck to buy a place and have to leave Fluffy at home.

But if done right you can do well in a resort town. Good luck and welcome to the party!

@Brittney Guy

Hey Brittany. Welcome to BP!  I have looked at Pueblo on and off for awhile now.  I even put some offers in years ago because the prices were so good.  At the time the properties I found were near the 2% rule.  I never pulled the tigger though.  I do know you need to do some research about where in the town you buy.  There are some nicer areas that people like to retire at because their set incomes can stretch a lot father there than other places in Colorado.  I personally did not spend enough time researching and learning about the area to feel comfortable to invest.  But I do know a few investors that have found good success down there.

@Andrew Wick

Welcome to BP!  I fully agree with what everyone has said but I just wanted to ask a question.  Have you talked to your CPA about this decision?  I am no CPA and I don't know much about taxes so this is not advice just a question... Have you lived at that property? If so you maybe able to sell it without incurring any taxes.  If you get taxed at 15% that is a saving of $32,250. Enough to buy another condo plus all the money you could take out, give or take another $100,000 allowing you to buy 2-3 more condos or investments. Depends how much risk you would like to take on. There are a ton of options for you!

Yes....

But it is not simple.  Just like any other aspect of real estate it takes hard work.  Check out the book on this site by Brandon.  "The book on investing in real estate with low  or no money...  something like that. It's a really long title.haha

I would say to pick an investment strategy that excites you not just because you heard it a good way to start with little money.  If that is Wholesaling go for it!  If it is multifamily family investing you will find a way to get the money if you have the drive.