All Forum Posts by: Diego A.

Hi @Curtis Osawey Welcome to the REI world!!!

All good reading and listening, education is best and if you want to learn you have to ingest as much information as possible.

I read many books that helped me, but my go-to is listeining to at least 2hrs of podcast with real examples per day.

One very important things that "want-to-be" fails is to understand that real estate has many different specialities, so you have to focus your time in your real project. Let us say you want to have a Section 8 rental, then first try to define what you can afford and where is that money will come from. Then look at places where you can buy those properties, and last investigate with HUD what is the section 8 rental in those areas.

In that way, you will collect a lot of knowledge in the process.

Hi @Chris Ehrhart

There are two prices in a negotiation, one is the offer counting multiple factors, mainly Cap rate and visible repairs when is a investment property.

The other one is when you do an inspection.

You listed 5 items here so I'll comment on each one:

- Electric panels, this is likely to be found during inspection. The requirement to change them has to come up for any other requirements that you have in which you will need to modify the panel. Inspections will most likely tell you that panel is not in code if there are older that the 90s. That does not mean you or the seller have to replace them.

- HVAC, the rule is that if it is working you may not have to replace it but count as a capex in the coming years. If it is not working then you have a negotiation power, but they are not obligated to replace them.

- Roof, whether it was disclose by the seller or not. This is an item that is always a negotiation powerhouse.

- Flooring, this is cosmetics that you have already seen when walk-in so it has to be part of your original price.

- Appliances, same than flooring.

Remember that in real estate everything is negotiable, and during the option period you have the unrestricted right to exit the deal.

Hi @Briley Roe

Nice to hear that you made the first step in investing.

Looking at the deals, I would need more information, but per the data that you have, the Cap Rate is within a good acceptable amount.

Cash on cash is low, but depending on the area that you are the appreciation will catch up. The main thing is that a good appreciation won't give a good cash on cash in the short-term but it will be good in the long term. When you have a good cash on cash from day one, it means that appreciation won't be that great.

There are many other factors to look at as the neighborhood and the age of the property those are going to give you a better undertanding on future growth

Hi @Federico Bueno

Welcome to the neighborhood!!!

@Rick Albert has answered the main points that you have to consider. 

Another thing to add is the regulations, HOAs and Cities are imposing a lot of regulation on short-term rentals or rent by a room, I have seen some HOAs regulate the amount of people authorized to rent the property too.

It requires to do a lot of due dilligence to begin with mainly in such big house. 

One simple example, if you take two rooms and rent another 4 rooms, you will have two cars and each of the other tenants will have at least 4 other cars making you house to accomodate 6 cars. Do you have the space? 

Little Elm and most cities in DFW are not walkable location so they need a car to move around.

Many things to consider, and there are only a few that I know that have done it in a short scale.

Happy to connect and rainstorm more.

Hi @Mehdi Mir

Welcome to DFW!!! 

Your spreadsheet is a good start, but market knowledge is very important. DFW is a very big metropolis and as such not all the markets within the DFW are going to work.

First of you have to answer the following questions:

- Where are you going to work?

- How long would be your commute?

- Are you looking to self-manage the rental?

- How far would you live from that property?

I can keep going, but that will all depend on each answer.

Let us jump to your comment about your spreadsheet calculator, as I mentioned market could be completely different depending on where you live in, fo this you have to look at what you want to focus on "appreciation" or "cash-flow", there is a balance between them when one increase the other drecrease, and that will always depend on the market, neighborhood and cities where you are planning to invest.

Finishing with your comment about wholesaling, please don't look at it until you fully move-in, wholesaling is another beast that is managed different and requires a lot of partnership, relationship and local knowledge.

Let me know if I can be helpful in anything else. 

Hi @Paige Gardner welcome. 

Finding deals is understanding how to analyze them, those could come from different sources. I have deals of all kinds, right now on my last three deals for some weird reason one come from wholesaler, the second from MLS and the third knocking a door.

Having a partner in looking for deals is critical so you can brainstorm and make sure that is indeed a good deal.

Hi Dallin, you are right. Foundation is an issue in DFW but we are used to it. There are many companies that perform a good work. 

It is also something that pushes investors out not because the foundation but many of the underground problems that it could cause such plumbing.

So when you find a house with such issues you have to estimate for your worst scenario.

Happy to connect and guide you more.

Hi Shyam Sridharan I would recommend to get a contractor to make all the changes. Much of the work can be done in parallel. Get with a few contractors and have them different quotes and how they will perform the work.

Hi @Charlie Krzysiak

It is all depends on your goals. At your age as Bruce mentioned I won't recommend a condo for the things he highlighted.

FHA most likely won't approve them, but there are loan programs that works similarly than FHA that will. I made a few deals in North Dallas.

Special assessments and HOA fees are a risk and renting out a condo most likely won't generate much of a cash flow.

At $300k with you credit and saving you can still qualified for a loan for sure we have to find the program that works for you.

On that budget you could find a nice place no that far from work so you don't have to move far to the suburbs. 

I would recommend what is your plan and strategies too on the rental. It is important that you keep the investment for a medium to long term.

Hi @Juan Castillo

Great advise from @Nathan Gesner, I want to add to his list that you have to learn about BRRRR.

There are many articles and podcasts from BP that they talk about that.

The main thing is fill you up with as many information as possible.