All Forum Posts by: Dave Alexander

Thanks for the 123Flip reference as well. I'm not looking to flip per say but the budget break downs on the site are great and should be helpful when I begin evaluating rehab costs for personal/rental properties. 

"Cash for keys"? Do you mean you paid the evicted tenant to give you access to the property?

Also what city/state was this in? (for contextual purposes)

Interesting that Philadelphia is 3rd on the list. I wonder how involved international Chinese investors are with the rapid gentrification in the city. 

I can see the importance of an agent if you're trying to move a property. But in the scenario where you're buying am I correct in saying they aren't THAT important? I can basically search and find listings on the MLS through one of the big realty sites. I know how much I have to spend and what I want and can narrow listings down myself. The biggest things it seems that the agent will be doing if setting up showings and paperwork......

I'm asking because I've told a friend that they can represent me but they've only been a RE agent for a couple of months. Honestly I figured it was a job anyone could do well if motivated. But now after research I'm seeing advice that most places suggest an extensive interview process and selecting an agent familiar with a specific area.

One of the issues for me is my target area is an entire city AND it's surrounding suburbs. I have a few specific zip codes but honestly I'm open to anywhere in the city (and surrounding suburbs) if it meets my needs. Could this potentially be a turn off to an agent? Another issue is i'm looking for MFP, but want to owner occupy. Do I necessarily need an investor focused agent? I can basically do my own analysis or simply ask questions here :)

What do you guys think? Any anecdotal experiences with an agent making it harder to buy a property you were qualified to buy? Right now I'm of the opinion I'll be doing the majority of the leg work search wise and just need someone who is competent enough to get my offer in on time and complete the paperwork. Am I naive etc?

The problem will be hitting the 50% and 2% rules with a property that costs that much. I'm in the same price range in Philadelphia and nothing I'm seeing out there will satisfy those two rules. Maybe it's different in NYC because of the COL difference. Is the Bronx a desirable area to live in? I'm assuming you'd have to be pulling $1500+ per month on 3 units to hit the metrics. 

@Troy Sheets 

Thanks for the input. I'm leaning toward doing this since I will be buying a home anyway. Further, even if I operate at a loss it is likely to be a net positive when compared to what my expenditures would be if I simply bought and lived in a SFH. I plan to use a FHA as well, and perhaps leverage some of my current savings to rehab the property and increase the appeal.

@Jon Holdman 

Thanks for the clarification re: property management companies. I will be able to handle finding tenants and screening, I figured the real value in using a PM company was in having a network of handyman/contractors who could QUICKLY address situations. If an emergency arises I will first have to research costs and then interview and select a vendor to perform the work.That could take a couple of days and then the work STILL may not be satisfactory. I assume PM companies handle this more efficiently, but maybe it's just not cost effective to have them when there are only 1-2 units

@Jon Holdman Actually I'm not sure if I would even serve as PM, as I have no handy man skills and work full time. So that would be an added expense. It seems like I need to either find a cheap property in a high rent area or combat the income deficiency with unit volume. The former is unlikely and the latter doesn't make much sense in my situation.

@Eric Mayers There are cheaper properties in Philadelphia but I won't be able to sell those locations to my wife. As I mentioned to jon holdman, I have no handyman/rehab experience and feel those types of properties may further complicate matters as I expect to get jerked on my first couple of contractor engagements. It seems like I need to figure out if the potential to have $800-2000 a month extra income outweighs the stress/risk of being a landlord. I'm moving into a property in the price range I mentioned either way, I just figured this would be a good way to save or make money in the process. Any property I purchase would be a long hold unless the market just exploded to the point I'd make massive profits by selling. So maybe breaking even is not a bad thing if in 20-25 yrs the properties are purely positive cashflow due to principal reduction. 

Hello All, 

I'm new to the forums and am interested in owner occupying a 'plex (2-3 units most likely). Prior to discovering BP I assumed the only rules for successful renting were to not have vacancies and not to take massive losses due to repairs/bad tenants. After browsing it seems that a lot of people here adhere to the 50% rule and having positive cashflow of $100+ per door. These metrics have completely changed my outlook on becoming a landlord. In the area that I'm searching (University City-Philadelphia) du/triplexes are going for $250-400k with average rent of 800-1200 per unit. Using this calculator{1}, every deal I look at results in thousands of dollars in NEGATIVE cash flow per year. 

So my questions are:

1) Do these metrics make sense in the context of higher cost RE? Most of the comments I see on here involve properties in the 80-120k range. 

2) Does the fact I'll owner occupied change how I should look at this? ie: opportunity cost savings. Honestly I'd be fine with someone paying my mortgage for me and just saving market rate rent/mortgage every month...perhaps to use later for properties I don't occupy. Is this good enough or are the risks of being a landlord too great for "Hey, at least I don't pay any mortgage" to be sufficient? Basically do I NEED positive cashflow for an investment to make sense?

Thanks for any input!

1. (http://www.goodmortgage.com/Calculators/Investment...)