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All Forum Posts by: Eric Bate

Eric Bate has started 9 posts and replied 42 times.

Post: I want to start investing as soon as possible, but I'm 18.

Eric BatePosted
  • Rental Property Investor
  • Waukesha, WI
  • Posts 43
  • Votes 13

I also wish I had gotten into this when I was 18.  Just a few jumbled thoughts as they come to mind...

Your student loan debts will work against you in qualifying for a mortgage.  They subtract it from your income even if you're still in school and don't have to pay them back yet.

From what I understand, the only factors lenders look at are credit, income, and debt.  Not age.  Start building your credit right away, increase your income, and avoid debt.  A balance on your credit card is good, but pay it off every month like clockwork.

By going to college, you're building debt, and limiting your income potential.  A lot of people go to college because other people put pressure on them to do it.  Then they wake up one day with a massive debt they'll never live down, and find out it didn't really help them increase their income after they graduated.  College can set you back big time, so make sure you really want that degree enough to spend the money for it.  Think of it like a purchase instead of an education, and in addition to the price tag, you pay with years of your life.

By the sounds of it, you want to be a real estate investor, which doesn't require any degree.  And it will make you rich, especially starting young.  Let's say you decide the degree is worth the time and money you'll spend on it.  What if you delayed enrollment for a year (they'll let you do this), and instead spent that year earning money and building your credit?  If you can live for free somewhere while doing this, you can save up a ton of money.  By the end of the year, if you're savvy enough, you might be able to buy a duplex to house hack.  Then go to school, and the duplex will pay for itself and build your equity.  If there's a requirement to live in the dorms your first year, you can usually avoid this as a transfer student.  If you really can't avoid it, pick a different college.

The community college idea is golden.  Community colleges are cheaper and easier to pass than at big universities, in my experience.  People hardly care where you got your degree once you start working, but literally nobody cares where you took the classes that counted toward that degree.

One last thought — see if you can get a job that will teach you home construction and repairs.  Otherwise take some time to volunteer for Habitat For Humanity.  If I were in your shoes, I'd skip college, get a construction job or something that pays well, save as much as possible, and start investing ASAP.

Post: Bigger pockets community Minnesota

Eric BatePosted
  • Rental Property Investor
  • Waukesha, WI
  • Posts 43
  • Votes 13

Hey Rashad, congrats on graduating!  How's the house hunt going?

Post: BRRRR vs. House Hacking in the Twin Cities

Eric BatePosted
  • Rental Property Investor
  • Waukesha, WI
  • Posts 43
  • Votes 13

The Habitat for Humanity idea is golden.  Definitely going to put that one to use.

@Travis Sperr Definitely trying to up my income right now.  I'm still a student, though, which makes it difficult.

I keep thinking about that duplex in Frogtown... but then I'll go and visit the neighborhood, and ask people living there what they think of it.  It's always the same — it's the hood, they don't like it, they'd like to move away, etc.  Most the houses have ADT or similar signs in their yard.  I'm gonna stop thinking about that neighborhood.

Post: BRRRR vs. House Hacking in the Twin Cities

Eric BatePosted
  • Rental Property Investor
  • Waukesha, WI
  • Posts 43
  • Votes 13

For the sake of keywords... I'm looking in Minneapolis and St Paul, but I'm also starting to wonder if it might be better to invest in other parts of Minnesota, even though I live in the Twin Cities.

Post: BRRRR vs. House Hacking in the Twin Cities

Eric BatePosted
  • Rental Property Investor
  • Waukesha, WI
  • Posts 43
  • Votes 13

Hi all!

My job income: $22k/yr

Current rent that I pay: $955/mo

My savings: $50k in the stock market; $11k in a Roth account

I've been looking for a duplex for a couple of weeks as my first property, and stuff is either just out of my range (roughly $150k), or else it's in a sketchy part of town. Three out of the four duplexes I've visited on the MLS have gotten multiple offers within days of being listed. The last one is in a neighborhood where all the residents call it the hood (Thomas-Dale / Frogtown).

Even at the county tax-forfeited auction, stuff has been selling higher than I'd expected — one SFR with an minimum opening bid of $20k and a foundation crack sold for $93k. I couldn't believe it! Are foundation cracks really not that big of a deal?

Should I keep looking for a duplex to house hack for my first property, and just hope to get lucky with the MLS? Move into Frogtown, and hope it turns around (which is seems like it eventually might)? Or would it be better to buy a distressed house, renovate, refinance, and repeat? I have no experience fixing up a house — just minor stuff like painting and fixing toilets.

My current mid-term goal is to buy-and-hold enough properties to cash flow around $30,000/year so I have a net to fall back on if I'm injured and can't work.  Long-term goal is six figures per year from investments by the time I'd like to retire (about 30 years from now).

Thanks!

Eric

Post: My First Analysis: Duplex in Mpls

Eric BatePosted
  • Rental Property Investor
  • Waukesha, WI
  • Posts 43
  • Votes 13

Awesome!  Thanks @Eric Mayo.  And might I commend you on a fantastic name, impeccably spelled. :)

Post: My First Analysis: Duplex in Mpls

Eric BatePosted
  • Rental Property Investor
  • Waukesha, WI
  • Posts 43
  • Votes 13

Still trying to figure out how to find the water, sewage, trash, and utility costs.  Would I call the city of Minneapolis?  The electric and gas companies?  Is there a website that I could check this stuff out on?

I'm going to check this place out tomorrow.  Wish me luck!  It'll be the first house I've visited.

Post: How to Analyze Duplex in Minneapolis

Eric BatePosted
  • Rental Property Investor
  • Waukesha, WI
  • Posts 43
  • Votes 13

@Pavel U. Thanks for the tips!  It looks nice, but it's unfortunately a little above my price range.  Still working with the mortgage lender to figure out what I can afford, but it'll probably be closer to the $150k range.

Post: How to Analyze Duplex in Minneapolis

Eric BatePosted
  • Rental Property Investor
  • Waukesha, WI
  • Posts 43
  • Votes 13

@Pavel U. That's amazing! Were all of them found through the MLS? Most of the numbers I've been crunching aren't as favorable as I'd like, but I'm still learning the ropes of analyzing properties, especially house-hack MFR.

Post: My First Analysis: Duplex in Mpls

Eric BatePosted
  • Rental Property Investor
  • Waukesha, WI
  • Posts 43
  • Votes 13

It looks like it's all ready to go as is, yeah.  But the property was built in 1900, so it'll probably need some ongoing repairs.  

I also just realized I forgot to factor in closing costs. Would I factor that into the cap rate as well, or just the CoC? I think you may have missed the part where I calculated the cap rate... or did you mean that I calculated it wrong?

I couldn't figure out what the water, sewage, trash, and utilities would cost.  How could I find this information, and how would I know who pays it?