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All Forum Posts by: Evan Thomas

Evan Thomas has started 7 posts and replied 54 times.

Post: 2-flat -> Am I Missing Something?

Evan ThomasPosted
  • Rental Property Investor
  • White Plains, NY
  • Posts 57
  • Votes 39

Those numbers look good, but if it's a true C area you might not always be able to count on having reliable tenants, and the next two groups might ruin that $500 cash flow. You'll want to see what the actual expenses are by asking the tenants if possible (for the most accurate analysis), but it looks like a pretty solid first look at this stage. 

Post: Expenses

Evan ThomasPosted
  • Rental Property Investor
  • White Plains, NY
  • Posts 57
  • Votes 39

You shouldn't get into a dream because you think other deals can fix it. Every deal you do should be making you money. You should research hourly rates for lawyers in your area and then use BP to see how many hours of their time you'll need to factor in that expense. You shouldn't need an accountant right away, just like excel instead of QuickBooks you can defer those costs until you have too many properties to handle in excel. 

Follow the forums, always make your money when you buy (don't think you'll always make money in real estate if you buy now and hold it for a while unless you buy it under its intrinsic value), and make every deal count. Then you can add in expenses like QuickBooks and BP pro memberships when they are the only way to unimpede your deal flow. 

Post: Please help me pick apart this private real estate investment

Evan ThomasPosted
  • Rental Property Investor
  • White Plains, NY
  • Posts 57
  • Votes 39

There are 1,000 ways to invest in real estate, you might not ever know if you let analysis paralysis settle. If you don't want to do a BRRR, a flip, or do any of that side of the work yourself, you can still invest. You can invest with your friend at 7%, you could find a hard money lender and invest with them, or you could find someone who is flipping or buying & holding and invest directly with them as a private investor.

A good way to figure out what to do is to write down what you are and are not comfortable with doing, and you'll be able to cross a lot of investing vehicles off your list. 

Just remember that the less involved you are, typically the less return you'll make on your investment. You are most likely the most dedicated to your own earnings, not another person investing your money for you. 

Another point of view would be for you to market for a deal that you can fix up and hold, which would give you the knowledge you need to tear apart deals that other people bring to you (if you want to be a private money/hard money lender or RE investment group investor). Once you've done a deal you'll be able to discern the good deals from the bad deals more easily. 

Post: Percentage of Homes Affordable to Teachers in California

Evan ThomasPosted
  • Rental Property Investor
  • White Plains, NY
  • Posts 57
  • Votes 39

If you are in Brentwood it looks like you're in a better spot to find deals than on the coast. Do you focus solely north, south, and east of where you live?

Post: A seemingly absurd amount of 1.5%-2% properties in the area?

Evan ThomasPosted
  • Rental Property Investor
  • White Plains, NY
  • Posts 57
  • Votes 39

Be sure to check the comps on rents, expenses, and purchase prices in the area. You should look for solid proof from other investors, actual tenants, property management firms in the area, and realtors to confirm that you could really get those rents, what your likely monthly expenses would be, etc. You might also be in for a surprise when you go through the inspection, the properties might have more issues than you're currently imagining (rot, foundation issues). 

Post: Options in my position

Evan ThomasPosted
  • Rental Property Investor
  • White Plains, NY
  • Posts 57
  • Votes 39

In response to your first question, there are a lot of ways to finance a deal. As a newer investor the FHA or traditional 20% down loan would probably be the easiest and cheapest, but you can also look for:

A hard money loan

A private investment from friends/family/local person with excess cash sitting around

Or you can ask the seller to do seller financing. 

Those three are generally more expensive because they have a higher interest rate than a Fannie Mae or Freddie Mac loan, but they can usually give you a higher amount of investment capital as long as you have a good deal. 

Post: Raising Rent

Evan ThomasPosted
  • Rental Property Investor
  • White Plains, NY
  • Posts 57
  • Votes 39

You can also tell them that your costs for maintenance and capex increase every year, and unfortunately it's part of the business that you have to pass on those costs or you wouldn't be able to provide housing at all. 

Post: Another Crash 2017?

Evan ThomasPosted
  • Rental Property Investor
  • White Plains, NY
  • Posts 57
  • Votes 39

If you've read or watched The Big Short, you'll notice that for most downturns the reasons aren't apparent until after the crash. That's been the case for pretty much every market crash of every kind throughout history: Things seem to be better than ever, then all of a sudden it blows up. 

I have a theory, but I don't have the data to back it up yet. I think that something will cause rents to fall, which will destroy the investors who have been leveraging as much as they can at 3% interest rates to get $100/month/unit. Imagine you have 100 units leveraged up that rent for $750/month and give you cash flow of $100/month. What if all of those rents fell to $650/month, or $550/month? Then imagine that you can't sell your 24 4-unit buildings because 1,000 other investors are trying to get rid of theirs because they're facing the same issue. BiggerPockets is a great community encouraging REI, but I think a lot of the new investors are overlooking the pressure of falling rents.

The final piece of the puzzle would be: some shock to cause rent to drop across the board, which would probably accelerate quickly. It could be millennials moving home to cut costs, adults sharing single family homes to cut costs, macroeconomic fright of some sort, etc. 

What do you think? 

Post: 5.6 million cheap apartments - not for long

Evan ThomasPosted
  • Rental Property Investor
  • White Plains, NY
  • Posts 57
  • Votes 39

Great article, thanks for posting it! It will be interesting moving forward to see how/when units are added to the national stock. There seems to be some unreasonable group of factors that are forcing builders to only add housing at the very top of the rent scale. My question are:
1. What factors are causing the issue of high building prices?
2. Which of those factors will change in the short term to make more construction feasible?
3. Could there be an unforeseen drop in rents, and what would be the impact on over-leveraged investors who have 50 units which originally cash flowed $100/month, but after a rent shock sets the investor back $100/month instead?

Post: Realtor Recommendations

Evan ThomasPosted
  • Rental Property Investor
  • White Plains, NY
  • Posts 57
  • Votes 39

If you haven't already started to network at REIAs and meetups in your area, I would highly suggest it. Other real estate investors will know the best agents in your area, and they will be more than willing to give you an introduction. 

I've also found that when I see an interesting property on Realtor.com or Trulia.com, and I reach out to an agent telling them "I work until 5:30, please text or email me if you'd like to get in touch before my work day is over" and they give me a call, I can pretty much screen them out right off the bat as they haven't followed the single instruction I've given them. 

I'm definitely interested in other ways to find agents though, thanks for asking the question.