All Forum Posts by: Grant Diggles

Hello there @Sunshine Bizz . There are a variety of great options and strategies that can help you accomplish your goals that are better than banking on appreciation. While appreciation is a great benefit of real estate investing, is only one of several benefits that make up the total attraction of real estate investing. 

Cashflow is real money, while appreciation is theoretical until realized. I would be looking for properties that give you the best of both worlds if you can, but I've found that places appreciating at higher rates don't typically cashflow really well and vice versa.

If you are prepared to put 25% down on $150,000 properties, you might want to consider the midwest where you can buy more homes, diversify in multiple areas and get into real cashflow with a longer hold strategy. Have you considered the BRRRR strategy?

Cheers, and happy investing.

@Nathaniel N. , I agree with Larry. Typically, these property price ranges suggest lower income areas associated with C- and D class areas. But who knows, maybe its a good find?

This is what we recommend our investors consider when looking at these types of deals:

1. Who is the builder and how many properties do they develop each year?

2. Since they're the PM, how many do they manage and what are you getting for 8% or $60/month? (this is a little lower than the standard 10%)

3. What have they ACTUALLY done to the house and what can they provide as proof?

4. Does the home come with any warranties on the work or rental income for a period of time?

5. Are you willing to fly out and view the property? You should.

6. Has an appraisal and inspection been done on the property?

The list goes on, but you get the idea. Let me know if I can help any way.

Cheers,

Hey there @Frank Contreras,

Given that you don't have much money for a down payment, your options are limited (which is probably why many of the post-crazed turnkey providers aren't posting here). A couple questions:

1. What's your relationship status. Are you married or single? Your profile doesn't say.

2. How did you get into your first property?

3. Is your "cash out" number the result of a refinance on your first property? If it is, is that an 80% LTV cash-out?

Your relationship status will outline how much freedom you have to be creative with your living situation to free up money or make additional income. If you're single, you have more options. Married with or without children is more limiting.

Knowing how you got into your first property helps. Did you save up and make a down payment? Did you get in before 09' with no money down? Did you inherit a little cash at some point? Did you inherit the property?

If your "cash out" number is based on 80% LTV, then you have more to work with. Are you willing to forgo your current property to get into a situation where you can house hack? Looking at a duplex option where you live in one side and rent out the other is a great way to increase your ability to save quickly while still having an asset.

Just some thoughts, but don't hesitate to hit me up if you want to connect over this.

Cheers, and happy investing.

Its a tough question. Appreciation is a theoretical number until you actually realize a return via a transaction. So, if I'm understanding you correctly, I would be VERY conservative about comparing property appreciation to your day job of $155k. One is income, the other is appreciation and should not be considered a reliable source of future income. What happens if Seattle cools off dramatically?

Sounds like you have a great job at $155k and I would continue that for as long as you can stand to. 

I live in Portland, OR and we are starting to experience the crazy appreciation rates that Seattle has enjoyed for several years. I am selling my rental property here in Portland as we speak to realize the currently inflated rates. A SFH ranch style home built in 1974 is expected to go for as much as $420k, which in my opinion is great but also a little ridiculous. Will it continue to go up? Maybe. Are we overdue for a major market correction and, most likely, a Bear market?... yup. We're overdue actually. I will be reinvesting in the midwest where I can experience great cash-on-cash ROI and stretch my dollar even further while protecting myself in less inflated markets where appreciation is realistic (2-5 percent a year).

My opinions go much further than this, but are only opinions.

PM me if you want to talk further...

Good luck to you sir. I don't profess to know much as I'm in the same boat as you here in Portland.

Cheers.

This is why I love BiggerPockets. Log in and learn something new immediately. I use Square Cash App with all of my tenants to complete rent transactions each month. Works similarly to a Deposit Only Card from a smartphone but allows the tenant to pay with a variety of options. It works great for me and my tenants, but your situation may be different enough that this app isn't as comprehensive as you may need. Square Cash - Send Money for Free by Square, Inc. https://appsto.re/us/JJXBQ.i Hope this helps.

@Denny Moody, @Jeff Wallenius makes a good point. You may want to considered the BRRRR method to reach your real estate goals. Using this method you can possibly move much quicker in getting where you want to go while maximizing the use of your cash. I'm surprised this hasn't been mentioned more in this post yet. Ping me if you don't know how this strategy works and want to understand how it might be a good fit for you.

In consideration of more traditional turnkey options both @Engelo Rumora and @Tom Ott both offer unique solutions that may be a good fit.

Happy Investing

Hey there @Marques Johnson, what do you mean by high end turnkey rental properties? Price range? Expected monthly rent? We work with groups that offer brand new homes that are priced to qualify as turnkey homes and come with warranties. Unfortunately, they are not located in the Fairburn area, but that's what I would consider more of a higher end turnkey solution. Let me know if there's anything I can do to help out.

Happy investing.

@Aaron H., that sounds like a whole lot of "nope" right there. While turnkey real estate investing is a very viable and established means to invest, trends will tell you that you can reasonably expect 9-15% returns on most turnkey investments. Some go even higher, but they become very rare as the percentage goes up. 40% would seem impossible within the realm of traditional turnkey investing.

If you're looking for viable strategies to creatively invest in real estate please feel free to reach out and I'd be happy to discuss... but approach this 40% deal with extreme caution.

Happy investing.

@James Denon Looks like you have your hands full in this post. The BRRRR method is great if you:

1. Work with a reputable Provider
2. Have work/property warranties
3. Receive 1st-hand management on the property
4. Use someone who lives locally in the investment area
5. Has relationships with banks who know the system
6. Can provide you with a track record

We work with turnkey providers and BRRRR specialists who MUST meet all of these criteria for us to work with them as we invest personally as well as our North Peak fund; covering turnkey, BRRRR and flips.

Happy to help if you want additional info.

Good luck and happy investing.

@Chris A. Very good. I think you'll be able to find opportunities through most of the midwest that will perform similar to or better than Birmingham, so I'd say you're on track. Sounds like you're taking care of business though. Let me know if I can be of any help as you move forward. Congrats on getting started!