All Forum Posts by: Grant H.

@Mike M. The stock market can be a great option for the long term. Investing through Vanguard and purchasing an index fund can eliminate almost all fees and has been shown to beat most experts. We all know past performance is not an indicator of future returns, but a conservative 8% per year that is compounding is surely not something to brush off.

@Jay Hinrichs Really enjoyed the episode! Ole real estate junkie sums it up pretty well. Timber story was my favorite, successfully taking advantage of a niche you found. Also enjoy sports, fishing, and flying.

I am a recent graduate and work full time as a drone pilot for a utility company (enjoyed your TFR reference), have cash in the bank and no debt. Right now I have a high risk-tolerance and little to no commitments. Should real estate be my focus for building long-term wealth?

If so, where should I focus my education efforts? A specific niche or more general knowledge? After listening it seems my focus should be more location-based then anything. 

Thanks

A general point I do not believe this is or could be a good deal at the current price, just looking for feedback regarding how I evaluated it which you all have given, much appreciated.

@Jay Hinrichs Agreed seems like house hacking is the best option to start, will have to listen to Ep. 222 and learn a little bit more about you!

@Tyler Jahnke Good point regarding tenant paying utilities, definitely adds up. Also will be going back to the numbers to see what price point would make this a good deal. Thanks for the feedback.

@Sam Hickey Thanks for the additional info, I was browsing a bit on the USDA site but since their properties are mostly in low population areas I believe that wouldn't be great for downtime getting a tenant in. Good point on the taxes will make that adjustment going forward, and makes sense regarding Zillow/Missouri beef because the Zestimate seemed to be pretty off.

@Sam B. Have some good friends in the Indy area from school, great to hear you are hitting developing areas. I will have to have my lender double check the loan requirements, I believe if I lived in the property I still could do a conventional for 3% down but either way could do FHA with 3.5%. Agreed not a good deal, will have to start looking at other areas and lower price points... Just slightly limiting myself as I prefer to live close to work as the occ requires, but would rather have some extra drive time to go along with some extra cash.

Originally posted by @Jay Hinrichs:

are you quoting a owner occ loan not an investor loan I have not heard of any investor loans with 3% down.

 I actually have an email into my lender to check on this, I agree though assuming it is an occ loan. Evaluating the deal with the idea that I would move out after a year if that makes sense...

In the spirit of the latest BP podcast, I am curious as to how I evaluated this deal incorrectly. Find it entertaining the description lists it as a great investment property yet the numbers don't add up (8 Valley Rd, Saint Charles, MO 63303 - MLS#18003358). Here was my thought process on the different categories with a screenshot of the summary below:

Property Taxes: Last property taxes on Zillow was before this unit was renovated when it sold for half of what it is listed for now, so doubled property taxes.

Purchase Price: Listed at $155,000 and has been on the market for a while. Knocked off $5,000 and also would plan to have the seller cover all closing costs.

Repair Value: None, as this is a recently renovated property. Seems that one can find a better deal when the property does indeed need renovation. Also an area my estimation skills need to be critiqued. 

Loan Details: Pre-qualified for a $150,000 30 year conventional loan with 3% down, 5% interest rate, $95 PMI, estimated $100 insurance. Could also do an FHA loan with similar terms and use a 203k for renovations but would need to live in for a year which I am not opposed to, would also need to refinance after 20% paid down to get rid of PMI on FHA loan.

Monthly Rent: Simply compared to listings on Zillow which average $750/month. Took it down to $700 a month for some breathing room.

Fixed-Landlord Paid Expenses: Did my best to estimate through Google can see in the screenshot below. Would plan on having tenants pay electricity.

Variable-Landlord Paid Expenses: Did my best to estimate based on BP articles and research. Vacancy - 8%, Repairs and Mait - 10%, Capital Expenditures - 8%, Mangement Fees - 10%

Future Assumptions: Did not assume any appreciation over expenses, would be a nice plus but want the deal to be able to stand on its own without appreciation.

Thanks!

Grant Hosticka

@Ken Nyczaj That Kitchen before and after is awesome, great work!

@Courtney M. I have started taking notes on my phone when listening to podcasts, there is really no other way to remember all of the great information that is shared! At least through the podcast app on the iPhone, you can pause and jump back 15 seconds fairly easily which helps when trying to write stuff down. 

@Anthony McEvoy Ironicaly grew up right next to St Charles IL and now live in St Charles MO. It’s funny the similarities between the Missouri and Illinois versions of St. Charles both have the big river and have development occurring. Appreciate the tips, hadn’t thought of the show notes even though that’s right in front of me.

Grew up in the Chicagoland area, big fan! I am a newbie as well, just read Flip Your Future by Ryan Pineda (was recently on the BP Podcast) and thought it provided a lot of good tips while being an easy and fun read. Best of luck moving forward.

Evening,

Hope everyone is having a great labor day weekend, have been using mine to learn about real estate, even tried finding and evaluating a property today. My name is Grant Hosticka recently graduated this spring from Indiana State with a degree in Unmanned Systems and a certificate in GIS and now work as a drone pilot for Ameren in the St. Louis/ St. Charles area.

In my first few months of adulthood have made a successful effort to spend less then I make and start to build my savings through following a monthly budget. I enjoy flipping different items (computers, cameras, shoes, tickets to name a few) and providing drone services as a way to earn some extra income.

I have little to no experience in real estate but after digesting many podcasts (how I heard of bigger pockets) and books post-graduation I definitely think it is something I need to learn about to start building wealth long-term. My goal is financial freedom, and being able to do what I want when I want. Few things I would love to hear from you (if applicable)...

1. Any questions about drones (or video making/editing) I might be able to help you out with.

2. Advice for a recent college grad... what do you wish someone would have told you?

3. If you're in the St. Charles/St. Louis area... Would love to meet up for a cup of coffee or some food!

4. Podcast Recommendations (besides the wonderful BiggerPockets offerings)