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All Forum Posts by: Hunter Reed

Hunter Reed has started 6 posts and replied 117 times.

Post: What's the largest total NOI you've heard for any investor?

Hunter ReedPosted
  • New to Real Estate
  • Texas Christian University
  • Posts 118
  • Votes 56

A man from California once told me he bought a 3bed 2bath 1500 square ft home in San Diego in 1996 for $250,000. That property is now worth 12 million dollars. This is a great example of you make money in real estate when you buy! Appreciating asset grows in equity. 

Post: College Student wanting to get into house hacking in Colorado

Hunter ReedPosted
  • New to Real Estate
  • Texas Christian University
  • Posts 118
  • Votes 56

Tucker, congrats on taking that first step in real estate investing! Im a young investor just like yourself, getting started now will allow you to become financially free sooner then never. Get a credit card build up your credit. Save up cash for a FHA 3.5% down payment, based on your market will determine the money you should save for a down payment. Look for the biggest multi-family property that makes the most financial sense to invest in. Even if you are not cash flowing immediately you still are paying a significant amount less on your mortgage by having the other tenants pay off the rest. Make sure the multi-family property will pass a FHA inspection. (Talk to your lender) Remember once you have established residency for a year you can move out and start the same process over again. By doing this your first investment will likely cash flow because all the units are occupied by rent paying tenants. Make sure you have enough cash reserves for unexpected vacancy. Let's say you purchase a 4plex for your first investment and your second investment is another 4plex, now you are up to 8 units in 2 years! It gets even better. As rates slowly come down overtime look to renovate the properties so that you can refinance and pull cash out. You'll also be getting into a lower interest rate. After the rehab and refinance period look to raise rent to further create more cash flow. This is what I would do. Hope this helps. Good luck on your journey!

Post: Setting up LLC out of state

Hunter ReedPosted
  • New to Real Estate
  • Texas Christian University
  • Posts 118
  • Votes 56

Karthik, Let's say that I have 3 houses. The first house (house #1) is owned by LLC #1, the second house is owned by LLC #2, and the third house is owned by LLC #3. If a tenant slips and falls at house #1 one and sues LLC #1, my properties owned by LLC #2 and LLC #3 are protected from that lawsuit. Aside from the extra liability protection I also like to keep my books in my finances extremely organized.

For each LLC that I form I also have a new EIN and a separate bank account.

That means all of my income and expenses for each property sits within its own bank account and therefore is very easy to see which property is more profitable that the others, pay bills, and manage finances.

If on the other hand, I had one LLC that owned all three of the properties I would have to rely on my bookkeeper and/or my property manager to differentiate which property brought in income and which expenses were attached to each property. This makes both keeping and finances a little bit more cumbersome.

Post: Is contacting my tenant a bad idea if I have a property manager ?

Hunter ReedPosted
  • New to Real Estate
  • Texas Christian University
  • Posts 118
  • Votes 56

Gurjot, congrats on your first remote investment! You are defiantly asking the right question. If I were you I would contact the tenant so that you can slowly build a relationship with them. Ask them if there are any problems with the property and address your question about the PM. If the PM is not doing there job find someone who can.

Post: Depreciation calculation based on purchase price or recent appraisal price?

Hunter ReedPosted
  • New to Real Estate
  • Texas Christian University
  • Posts 118
  • Votes 56

Raj, take the purchase price and divide it by 27.5 years and you should get a relative amount that of which you can depreciate on your taxes. 

Post: First Investment Property

Hunter ReedPosted
  • New to Real Estate
  • Texas Christian University
  • Posts 118
  • Votes 56
Quote from @Breanna Bobadilla:

Hi BP! 

I am in the process of buying my first property in Philly using an FHA loan. I found a 2 unit property I liked in an up and coming area of Point Breeze. The prices for rent in the area is lower than I anticipated, but the area has been developing more and hopefully in the next year or so we will be able to increase the rent as the value of the area starts to go up. Would it be a poor investment to start off with a negative Cash on Cash return? I am very new and trying to navigate the waters, so any insight would be great!

Thank you!
Breanna 


Just because there is negative cash flow does not mean it is a bad deal. David Greene talks about this all the time. If you are planning to purchase a duplex with a FHA and live in one unit and rent out the other you are more than likely not to cash flow. You are however paying less on your mortgage which is a win. And after you have established residency for one year then you can move out rent both units and then began cash-flowing. You can repeat the FHA loan as many times as you want as long as you don't have kids or get married. Good luck on your journey!

Post: My first rental property

Hunter ReedPosted
  • New to Real Estate
  • Texas Christian University
  • Posts 118
  • Votes 56

Jamal, with this being your first investment be careful. You will be calculating PM costs. Properties that are rent ready are very expensive especially multifamily. I advise you to House Hack your first investment. This way you will have a better understanding of how managing tenants work. You will also be using the other tenants money to pay down the mortgage every month while you live basically for free. Overtime you will create equity and be able to use that for more investments. California is an expensive market. if you have the cash I would find an experienced partner with someone before buying out of state. You'll learn more quickly and be less stressed. 

Post: Know any Property Managers?

Hunter ReedPosted
  • New to Real Estate
  • Texas Christian University
  • Posts 118
  • Votes 56

AJ, contact every apartment complex and multifamily property and give them a quote. Get on google maps, find the address, search it in the counties property finder, and reach out to the owner directly. Do this as many times as possible. Call other well known PM's and ask them there pricing. That will give you an idea of what to charge at a competitive rate. Good luck!

Post: Finding MTR tenants

Hunter ReedPosted
  • New to Real Estate
  • Texas Christian University
  • Posts 118
  • Votes 56

Doug, get in contact with the housing directors for the hospital. Once you reach out to the HR department ask them which travel agencies they are working with. More than likely these agencies are working with multiple different hospitals. Build a relationship with the recruiters and they should gift you withe MTR tenants consistently. 

YOU NEED TO LISTEN TO THE BIGGER POCKETS PODCAST #728 it will answer all your questions.

Post: Purchasing home in Oregon

Hunter ReedPosted
  • New to Real Estate
  • Texas Christian University
  • Posts 118
  • Votes 56

Jacob, thank you for service and congratulations on your other investments. If I were you I would look at all possible solutions. The first solution that I would seek out is to use the FHA loan and look for ways to turn a basement or garage into a unit. Make sure your budget allows you to do this. Rent out the backyard/yard for trailer/RVs. Think of as many creative solutions as possible. Another possible solution I would pursue is the equity in your other 3 investments. You could acquire enough money to put down on a bigger investment which would allow you to rent more units while living in one. Don't be torn. I would ultimately utilize the FHA loan to fund a property while simultaneously looking for other ways to creatively add value to pay down the mortgage. Good luck on your journey.