All Forum Posts by: Hurricane Hamilton

Hi all -- long time lurker, first time posting!

I noticed that many new out-of-state real estate investors have the same question: What city should I buy in?

I think there are a few useful tools to help compare houses once you've picked a city, but only vague rumors or opinions on which city is best to invest in.  So, I put together some data that maybe helpful if you are starting out, or perhaps even looking to choose the next city you buy in: 

https://bestinvestmentcity.com/compare

Right now its just a list of the top 100 US cities by population, along with some useful data about the real estate market in each.

Its a side project for me, so give it a peek, and let me know if you love it/hate it, and most importantly what I can do to make it more useful.

@David Moore I guess this how good this deal is does depend on how much of the utilities tenants can pay. The brick buildings are a draw for me as well. I will certainly put an inspection contingency in and offer I send!

@Ramsey Blankenship Thank you for sharing your experience and knowledge. What you say makes sense. I figure that most soldiers living off base probably wouldn't want these units.

@Jack Martin I've yet to see a new or even new-ish duplex in Killeen that seems interesting to me. It seems like better cash-flow on 3/2 SFHs that need a light rehab. PM if you want a realtor recommendation for Killeen -- I've worked with a couple there, but I really like the guy I'm working with now. 

@Doran Summers What is your biggest reason you've waited to pull the trigger on your deal? It seems like your monthly rents are a little better than this one

@Gus Ross I do believe these are studio apartments. How much higher do you think maintenance and capex costs might go on average? Obviously, we can't predict the future, but, what numbers might you pencil in here?

@Paul Parkanzky Thank you for pointing out that these apartments will need landscaping and perhaps utilities and trash -- those are exactly the kind of things that I was hoping someone would point out. I haven't contacted the owners yet to ask for any P&L numbers.

I have absolutely not secured financing, but was working with what I've been able to get for SFHs -- That makes sense that lenders might want a significantly higher down payment here. I'm still in the preliminary stages of figuring out how to get my first apartments. (Actually looking to purchase one more SFH before an apartments).

@Ramsey Blankenship I didn't realize that in this price range tenants would probably need to have utilities included, but that makes complete sense. I'll have to look at other rental listings in the area an see if they include utilities.

The employment driver in the area is the Fort Hood military base -- however, I assume most soldiers would rather live on base than rent apartments, so tenants may simply work on base or in surrounding town

@Josh Green A property that is a good investment including management costs is a requirement for me. I agree though -- that is a significant number, and may actually be higher than I've estimated

@Thomas S. I've heard both ways on s8 tenants -- It actually seems like a good deal to me, because the rent payment is mostly guaranteed.

This 8-plex is in an area where studio/1br apartments rent conservatively for $325 per month.
Zillow listing:

https://www.zillow.com/homedetails/1318-N-18th-St-...

Listing price: $119,000

Income:

Estimated Annual Rents: 8*$325*12= $31,200

Less 10% vacancy: $28,080

Expenses:

Taxes: $2285

Insurance: $2000

Management (10%): $3120

Maintenance (10%): $3120

CapEx (10%): $3120

Debt service: $6133 (30yr for $95,200 @ 5%) (20% down)

Total expenses: $19,777

Net Income: $8302

Per door per month: $86

I already own a duplex and a SFH in the area, and I want to diversify my income sources by investing in apartments. I want to buy and hold for rental income: Does this apartment complex seem like it would further that goals, or is there something I'm missing?

Thank you in advance for all opinions and advice!

Would a HELOC work for your purposes? I've heard of people using them for a down payment on a second property

How much equity do you have in the property?

@Matt R. Good suggestion - I enjoyed the episode that I chose at random

@Account Closed I've got a price ceiling of 20k

@Mark Gallagher Thanks for the thoughts. Would you suggest a flat per house fee, or an hourly rate?

@Jake Thomas Thats a good idea. My question is then: How can I write an offer contract? I'm not a lawyer nor a Realtor, and I wouldn't want to get stuck with a bad contract. Would you advise asking the listing agent to draw up the contract, and then just read it over?

@Alvin Neal Yeah, most of the cost to getting the property rental ready probably will be in the rehabbing step for a house in the 10-20k range. What sort of minimum price point would you set?

@Tim Reavis Thanks for the idea!

@Lesley Resnick Yeah, if I could purchase enough of them, that would be a good way to make it worth an agent's time. However, I want to start with one and see how it goes. I don't want to promise anything that I can't deliver! Thanks for the upside wishes

@Matt R. Yeah, it sure would be easier if I were local. Unfortunately my day job precludes this!

@Jake Thomas Good idea to call the listing agent who has multiple homes in the price range I want. Using that strategy, if I still wanted some help with the contract, do you think I could pay another agent a flat fee just for that service?

@Lara Krakowiecki Thanks for the tip about the FB group!

@Daren H. : Thanks for the overall thoughts and advice! I'm certainly planning on hiring a property management company to rent the houses: I don't think there is any way I could manage them from Texas. The other thing I've done differently to analyze these properties is to use a 20% vacancy rate to analyze rental income.

I'm certainly on the look out for Detroit investors on BP who can share knowledge! I'll try to only rely on family/friends for impressions of neighborhoods, and not for actual investment advice

@Maya Clark: Thanks so much for that information! Super helpful. I asked my question here on BP because the first agent that I talked to was not at all interested in finding a property in my price range. Taking into account the information you shared, I'll mention a flat fee with future agents I talk to, and keep being persistent until I find the right one.  

Hey Christian, thanks for the heads up about being careful! I used to live close to Detroit, and have some idea about the neighborhoods, as well as friends and family in the area to get second opinions about how good or bad certain neighborhoods are. 

That being said, being wary is probably sage advice that I will take to heart, no matter how good a deal a house might seem.