All Forum Posts by: Jacob H.

In reality, she was actually afforded a pretty amazing opportunity that your dad provided by not raising rent and keeping it so low. I'm sure a lot of people would've killed for that opportunity. Sure, she won't be happy about it since her luck ran out but at the end of the day, you have a business to run and not a charity. If she's not willing to pay the rent then she'll have to look elsewhere.

If you want to give her an additional courtesy, you can give her some additional time to find a place by providing more than 30 days to vacate.

Freedom and time are great. But for me, real estate will help me buy a nice house and cool toys of my own. Working a W-2 job as a decision rather than a requirement is another bonus.

Look at similar multi-families in the area, see what the size of the units are, the amenities they provide, how nice the units are, etc. What are they renting for? Now compare it to yours and either provide something nicer or cheaper. If you have a property manager, it is their job to determine the market rent for your type of property, depending on how it compares to other properties in the area. 

Just like any business, either make your product better than the competition or cheaper. Renovations and working appliances are always a plus.

As others have mentioned, you may benefit from an FHA and house hacking where you live first. This will reduce risk and increase the probability of positive cash flow. I'm not sure what your timeline goal is in terms of how many OOS properties you want to close on within the year. Just know that you'll learn a lot from the first property and it's not a bad idea to wait a bit before you buy the next. This way, you have time to apply what you've learned rather than making the same mistake you didn't know about on multiple properties.

For OOS properties, it is absolutely crucial that you find a strong PM since you won't have the luxury to check on the property yourself whenever you feel like taking a quick drive. With that said, there's nothing wrong with investing OOS if you feel it's a more desirable investment location compared to where you currently reside.

If you're trying to use your own money and not syndicating into a large multi-family commercial then as others suggested, the best route is likely to purchase small multi-family properties for now, grow using that strategy, and then use those properties to purchase the larger commercial property. Naturally, the 1-4 units will have less of a down payment, especially if you're using FHA. As you accumulate appreciation, equity, and cash flow from these small multi-family properties, at a certain point you'll be able to refinance, sell (1031, ideally), and/or put the cash flow towards a commercial sized property.

Putting more cash down may reduce the risk of hardship but will slow down the rate of scaling. If you want to maximize growth, you'll want to utilize leverage. It all depends on your risk tolerance.

One of the best ways to get into the real estate investment game is to house hack, as already mentioned. Risk is reduced in the fact that if the income from the tenant doesn't work out, you are only paying for your primary residence, since you have to live somewhere anyway; in this case, you really have nothing to lose because you still enjoy principal downpayment, appreciation, and tax benefits. On the opposite side of the spectrum, if the house hacking with the tenant does work out, you are significantly reducing your mortgage payment, adding to the overall benefits of home ownership. You'll learn a lot, save a lot, invest a lot, and finally will be able to continue to scale your investments by purchasing another property (once you have gotten over the trepidatious stage).

Congratulations! I know some areas are more difficult than others to get approval. It looks like you have nice, professional looking photos as well; that's crucial to attracting guests. I'm not sure if this is your first STR or not but if so, have fun with it and learn a lot - you'll experience all types of guests.

Just as others have said, use the forums and podcasts/books to accumulate a good deal of knowledge first. Many investors get started by first purchasing their own primary residence and turning that in to an investment. In many cases, this is more realistic if you are looking to start but don't have a large sum for a down payment. an FHA loan may be something you'd want to look into as the down payment can be lower than a traditional loan of 20-25%.

Everyone needs to live somewhere so you can purchase your primary residence, live there, pay down principal, and enjoy appreciation/tax benefits. While you're at it, rent out a room or two, or even use a hosting website like Airbnb or VRBO to make additional income from the house. Live for free and maybe even make some cash flow from it. Considering all of these combined factors, you are setting yourself up for success in expansion with real estate, all while building wealth.

As others have already mentioned, if you plan to sell, make sure you have a deliberate plan and reason for it. If you are happy with the continued appreciation and rental income, why not hold it? After calculating the COC return and total ROI, you'd be able to get a better idea of if you should place your money elsewhere to get a larger return. Even if you choose this strategy based on the ROE, you should consider doing a cash out refi (again, as others have already mentioned). This way, you could hold the property and invest in another at the same time.

Of course, it depends on your risk tolerance as well. If you are losing sleep at night thinking about being leveraged with a cash out refinance, it may be better off to choose another strategy.