All Forum Posts by: James Wilcox

Quote from @Emily Wolters:

Me 21 and my husband 24 are looking to start investing in multi family, our plan is to buy 3 or 4 unit properties, live in one unit and rent out the others one year at a time until we have a cash flow good enough to quit our jobs and have children. I’m just looking for tips from people that have kinda been in my same situation and might have some advice for us. Thank you!

Some good advice on this forum for you @Emily Wolters. HH is the one if not the best way to get started. Although 3/4 units sounds good and best on paper in reality it can be tougher to pull off. Likewise, please don't rule out SFH used as a HH or being more creative in your approach. HH isn't just MFH properties.

@Robert N. & @Emily Wolters I would love to see what you are doing with REI! DM me and maybe I can help you reach your REI goals.

Quote from @Jordan Schneider:

Hey Aron, fellow New Yorker here who has had a ton of success outside of NY in Kentucky.  Hard to find good deals up here and lets not even get into the issues of tenants who default. Would be great to connect.

That in Lex? I would like to know more about your Bluegrass State REI.

Quote from @Alecia Loveless:

@Elijah Rotenberger Hi Elijah. The more money you can save up the better. Personally I like investing in my own home market because I feel like it gives me an advantage in that I’m more familiar with the going’s on in and around the area. I’ve looked into some out of state markets that everyone claims are cheaper but I’ve never found that to be true once I’ve done some research. Also I figure that if I account for the difference in the cost between losing a little here and there because I can’t keep as close of an eye on things and have to rely on the “honesty and integrity” of contractors I’ve never met then I figure it’s just best to spend a little more to invest at home than in some out of state market.

One thing the other posts don’t mention is that if possible you should start going to as many real estate investing groups and meet and greets as possible to start learning and meeting people. These are often either free or have a small membership fee or a nominal cost and you can meet great people and often source some great deals and get the names of good connections at these types of meetings.

Spot on advice.

Quote from @Nick Lucas:

One year ago I purchased my first rental, house hacking a 4000 square foot duplex. I am looking into getting my second one here soon and need advice. I believe I have two options.

Property Info:

Purchase Price: $365,000

Current Loan: $329,000

Interest Rate: 5.7%

Mortgage:$1900

PMI:$130

Insurance:$157

Taxes: $320

Current Rent Left: $1200 (Market $1400)

Current Rent Right: Owner Occupy (Market $1800)

1. Option 1. Save and pay down mortgage to 20% equity ($292,000). This would be about $40,000 and would take approximate 8 months to accomplish. On top of the 8 months I would need another year or so to save approx. 30k for a down payment on the second property. Bottom line would have me cash flow $800-$1000 after all said and done.

2. Option 2. Refinance to a conventional loan.

Use approx. 6 months to save for down payment and look for the next property to house hack. Bottom line this would cash flow around $400 a month. Much less than option 1, but much quicker timeframe.

@Nick Lucas I agree and think @Jason Wray gave you some good advice. Refinancing doesn't seem like a good decision to me. Although that money would be tax free it puts you in a tougher position down the road and you may even have to do a cash in refinance depending what your property appraises for. Without details on the property's current value or the purchase date, let's assume it's appreciated since then though. No one ever wants to do a cash in refinance but IK Lexington fairly well and that maybe the case here.

However, there's a third option that I believe is more favorable. Consider obtaining a Home Equity Line of Credit (HELOC). This approach allows you to access funds in the property swiftly, at little to no coast, and without committing to additional debt. You have not identified your next property yet so why pay interest on that money? This enables you to stay in the duplex while accruing savings and keeping your own living expenses lower. Moreover, staying for another year can help you avoid capital gains tax if you decide to sell upon moving out within 5 years of leaving the property. In my opinion, this option surpasses the two you've proposed. Remember to use the HELOC responsibly of course.

Quote from @Elijah Rotenberger:

I just recently turned 18, and was wondering if I could get some advice on the best way to begin investing in rental properties. Here are a few of my questions:

- How much money should I save up before starting to invest in properties

- Is there a market that would be best for someone such as myself, or is it just personal preference

- Do I need to hire people such as agents, contractors, property managers, etc. or will that all be later on once i build up my portfolio

- When is the best time to begin purchasing?

- What should the desirable mortgage/rent ratio be for my properties

- Should I begin saving up an emergency fund for repairs and maintenance before I actually purchase a property or should I begin doing that once I own a property

- Do you think Louisville, KY would be a good location to stick with, or should I look for a new area

Thanks in advance for your suggestions!

@Elijah Rotenberger Hey there, it's awesome to encounter another Kentuckian on BP! Even better to see someone keen on diving into investing early on. Time will definitely work in your favor. I wish I had BP at my disposal when I was 18! Here are my responses to your questions from the Bluegrass State perspective.

1.) This depends on what model that you go down. Of course, the more the better off you will be. IK that sounds like a cope out answer but saving is part of the journey of REI. Start that now and do as much as you can. Always have the nest egg growing and ready.
2.) The "best" market is your own backyard or the one you can build the best team in. Invest where you have the most market knowledge or where you can rely on quality team members to inform you properly.
3.) Always hire professionals. However, you can fill in that team as needed along the journey. I would start with a good lender and agent though and go from there. If you want any help in that department you can DM me. ;)
4.) Time is your friend but as soon as you can.
5.) Depends on the model you go with and the quality of the asset. Some people have used the 1% rule in the past for long term rentals. This is a case by case so set your own metrics and try to find properties that meet your own standards.
6.) Yes.
7.) It can be if that is what you know and can find good team members in.

You should be engaging an lender now to get a pre-approval. Also, start by assessing your own living arrangements. Are you currently renting or do you own a home that serves as your primary residence? If you're renting, it's time to explore house hacking as a strategy. And if you already own, consider implementing house hacking techniques. Begin with this foundational step, and the rest will naturally align.

Quote from @Ethan Robert Millay:

Quote from @Jeremy Jareckyj:

Quote from @Ethan Robert Millay:

I am looking to buy an start an airbnb in Louisville area. Any and all advice will help!

I would use the BP agent finder to see if you can find an investor agent who specializes in STR in that particular area! a good agent can help steer you in the right direction

Thank you for your reply! I've been using it without to much luck. I have also put a request for a realtor on airdna!

AirDNA is only for STR rental data. It doesn't have MTR data. I do hope a MTR 3rd party data company comes along. FF isn't really cutting it. Also, how do you request a realtor on AirDNA? I have never seen that.

Quote from @Zach Edelman:

Go on Facebook or BP and find an agent that specializes in STRs in KY. I actually have one for you that can probably assist if you need a referral. LMK!

I would sure hope that referral is me @Zach Edelman. :)

Quote from @Samson Hall:

Hey everybody, I’m getting out of high school and looking to do my first deal. I’m looking to do section 8 rentals in the rust belt, states like West Virginia and Ohio, Although I live in Florida. Not looking for concessions here just seeing if anyone has experience in that field. Although I’d like to do a large dscr loan and get 4 to 5 three and four bedroom units, I’m likely goin to start with just one quality property in order to establish proof of concept to present to future down payment partners or private money lenders. If anybody’s got advice I’m here to learn and listen, thank you!

@Samson Hall I agree with some of the concerns that Jonathan has brought up. S8 isn't for everyone and does have draw backs. However, as you pointed out it does have advantages. You have done some homework and I applaud that. 

Now that being said I kind of doubt your numbers are correct on your example. I really doubt with a DSCR loan your monthly cash flow is that on this example property. I would maybe even wager you are negative or break even just looking at cash flow. FMR displayed on the HUD site is with utilities included. That would cut into your expenses a good amount, add property taxes, insurance, property management, repairs, capex, and a small vacancy rate and you can see that number starts to go down rapidly. Best thing to do is to call the local housing authority and they can explain some numbers for you and the process (assuming you can get ahold of them).

You could always just post the numbers here or in the proper forum and double check it.

Quote from @Eric Gonzales:

Hi James Wilcox, How is the STR market near the Red River Gorge? How has the occupancy rate been for you and Avg nightly rates?

That is a pretty loaded question and depends more on the host and the specific property in question. Third-party data supports the theory that the RRG area stands out as one of the top STR markets nationwide. This comes largely because of high demand, limited supply, and favorable property purchase prices in Kentucky. However, over the past five years or so, increased national attention has led to a surge in supply, thereby putting pressure on occupancy rates, which might hover around 50% annually. ANR depends on individual properties and their amenities.

Should you have any further questions, feel free to direct message me. You can also explore my profile and see that I specialize as the go-to agent for furnished rentals and investor-friendly properties in the state. I really doubt many would dispute that claim here.