All Forum Posts by: Jaron Walling

@Charles Granroth You can learn a lot from real estate investing books. I'm about to pick up the Small but Mighty Real Estate Investor by Chad Carson. I've heard good things and I enjoy books that can actually benefit my investing goals. 

You can learn more in these forums. The reason my post and vote count is so high is because I continue to read, learn, and give advice when I think it's valuable. My wife and I are not experts, but I have learned so much from the forums it's insane. Our focus has been single family but knowing bits and pieces of other types/strategies of RE is massively important. 

You will learn the most by doing. Buy, rehab, and sell RE. There are no short cuts. If you find one you're going to pay for it, it's a scam, or a waste of time. I took the DIY remodel approach, rehabbed some houses, and understand the general costs to remodel smaller properties. I know the material costs for bathrooms, kitchens, plumbing, flooring, roofs, and painting. I call it cosmetic+. Labor is always tricky but you'll learn that too if you work with the same contractors over and over. It's the best way to find success in this business. 

Network. Attend some meet-ups and get people talking. See what works in your market.  

If you know some of the above it's probably time to jump in. Find/buy/create the best deal you can, follow a strategy, make realistic offers, follow a budget, and have reserves. That's all you can do. We can't predict the future and we can't time the market. 

@Jerry Zigounakis In this market the BRRRR strategy is pretty difficult. Higher interest rates and high prices don't go well UNLESS you buy the property right and most likely in cash. A few years ago investors couldn't miss. The market tail winds boosted the ARV, and interest rates were trickling down. It was a win-win. Today that's not the case. The FED is keeping rates high for a defense against against inflation, and what ever the president is doing with tariffs, stripping the government, DOGE, bla bla. It's not conducive for BRRRR.

What did you pay for the property? How did you create value? What's your estimated ARV or appraised value? Get any of those steps wrong and you're trapping cash in the deal. That's not a bad thing! It's just hard to recycle money into the next deal.

You could take the conservative route and pull little to no equity, play the waiting game, and wait for lower rates. You may not not recoup enough cash for reserves or the next opportunity. I don't recommend that idea. Cheers. 

@Peter Bendorf My brother is on track to become a commercial pilot and just passed his multi-engine rating test. Seems like a great career! 

Where do you live and do you own a primary residence now? 

Where are these properties located? How and why are you self managing if you're a pilot? That sounds like a massive headache if you travel a lot for work. Rental management is easy but it's not passive. It still takes up your bandwidth and time. It may not be the best use of your time. Something to think about in 2025. 

Rent by the room and house hacking is "fun" for about 12 months. RBTR is management intensive (tenants coming and going) and house-hacking is great if you don't have kids and don't mind living next to tenants. Generally speaking it's a newer investor/ first time buyer strategy. You have three properties so I'd think you're beyond exploring those.  

I'd be aiming to BRRRR (some cash in the deal) or flip RE with your cash or a partner in 2025.

Find out as much information about the HOA as possible to determine if you want to close or not. Some are ran great and proactively maintain properties, others not so much. That roof needs replaced because it's going to start leaking again. Just a matter of time.

@Stone Pittman Sounds like you guys are on the right path and giving every dollar a purpose. I'll tell you from experience KEEP DOING THAT. Stay on a budget and keep saving for DP and renovation budget. 

Research, run numbers, and learn to BUY RIGHT. If you want to live-in-flip you need to buy a mildly distressed deal ideally below market. I negotiated $23k below asking when I bought my first property because it was distressed. I offered $25k below asking. My agent didn't question me. Don't be afraid to shoot low and negotiate. I used a conventional, 5% DP, and the rest was spent renovating the property. It was move-in ready but terribly ugly with a leaking roof. I lived there for two years and now it's a rental. 

Start watching YT renovation videos and learn what it takes to renovate, and estimate costs. HGTV is not your friend. They gloss over the $$$ and costs for labor. Try estimate renovation costs for a flip or house-hack combination. You need this when you make offers on houses. If you know any contractors pic their brain on labor costs. I spent $17k on first remodel (unbelievably low for today), but I also did some projects my self. Realistically it would have cost me $25-30k. I didn't have that money so I had no choice. 

I never sold the property so we haven't realized any gains. My 2 year capital gains tax exclusion is long gone, but I couldn't be happier. The long term wealth, easy maintenance because I replaced most things, and cash-flow has been good. Actually we have made next to nothing on paper. A new HVAC last year wiped out $9k in reserves and few years worth of cash-flow.  

@Dan H. Really enjoyed your post about ADUs. 

I recently went down the rabbit researching the costs to build an ADU because I found one around the corner from our rental. I believe it was built without permits. Nothing on the county property record shows the ADU in the backyard. I think they even built it them self's.

I found a contractor that builds 650 sqft. ADUs for about $170k which is inline with your cost estimate. That's more than SFH sell for in our target neighborhoods. Your post hammered home the fact that it's a terrible investment in my market. In a perfect world we could rebuild a garage and construct and ADU, adding rental income, and providing additional housing. In real life I can't see that happening. We don't even have progressive zoning and building codes in our market. You never see them built on older lots. It's always new builds with big lots ($400k+). It's marketed as an in-law suite or house-hack opportunity for the buyer.

@Waref Hawas Water stains are quite common with older homes. Where are the stain located? How old is the roof? If it's on the ceiling you have a water leak. Exposed nails, ripped up shingles, etc. and can cause leaks. Every house we have purchased had a leaking or bad roof. We factored that into our offer and replaced it during the renovation. From my experience inspectors will tell you a roof has 10 years of life left, contractors will stay 5 years, but follow your gut and replace the whole thing. We don't patch roofs. 9/10 times it's a waste of money. 

If you have water in other places you need to find the source, get quotes to repair it, and correct the issue. Water can really tear up a property.  

Because he fled to Portugal? They guy off scotch free with millions of dollars. You can make an investment through the Golden visa program which grants you a residence permit. Holding the visa for five years qualifies you to apply for Portugal citizenship. Him and his wife probably already have it. 

His former business partner, Bert Whalen, not sure much. It's my understanding he paid massive fines and is currently in jail. 

@Minna Reid "continuous aggressive home value appreciation" - That's dangerous investing and a big reason we haven't bought anything this year. We keep looking though. 

@Jay Hinrichs "But it is a different ball game compared to GFC and pre GFC when lenders and servicers did not offer workouts like they do now." 

The question is how long does this hold out for owners getting into payment trouble? If we have a shift in the job market/unemployment maybe that stops the party. We're looking at distressed properties and constantly getting confused at the sold prices. Either my numbers are bad or buyers don't care about numbers.