All Forum Posts by: Jaryn Pierson

 Personally I invest where I live which is the advice I would give to anyone starting out and will be the only way you will be able to get an owner occupied loan unless you were to move.

Hey Sangam

All great questions, I'll take a stab at a few just for fun, with the numbers below corresponding to your questions above.

1. For finding a property with good cash flow, maybe start looking into networking with some wholesalers in your area. You'll have to pay them their commission, but for the right property it could be worth it. A good wholesaler in your area may have a better deal flow than you're already getting and could give you more options to run your numbers on. Maybe join a real estate meetup, could find wholesaler there or get in touch with some other local property management or investors in the area that may be interested in getting rid of properties at a reasonable price for different reasons.

4.  My plan over the last couple years of getting started was always to just buy and never sell. After reading through a few different books this year, I've decided that selling every 3 - 5 years after stabalizing a property could help me scale a bit quicker. For example, one property I have is a duplex that has about $100k of equity in it. Sure I could pull some of it out, but I could also sell and move that equity into a much bigger property. Around here (Western, Ma) at about $50k per unit, it wouldn't be unreasonable of me to take that $100k and move it into purchasing an 8ish unit property. 

Hope that helps a bit !
Jaryn

 Ok again all great questions, answers are as follows . . .

- Materials that I like are any Bigger Pockets Podcasts, books in the bigger pockets bookstore, maybe start with House Hacking by Craig Curelop, The Multifamily Millionaire by Brandon Turner and The Book on Managing Rentals by Heather and Brandon Turner. 

 - As for duplex vs fourplex, I'm not going to say that economically a 4 unit isn't generally better, its just more. Right now, if you don't have a lot of money saved up and you want to get into the game, you'll be able to get started a little quicker as generally a 2 unit will be less expensive that a 4 unit.  On top of that, a 2 unit is going to be less management intensive which will be a little less stressful in the beginning. You could buy a 2 family, get one unit rented up, and then rent out a bedroom on your side if you wanted to start to hustle it a little more. You'll find a strategy that works for you, just start small, grow, but don't over extend.

 - As for a market, lets say you chose Boston, Ma as a market. Well, there are many 'markets' within the Boston Metropolitan area that are all very different. Demographics are different, housing stock is different, market rate rates will be different and housing prices will be different. If you have an area in mind, just make sure as you zoom in on a neighborhood you choose the one that best fits your criteria.

Hey Autumn

If you sign up to be a pro member on Bigger Pockets you'll get full access to a complete library of fairly well organized landlord forms organized by state. In my opinion one of the biggest values to pro membership that doesn't get spoken about a lot.  Another great reason is attachments supplied in the Landlording book by Brandon Turner, ton's of great info there as well.

Happy Investing !

Matt

Great to hear where you're at, I remember being exactly there.  Your plan is strong. Pay some of that debt down and commit to a weekly spending and saving budget. Getting that in order will be extremely helpful when you start to make up your budget / projections for the rental properties.

A few tips that may be helpful to get you where you want to go (in order) . . .

 - pay that debt down (shouldn't take you more than a month or two) at $50k / year

- Start reading! If that doesn't work, Youtube or BiggerPockets are also great resources. Every book in the Bigger Pockets library is a solid educational starting point. Could maybe sign up for the upcoming Rookie Bootcamp as well?

 - think seriously about that partner, I would want to buy something like this on my own at first rather than going into a partnership, maybe a 2 unit that you live on one side could be better for deal #1

- Pick a market, and then a 'market' in that market. What neighborhood is on the up and up? Then start looking at what homes are closing at per unit. ex Duplex that sells for $100k is $50k per unit. Will help you break down the math of what that two or four unit home may cost.

- From there, talk to some banks and see what they've got for options. Lets just say you go for that 5% down loan. Well, a $200k duplex @ 5% down would require $10k down payment plus some closing costs etc. Lets say the total amount to close was $15k. Have another few months expenses set aside to cover the first few months.

Happy investing !
Jaryn
 

Hey James

I have to agree with the above comment. If potential tenants have been properly screened, properly onboarded, and properly communicated with then people are almost always going to return the favor in the same manner. I always say to myself 'kind and professional' before having any conversation with residents and its paid off in spades. Golden rule goes a long way here. If you're desperate to skate around certain laws of the land that just don't work for you, go to a different state.  And for clarity, I'm in Massachusetts, where some of the landlord / tenant laws can be the trickiest.

Happy investing !
Jaryn

Hey James

Really like your question. That said, I have to ask why not just continue with the traditional security deposit protocol? A lot of the local landlords I know don't do security deposits mainly because they are afraid to hold them as they need to be held in an interest bearing landlord / tenant account at a bank. I've found that after setting one up, it is super easy to set up the account, no tenant necessary, just need their name / birthday / email / social. Once you have that and the deposit you can just open the account up at the bank and then let them do all the hard work for you. Not saying the insurance isn't helpful but if collecting and holding the deposit shouldn't be a reason for not doing it as it's quite simple.  To go even deeper, personally, if set up well on the front end during tenant orientation, i'd much rather have the deposit given with clear instructions than no deposit and having to push an insurance company to pay out. Just my two cents.

Happy investing !
Jaryn

Wen

Sounds like you've got yourself some great real estate with a lot of potential. Because you mentioned you're new to development and this is quite a large project, my recomendation would be to start looking around for someone that you may be able to work with on a project like this. You could start with an architect and engineering company as they're going to be the ones who help you put all the permits together and will know whether this project is actually possible with the zoning. Talk to a few different companies and check some references until you get a feel for what you're looking for. From there, said companies above may have some great recomendations for builders that they could put you in touch with that they have worked with in the past. Good luck and happy investing !

Hey James

Great questions. First off, zoom in on that buy box! 5 - 30 units is a pretty big delta and are very different types of properties even for just the underwriting.  The BP calculators work super well for getting some baseline numbers together.  For me, if a property passes a sniff test in the BP Calculators that's when I just jump into Google Sheets and start building out a 12 - 24 month projections model. The more robust financial modeling programs are really nice but things can get expensive and at my level with not having to pay out investors etc a self built model in google sheets really seems to be the best bet.

Happy investing !

 That's a tough question to answer. First off, I'd be careful of your comment above that states 'They are on month to month so it will be easy to move current residents'. Remember that this property is their home and they are entitled to it and often times hate the idea of moving. You may close and forecast a renovation date in the future, or put terms in your deal to have all residents out on closing. Going into this and assuming everyone is going to be ok moving is not a situation I'd want to see myself in and not a message I'd like to deliver.

Beyond that, what you're going to want to do is built out a financial statement for the first 12 months of ownership, with your 'under contract' time accounted for as well as that won't be free either. From there, start to build things out first in a 'zoomed out' version and then start to zoom in and really focus on costs. You're going to need some estimates via a contractor or two, which you also may need to pay for. Start with your profit in mind, it isn't far fetched, and work backwords. And have reserves for a project like this, lots preferably !