All Forum Posts by: Jesse T.

Those numbers looks good, but as mentioned in the first reply, the expected returns will vary between markets.  Also the purchase price vs. market value makes a huge difference.  If you paid a 20% premium, then it will take a lot of cash flow and appreciation for it to turn out well.  If you bought at a 20% discount, then you have a lot larger margin of error than if you bought at the market rate.

If the properties are good ones, I would focus on an agreement to acquire them.  

Could he cover his mortgages for 60 to 70% of rent?  Maybe do seller financing with payments of that amount, with a balloon at the point the where you would be in a position to buy them.  Basically doing a subject to financing agreement.  Just make sure he is staying current on the mortgages.  In that arrangement, I would want any money down to be applied to his mortgage.

Another option might be for you to wholesale them for him.  If he is willing to sell for pretty much the pay-off there may be a fair amount of spread to work with.

Even though rentals move more quickly than sales, all real estate requires some patience.

Do you have any prospective tenants from the first property that might be interested in your current listing?

Long and Foster is probably the biggest real estate company in the DC market.  I have no idea how their agent school ranks.

Which company do you ultimately want to work for?  You might talk to some brokers and see which one you like best in an area where you want to work.

I think it is going to have very little value as a rental.  The big attraction would be the ability to potential depreciate/deduct it if it is owner occupied.  Even with that benefit they tend to not do well in resale value.

How is the storage in the house overall?  A storage area might be the most desirable use of that area.  

Depending on the lay-out of the house a laundry room might be a good use of that space, if there is sufficient storage elsewhere.

Welcome to BiggerPockets.

I think in general Condos are appealing in high cost areas because they potentially cash flow better than SFH and TH.

While cash flow is usually an advantage for Condos they tend to have more risks as they age.

1. Appreciation potential is very low - older condos are less desirable.  Declines are more likely especially if the complex ends up with too many rentals for traditional financing.

2. Special assessments are a significant risk.  It can happen with any real estate, but there is less control over it.

3. Direct competition is more likely to be built.  Generally a developer won't build 100 SFHs and rent them out.  However a couple apartment buildings with nicer amenities could easily be built in pretty much any area.

4. Condo fees generally get worse as a building ages.  This will impact both the rental profit and the potential sale price of the unit.

Despite all these risks, I am considering selling my previous SFH(now a short-term rental) and buying a condo(or two). My top preference would be a small TH with a tiny lot, since it should have less maintenance - but no condo fee.

How much are you taxes?  A 135K loan at 5%(a high rate these days) would only amortize to about 735/month over 30 years.

Borrowing money on your seasoned property is probably going to be your easiest source of decent loans.  Selling one or two and getting a bigger property would be another option.

I think this is where the single dimension of grading falls apart.  Generally there is a correlation between how nice neighborhood is and how new it is, however there are definite exceptions.  The most common cause of this is where desirable areas get built up and the only option is to improve in place or move significantly further away.

It seems really silly to rate a mansion in a desirable area with high prices, great schools a C just based on some horrendously dated cosmetic issues.  I do see a little stronger argument, if they are more serious structural/safety issues.  If those are serious the property becomes a tear down in an A/B neighborhood.