All Forum Posts by: Joe Vastola

Hi @Joy Baker, while you are responsible to pay back the loan monthly, you will most likely be using the tenants rent money to pay off the loan + other related expenses. To keep out of debt when your rental is vacant, I would 1- definitely establish some cash reserves prior to buying so that you can still make the payments if this situation arises 2- when running your numbers I would account for 5-10% vacancy rate and 3- I would research the market in general to see how many people own vs rent and what the current vacancy rates look like. Standard mortgages usually range from 15-30 years and the interest rates may vary based on the bank and length of the loan. 

I have done a lot of reading and listened to many of the BP podcasts and one universal piece of advice I've received is to make a ton of offers. To find the best deals and grow your portfolio you might offer on 20 properties and only get one accepted. It's probably not the worst problem to have, but my question is what happens if you make10 offers and 3 of them get accepted but purchasing all of them isn't possible? I know reputation and keeping your word is a big thing so what is the best way to handle this situation and is there any difference when an agent is involved vs FSBO.

@Yannie Ko If your goal is to strictly maximize monthly cash flow I think renting it out on airbnb is a good idea. That being said, you need to contact your HOA to make sure you are allowed to do this. Other local condo owners are often against the idea of short term rentals from their neighbors. Lastly, if you do get approval, I would just double check to see if there are any city restrictions that prohibit airbnb or short term rentals. In some areas (i.e. NYC) there are heavy restrictions placed on renting out an apartment for less than 30 days and violations are subject to big fines. It all depends on the local laws so best to check before diving in. Good luck!

I am looking to buy a SFH and am wondering if it is smarter to just put down 20% or put less down and take on the expense of private mortgage insurance. I'm assuming the cost of PMI is based on the size of the loan and other financials such as credit score and income that demonstrate the buyers ability to pay back the loan? Is one option recommended more than the other?

I would suggest getting a long term mortgage to minimize your monthly payments. You would be able to generate stronger monthly cashflow and you will have the capital to invest in other properties all while having the tenant pay off the mortgage.

@Kevin Scott If living in the unit isn't an option for you, you should definitely consider the BRRRR method. It is vital to do your homework to know what your costs will be but its a great way to get into a deal with private money. After you rehab the property the bank will generally let you refinance the property within 6-12 months. Through the refinance, they will give you a new loan at 75-80% LTV of the after repair value which should cover your original short term private money loan. Check out the BP blog page and search BRRRR and you should get some.

@Philip Murtagh Welcome to BP. I am very new to the industry but have been reading a lot of books and hopping on the forums to learn as much as I can. I think the two biggest things you need to do first are 1- determine a market in which you would like to invest and 2- determine what your exact goal is (cash flow/ buy and flip/buy and hold etc). From here, you can focus your efforts on learning as much about renting in that specific area and you can network with agents, contractors and other investors in the area to learn more. 

@David K. I grew up in Nassau County but work in Manhattan and my dad owns an apartment building in Williamsburg so I have a good deal.

It may seem like nonsense to read up on job progression and population growth but those two areas have enormous influence and cash flow potential when it comes to deciding on investing in a particular market. That knowledge can help you find areas that are becoming popular and in higher demand. If you can get in before other investors at a more reasonable price, that's where BIG money can be made.

That is very smart because as you know most sellers won't advertise deficiencies in the property (near a railroad, on a busy street etc.)

@Gregory Flores, Jr. Thank you for that link! I just wanted to make sure I was inputting things correctly and NYC and other big cities are tough. I have been focusing my search in the Greater Atlanta region, but also keeping an eye out on parts of Brooklyn.

@David K. I am also interested in possibly pursuing turn key out of state and am originally form LI. It sounds like you are off to a great start. I think the first question you should ask yourself is what do you want to get out of the property? Are you looking to generate strong monthly cashflow, fix it up and sell in the short term, hold long term and hope it appreciates? 

If you run the numbers and you feel you are getting a good deal and achieving what you set out to, I wouldn't be to concerned about repairs and vacancies because those costs should be factored in for any property you own.  I would however do extensive research into the market you are purchasing in, what houses nearby are selling for and if there is job growth and population growth. Lastly, I personally would really like to see before I buy but if getting to the area is to difficult many turn keys will provide a video of them walking through the home so you can get a better sense.