All Forum Posts by: Joey Streight

Quote from @John McKee:

The other thing to note is that the question that was asked 6 months ago might have a different answer if it was asked today...

This was a perspective that I was going to offer as well. As someone who is very new to real estate investing specifically but not naïve to the fact that regulatory and financial conditions in virtually all investment niches and markets are dynamic- It's not a particularly comfortable idea to allow major financial decisions to be informed by a forum post from 2014 (or even 2020). A more current consensus tends to be more helpful. I absolutely recognize that there are probably some "truths" to real estate investing that don't change, but new investors can't always easily discern what those are.

I've been very appreciative of how little gatekeeping I've encountered here. I'm absolutely open to being told to research something "offsite" but it's far more helpful if I have some direction. "Check out 'X' and 'Y' books and take a listen to 'So-and-So's' podcast" is much more useful to new posters than "Try Google and be less lazy", especially when there are so many predatory gurus, courses, ebooks, etc. A lot of us did try Google- that's how we got here in the first place.   

We actually just had the appraisal on a property we have under contract come in today, and they did not include the ADU square footage (as expected). I think this is standard in Oklahoma but as new as I am, I couldn't say for sure. We found ourselves in a good position at the right place and right time on this property however, and it actually appraised over asking (barely over, but better over than under).

Quote from @Dorothy Butala:

Let's jump right in. 1. Managing a SFH that has been relatively well maintained should pretty easy (but I may be biased since I have been managing properties for years). With a few systems in place that remove the "time suck" of collecting rents manually and dealing with bad tenants, the property shouldn't cause much disruption to your current schedule. ...

Are there any specific resources you'd recommend to help streamline/aid someone like me in managing a SFH myself?

Whether it's now or near the end of the 1 year warranty, get an inspection-

Low margins at the subcontractor level combined with the unspoken understanding that it just has to last a year is a recipe for problems. 

Quote from @Dorothy Butala:

Oh - I guess now I am even more confused haha - you said you haven't seen the property they gave you the quote on, but you are moving out of it?

Okay, now I see where our wires our crossed. THEY (the management companies I’ve reached out to) haven’t physically seen the house I’m moving out of yet. I’ve just reached out via phone/online but nobody has come out to actually take a look at it. 

Quote from @Dorothy Butala:

@Joey Streight I am assuming we are talking about two different rentals - seems like you got rental quotes for the second dwelling on the property you are moving into - am I correct?  I was curious about what the rent rate would be on the house you are moving out of to determine if you'd at least break even by renting it out.

And yes, you would change your policy from a home owners to a hazard policy - which is super simple with a call to your insurance agent. 

 No (I wondered if all of this information was going to be confusing lol), those rental quotes are for the property I'm moving out of. 

Quote from @Dorothy Butala:

...

4. Have you run the comps to see what rent range the property would garner?  Run the calculator to see the operating costs and income it would produce?   

Not myself but the PMCs that I've heard back from seem to be throwing $2000-$2400 around, although they haven't actually seen the property in person (not sure how much that matters). That puts it pretty close to what I'm paying monthly in mortgage, taxes, insurance, etc, which obviously means I will probably be in the red monthly, if I hire someone.

Speaking of insurance- I guess my policy will have to change, won't it?  

I'd love to get some advice/perspective about the situation I'm in, and how I should approach my next move-

I'd always toyed around with the idea of real estate investing but it always seemed like something that other people did because "Who really has more than one mortgage at a time, right? That's crazy. The only safe way to invest in real estate is to come up with capital free-and-clear, etc." I'd put myself in a pretty decent position on my current primary residence with a 3.25% interest rate and with my W2 income (great for this area) and could have probably lived pretty well in perpetuity, especially once my SO finished her graduate school program. However, last week (and a little bit out of the blue) we just had a great opportunity pop up for a home and some land in the school district that the kids attend, and it came at a bargain due to a combination of some work that needed to be done, the fact that it likely wouldn't pass an inspection for an FHA loan easily, the season, and the direction interest rates are moving. I wanted the property but I didn't want to give up my current position so I just... went for it. I secured the financing, down payment, etc and we close in 3 weeks or so.

Here is/was my initial plan:

Rent it out. I figure, at the interest rate I have, even if I can't rent it out for enough to cash flow or even if I'm in the hole a little bit, I will come out ahead in the long run by holding the property. 

I recognize that my "plan" is very basic and isn't really much of a plan, so what I'm hoping for, from you all here, is some help with the fine-tuning or even re-focusing. I'm not entirely sure if I have the time to manage the property myself (at least initially), because of my W2 job. This will obviously impact what the cost of this investment but it may be inevitable (or possibly even worth it, if I can invest my time in more valuable areas). 

What would YOU do? Rent it? Sell it and buy other properties? I see people here talking about HELOCs, etc. I'm sure there are dozens of other strategies I don't know about. 

I'm not sure what details may or may not be helpful but here are some: 

1.) Current/old residence was built in 2019. I bought it in 2020.
2.) It was the model home for the builder, so it has the benefit of being one of the smallest/"least" nice homes on the street (I assume that's a benefit)?
3.) My interest rate is 3.25%
4.) I'm estimating that I probably have around $80,000 in equity (I obviously lucked into this like many people did)

5.) I will know more about what kind of equity I'm looking at on the new residence after the appraisal and after I do some work (I will be able to do this relatively       cheap as I'm a contractor)
6.) My interest rate on this residence is 6.25%
7.) This property has a 2 bed, 2 bath house on it that has it's own address that I'm hoping I can also rent out

I feel like this is a LOT of information for my first real post, so I'll stop for now. Thank you in advance!

I've recently made a sort of impulse buy of a home that I am going to make my primary residence (we close next month), and I don't want to let go of my current primary because of the low interest rate I have on it. I've always toyed around with the idea of real estate investing but it seemed out of reach. When this new property fell in my lap (it was a great opportunity for my family and a good value), I just decided to take the leap.

Thanks for having me!