All Forum Posts by: John Walker

@Bryce C. I think the answer is that it depends on what your business model looks like. If you are focused on cash flow then I would lean toward the lower cost that need some work. Just keep in mind that you will have a harder time selling them in the future. It's always good to think ahead and know the exit strategy. I have passed on some good cash flow but it was because the properties were in bad areas or really bad condition and therefore would make an exit strategy a lot more difficult. 

However, if you think you will hold on to it for 20+ years then it may not matter as much. Like I said, just depends on the model or plan. If you are trying to do both cash flow and appreciation then you may want to sell it in the next 5-10 years and realize your increase in value and this would be more difficult in a "run down" property and it may not appreciate as much anyway.

Another thing to keep in mind is that a more "run down" property will attract a less quality tenant which can create more stress and worry. Like I said though, if you solely thinking of cash flow and don't mind some issues if the money is good then do it. I know a local investor that only does very low income rentals and he has been successful doing it for 10-15 years so it can definitely be down.

Best Wishes and Good Luck on what you decide!

@Michael Dunn Based on what you're saying, I think the most important item to research is how much of the areas with the lower priced properties are majority rental areas. If it's a high rental area which most "not nice" areas are, then you are going to be hard pressed to find a buyer. Like you said, somebody may eventually buy it but it sounds likely that you will have to hold it for several months. 

Everyone's situation is different but can you take the cash budget that you have available and use leverage from a bank/other financing to buy a nicer property? You could utilize the cash as the down payment and you would be able to purchase a nicer property. When it comes to flips, I believe one of the most important things to remember is location and comps. You want to take on a project that will be easy to sell and move quickly. That's the whole point of flipping. Some people have different niches in higher end but the "bread & butter" is going to be the "middle" of the market. 

I hope this helped some. Best wishes and Good Luck!

@Champaign Garcia Each state is different but I would recommend an insurance broker. They will be able to shop through different companies and usually can find good rates. I know in my state Shelter insurance has good rates as well but like I said, not sure if they are in Illinois. Regardless, a broker would be a great place to start. Good luck and I hope you find some good rates!

@Reginald Winn Hello from a fellow Louisiana member! Have you checked with a real estate agent? There should be agents that deal specifically with bank-owned properties. I am an agent in Central Louisiana but I don't have access to the Shreveport MLS system. Wish I could help. I might could do some digging and find a good agent for investors in that area. Good luck!

@Travis Billings Welcome to BP from a fellow Louisiana member! My recommendation would be to focus on investing unless the debt is directly hindering you from starting such as credit or debt/income ratios with the lenders that you are dealing with. I wondered the same thing at first but the advantages of starting your investing outweighs waiting to start. 

1. Starting earlier means that you start the mortgage pay down sooner if you Buy and Hold and therefore your properties are paid off faster as you get older.

2. As everyone states, we can't count on appreciation but the sooner you invest the quicker that appreciation has the opportunity to start working. 

3. Extra cash flow from Buy & Hold or Flipping can be used to pay down debt anyway. 

4. You're buying assets! Always a good thing!

Just a few of my thoughts. I'm still on the newer side. I have one rental and I'm in contract for 3 more units at the moment. 

Good luck to you as you start your journey!

@Adriana Jimenez I have one property currently but I am about to acquire 3 more doors. Based on what you are saying, either the property manager is horrible or she has it priced too high. Sounds like she is not that good anyway. Have you looked on Facebook or Craigslist yourself to see what other homes in the area rent for that are in "like" condition?

If you guys have already moved out and are serious then I would say sell the house and invest the money into something that makes better numbers. The numbers on your house aren't bad but 20-25k could be great to use into a cheaper property. Maybe even a duplex or triplex. 

I will say that it's great to utilize the FHA. Another thing to consider is how would you guys finance the next property? Do you guys still have good credit, etc? You guys could sell the property and then do another FHA on a duplex/triplex and "house hack" it. Then you are able to utilize the FHA, live in your own place, and have your investment portfolio started.

Lots of options. I'm not sure that I helped though. It's hard to give a concrete answer without knowing more about the area and what kinds of deals are out there. 

Wish you guys Good Luck!

@Dena Wesley I would recommend some type of insurance broker that can write insurance through multiple companies. Each company will have different underwriting guidelines but they should have some options. It should be a good place to start. Good luck!

@Robert Cash 1. Figure out your plan for financing the deals. 2. Get in contact with a real estate agent. 3. Use the BP calculators to analyze the deal. 

That would be my basic place to start opinion. The type of investing will also make a difference as far as if you are Buy and Holding or Flipping, etc. 

Good luck with everything!

@Tri Ly yes that's after capital gains. That's why I'm trying to go over my numbers thoroughly so I don't miss anything that I can write off. One thing that I want to improve on for sure is better record keeping day to day. I already use Deductr but I need to hold myself more accountable to using it properly.