All Forum Posts by: Jonathan Small

@Becca F.  The Class system (A, B, C) can vary by market, but here's my general breakdown:

• Class A: High-end, desirable neighborhoods. Newer properties, strong rental income, lower vacancy rates. Think young professionals, families. I agree with @Travis Biziorek that this class will not cashflow much but should have better appreciation.  
• Class B: Mid-range neighborhoods. Good balance of affordability and rental potential. Mix of families, students, young professionals.  Good suggestion by @Drew Sygit to consider section 8 tenants for possible cashflow and lower vacancy. 
• Class C: Working-class or up-and-coming neighborhoods. Lower rents, potentially higher vacancy rates, but also opportunities for value-add renovations. @Samuel Diouf said it well that this class should cash flow well and get some appreciation in good areas.

Best way to get specific details? Talk to local agents and investors! They can give you insights on specific neighborhoods and current market trends. 

What types of properties are you interested in, and in which Ohio markets? Sharing your goals can spark even more helpful advice!

@Bradley Buxton Scary things in real estate, huh? We've all been there! Here's a quick breakdown:

• Unforeseen Property Issues: Hidden damage, bad tenants, major repairs – these can eat into profits.
• Vacancy Woes: Empty units mean lost income, impacting cash flow.
• Market Downturns: Property values can drop, affecting your investment's performance.  @Bruce Woodruff points out you can lose all your money and more.  This is true, but can increase your chances of success by working with an experienced team.
• Financing Challenges: Unexpected rate hikes or tightening lending restrictions can complicate your plans.  I agree with @Becca F. that hard money rates scare me.
• @Mike Dymski I agree government actions are unpredictable.  I personally have not experienced any government change that has ruined a deal for me.

But fear not! Knowledge is power:

• Thorough Inspections: Minimize surprises with detailed inspections and due diligence.
• Strong Screening: Careful tenant selection reduces vacancy and headaches.
• Diversification: Spread your investments across different locations and property types to mitigate risk.
• Financial Planning: Maintain a buffer and choose financing options that fit your long-term goals.

@James Hamling I agree things are scary until you find a solution.  All of my scary problems have been solved by someone. I just need to find the solution.

What scares YOU the most about real estate investing? Sharing your concerns can help others learn and overcome similar anxieties.

@Hamidou Keita 

House hacking by converting a single-family to a duplex is a smart strategy, but requires careful planning.

Pros: Offset living expenses, higher rental income, increased equity.

Cons: Significant conversion costs (permits, construction), zoning restrictions, living in a construction zone, managing two tenants.

Key Considerations:

• Feasibility: Check local zoning and permitting.
• Costs: Get detailed construction estimates.
• Market Analysis: Ensure post-conversion rent covers expenses and there's rental demand.

Resources: BiggerPockets forums, local contractors, real estate agents.

Have you researched your target property's conversion potential? What are your biggest concerns about the project? Discussing these points can help you make a sound decision.

I agree wit @Noah Corwick that permitting and construction cost make this a tough option.  

@Wale Lawal makes a good point to check zoning and construction cost.  

@V.G Jason It is true that a duplex limits your rental pool. There are certain families that will not rent a duplex. I prefer SFH.

@Robert Ellis new construction does offer a premium.  How how much more should you be willing to pay versus an existing build?  I personally will not pay too much more for a new build versus something 10yrs old.

You're facing a common investor challenge: learning from experience (and sometimes mistakes). It's good you're seeking advice and educating yourself! Here's a breakdown:

New Orleans Duplex: Firing the property manager is likely the right move given the prolonged vacancies. Focus on finding a replacement with strong tenant screening processes and performance guarantees. Don't take out a HELOC on this property right now. I agree with @Michael Smythe that you need a property manager that communicates well.  My PM is key to my success.

San Diego Condo: This is your biggest concern. Negative cash flow with high HOA fees is a red flag. Repairing to sell might recoup some costs, but given the market and your limited funds, selling "as-is" is likely the best option to minimize further losses. Don't wait 1.5 years.

Overall Strategy:

1. Prioritize selling the San Diego condo. Cut your losses and free up capital. @Stephen Keighery makes a point that it may not be a good time to sell, but I recommend you test the market.  You may find a good buyer.
2. Find a better property manager for the New Orleans duplex. Focus on stabilizing cash flow.
3. DO NOT take out a HELOC right now. You need to simplify, not add more debt.
4. Focus on education and building reserves. Your $30k should be your emergency fund and not used for new investments at this time.
5. Consider talking to a CPA or financial advisor. They can help you organize your finances and create a sound investment plan.

Key Questions to Answer: What are your long-term financial goals? Are you primarily focused on building wealth through real estate, or are you open to other investment avenues? What is your risk tolerance? Selling the condo is a good first step.

This is a tough situation! Don't panic, BiggerPockets can help. Losing a house to unpaid taxes can be devastating, but there might still be options.  I agree with @Nathan Gesner that you need to talk to lender immediately.  @Brandon Croucier idea of a hard money lender could work it they don't mind being in these type of deals.  I lend money and would not want to lend on this type of deal.

Here are some resources to explore:

• Contact your local tax authority ASAP! Explain your situation and see if there are payment plans or hardship programs available.
• The BiggerPockets forums have threads on tax liens and foreclosure prevention: https://www.biggerpockets.com/forums/41/topics/766025-surplus-funds-unpaid-taxes-in-foreclosure-sale
• An experienced real estate attorney can advise you on your legal rights and explore potential solutions.

Have you spoken with your local tax authority yet? Knowing their policies and options is crucial. What steps have you already taken to address the situation? Sharing your experience can help others facing similar challenges.

@Jay Hinrichs I agree that many people will see his situation and try to take advantage of him. That is why I appreciate the biggerpockets community so much for advice.

Tough call! Both California and Texas have pros and cons. California offers great job markets and weather, but comes with high costs. @Andrew Syrios, I also like Texas in this situation.  Texas boasts affordability and business-friendly policies, but lacks some cultural amenities.

It depends on your priorities! Are you chasing career opportunities or a lower cost of living? Do sunshine and beaches matter more, or a strong job market in your specific field? BiggerPockets has forums dedicated to both states - explore and see which resonates more!

Depends on your goals! Fast pay off = less debt, but less cash flow. Consider your interest rate - if it's low, investing that money might yield higher returns. Think about your risk tolerance and future financial needs. BiggerPockets has great resources on both sides - explore and decide what's right for you! What are your primary financial goals (e.g., early retirement, maximizing cash flow, minimizing debt)? This will heavily influence the best strategy for you.

@Greg Scott @Kevin Sobilo how much more return would you suggest considering risk and taxes?  I would say 4-5% more.

@Nathan Gesner @Theresa Harris you are correct, the payment will be the same.  Would you refinance a loan that low or use cashflow for down payment on another rental?

@Alecia Loveless I have never recast either.  However does it work diffrently with each lender?  Do all lenders give favorable terms when trying to do this.

It's tempting to chase quick riches in real estate: flips, short-term rentals, hot markets. But true my wealth primary have comes from something less glamorous: boring real estate.

What's "boring"? Long-term buy-and-hold rentals in stable neighborhoods, prioritizing consistent cash flow and responsible management over rapid appreciation. It's about avoiding speculation and focusing on fundamentals.

Why I think is it so powerful?

• Consistent cash flow: Reliable income to build wealth.
• Less stress: Stable tenants and well-maintained properties mean fewer headaches.
• Long-term appreciation: Steady growth over time.
• Resilience: Weathers market downturns better.

Ami I chasing "shiny objects" or building a solid foundation? Are you prioritizing short-term gains over long-term wealth? What are your experiences with "boring" real estate?

Single family long term rentals has been working for me.  It is boring.  I love it.

However, I really want to hear form the flippers and short-term rental investors to see what I may be missing out on.

Choosing between a single-family home and a duplex is a classic real estate investor dilemma. Both offer unique advantages, but understanding the trade-offs is crucial for making the right decision. This is how I see it:

Single-Family Homes:

• Pros:
  • Larger pool of potential tenants (families).
  • Simpler management (one tenant, one lease).
  • Often easier to finance.
  • May appreciate faster in some markets.
• Cons:
  • Only one income stream.
  • Vacancy hits harder financially.

Duplexes:

• Pros:
  • Two potential income streams.
  • Live in one unit and rent the other (house hacking!), reducing your housing costs.
  • Potentially higher cash flow.
• Cons:
  • More intensive management (two tenants, two leases).
  • Can be harder to finance than single-family homes.
  • May not appreciate as quickly in some markets.

Here's where I need YOUR input!

• 1.  Single Family vs Duplex?
• 2.  What are YOUR top priorities as an investor? (e.g., cash flow, appreciation, ease of management)
• 3.  Have you considered specific local market conditions? (e.g., rental demand, property values)
• 4.  For those who have invested in both, what were your biggest lessons learned?

@Sebastien Tinsley 

Welcome to the exciting world of real estate investing! BiggerPockets is a fantastic resource.

What's your biggest question or fear as you start your REI journey? Knowing this can help the community point you to the best resources. Also, have you considered a specific investment strategy (e.g. rentals, fix & flips)? Sharing your goals will get you even more targeted advice.

@John Mason rightly mentions your CORE 4.  My property manager is top of my list for my CORE 4.

I agree with @Nathan Gesner that you need to get out and start meeting people in person.  Check your local real estate association meetings as a resource.

I also like the idea of house hacking mentioned by @Travis Timmons and @Nicholas L.  I just started partnering and it has gone well for me.  You just have to have clear expectations and a healthy margin for error.

Good luck!