All Forum Posts by: Josh Bakhshi

Great question. I think that most millennials that live w/ their parents aren't focused on investment real estate. I would guess no more than 5% (closer to 1-2%). I think most of them are too immature and just don't want the responsibilities of growing up, like paying rent, power, food...

But to answer you question directly, I would say that 27 is too old to live at home (in most normal situations).

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Dave,

Are you using a PM company or are you self managing? As for home warranty, I use Choice Home Warranty and they are pretty good. You just have to push them for more and play that game. As for appliances, it depends on why things are braking. If the oven is 10 years old, than that is normal. I would send someone to try to fix it and find out why it stopped working. If it is the tenant's fault, then they should be responsible and deduct it from the security deposit (but I am not a lawyer) and that is why I pay people to manage the properties. Same thing w/ the pool. I would put it in the lease that the tenant needs to pay for upkeep like the chemicals and making sure it is clean.

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JC, I grew up in NorCal. Welcome to BP. Best thing to do is schedule meetings w/ local property managers and agents.

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Congrats on surviving the terrain, happens to the best of us. Need to know more about your situation like RE experience, how much you have to work with and what your goals are. But from what I do know, you may want to look for a project where you can buy something cheap fix it up and flip it. Do that 3-4 times and now you are working with real money. I know that is easier said than done, but no one says it's easy. At the same time, work on your credit. You WILL need that in the future.

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Originally posted by @Wade G.:

I have tried to figure this out but I get lost in the details. I have a couple of houses that I have had for over 10 years and a couple for only a few. I'm trying to figure out if its worth keeping them that long or if its better to sell them a after a couple of years of holding them as rentals and redeploying the capital. A few details for this scenario:

- houses are bought with equity gains in the beginning

- all repairs (new AC, roof, paint, flooring, etc.,) is replaced at acquisition so house is in great condition

- no intent of ever paying off the house

- appreciation being normal at 3% for this scenario

- cashflow being $400 month, figuring $200 of the $400 for future repairs and vacancy

- sell and pay capital gains tax rather than 1031

So in my scenario I figure most everything has a 10 year life span...AC, faucets, dishwasher, water heater, will need all fresh paint inside and out, etc. Basically in 10 years the house has to be rehabbed again and 10k -15k spent.

Selling in a couple of years the house should still be in good condition, should get to keep more of the net cashflow since you only have one set of tenants and avoiding the future big expenses, and you get to redeploy the capital and capture more equity but pay more closing costs and probably some repair costs on new property.

Waiting 10 years you get more appreciation, more mortgage paydown, but more cashflow has to be saved for rehab. Could probably refi the house and use that money for rehab to buy another property and capture some equity.

I realize there are many variables to this and I hope it makes sense. I cant keep my thoughts straight when trying to figure it out. Maybe its a wash when everything is considered. In my thinking with normal appreciation, good tenants that dont destroy, it may be better to sell the properties after a couple of years and use that money to by another property but only if there is a huge equity gain. If not buying for huge equity gains maybe just holding the property 10 plus years is the way to go.

Wade,

It depends on what your business plan is. There are three main goals investors have... 1- Buy and hold for cash flow. 2- Buy and hold for appreciation. 3- Buy and Sell for a quick buck. I have personally had experiences on all three and they all have positives and negatives.

Of course I don't have all the information on your situation and don't know about you goals, but the example you gave implies that the properties you purchased were not good investments. The big thing that is missing is the purchase price, how much you put down and where they are located.

If you bought the property for 40K cash and it is netting you 200/month, you are still netting 6% cash and 3% appreciation. All things considered, that is pretty good.

If you bought the property for 400K and everything else the same, then it is not a good deal.

The other thing to consider is what are you plans for the money if you sell.

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Originally posted by @Brant Richardson:

I'm not sure how that 3% success rate was calculated. Failures are probably based on unreasonable expectations as far as the timeline, we are an instant gratification culture. Here in California all a person had to do is buy any typical 3/2 house, at full market value 30 years ago and keep making the mortgage payment, be it cash flow positive or cash flow negative, they'd call it a huge success right now. I am sure the same is true if you bought right now. Of course with some education you can do a lot better than that.

Brant,

I grew up in the Bay Area and you are 110% on the ball. The funny thing I know a guy that did that for about 15 houses. Needless to say, he is worth over $20M on just those deals alone. He thinks he is a guru. I asked him, why he didn't invest the same amount of money 20 miles south of where he did and it would be worth 60M. A lot of it is luck and timing. Like most investors, I am blessed to have several good deals under my belt, but that doesn't mean I didn't have my share of lemons.

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I recently closed on a property that was offered by an auction company. In the contract it did say that I am responsible to pay the commission for the auction house. The seller picked out the title company. I got the HUD from the title company and wired the funds that was requested, got confirmation deal closed, took possession of the property and got the title policy along w/ the DEED. The seller realized a couple weeks later that the title company (the one the seller chose) made a mistake on the HUD and showed the Seller pays that commission. Two weeks later, they are coming after me for it. Do they have a case?

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All good points Marvin. You also need to add in Property Management expenses and eviction costs. @Blair Ellis One suggestion is to contact a couple PM to get their opinion on the property. Even if you plan to manage it yourself, it is good to get information from the professionals in the area

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First, I would try to talk to her and her mother to see if you can deal with this peacefully. If you don't have any communication and I don't know the laws in MN, but if you lived in GA, I would suggest your friend "evicting" her in court and get a judgment. With that judgment, you can have the Marshalls put her stuff on the curb so then it's fair game and you get to keep everything 100%

Good luck

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My partners and I heard a lot of good things about Mobile AL. We want to buy a few houses in that area. Can anyone give me the contact information for a couple agents and/or property managers. Also, if anyone can tell us what areas would be good parts to invest in and what areas we should avoid, that would be a great help.

Thanks,

Josh

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All Forum Posts by: Josh Bakhshi

Josh Bakhshi has started 10 posts and replied 340 times.

Post: When is living with parents too much?

Post: Lease strategies regarding appliances and pools

Post: New member from Eureka CA

Post: No kids, poor credit and income has increased. Where to start?

Post: Are SFHs worth keeping more than a few years

Post: Why Do 97% Of Real Estate Investors FAIL?

Post: Can seller of a property come back after closing for more $$$?

Post: Invest in Duplex in a "C" class neighborhood?

Post: ex girlfriend won't remove belongs.. what now?

Post: Looking at Mobile AL