All Forum Posts by: Joshua Hower

I'm pretty new to analyzing deals, but I don't see this property cash flowing very well.

I made a personal calculator and plugged in the numbers above; even without CAPEX reserves or PM fees, it's cash flowing ~$14.

(mortgage and taxes in the mortgage field using the provided data) 

(vacancy could be reduced with more information)

COCROI would be 0.168% with 100k capital tied up

Hey Frank,

As an OEF vet, I wanted to throw my two cents in.

You might not get a lot of free time, have limited internet access, or other conflicts come up during your deployment. This could be a problem for your family to deal with unless they have the expertise or connections to handle issues without you.

House hacking is a great option, and I used my VA loan to purchase my first home with success. However, with the VA loan, the process fees, no closing costs, and maxing out the LTV on the house really set me back financially. I would recommend setting up a budget, getting a new lease for the family, and taking advantage of your deployment income to save that initial down payment.

Also, from memory, sellers don't like VA loans as there are more restrictions, mandatory inspections, and things sellers have to pay to protect the buyer.

After making several bad deals myself, I've learned always to be willing to walk away from a deal. If you are up against the clock, you probably will make less than stellar house picks to make a deal work. This bad pick will most likely drag your timelines down and stall you out as long or longer than the deployment.

@Scott Goulet,

Answering the question on cash flow and when a property should net positive is still a bit out of scope for me, but I've dealt with a bit of project management, so maybe I can help there.

My personal view is to treat every relation in a business venture like a sub-contract. If you feel the property manager (PM) is costing you money by bending over backward for the tenant, then you may need to step in and tighten the reigns a bit. Your current structure is unknown to me, so this is an assumption.

Before considering taking on the management yourself, I would ask for more documentation of the repairs (pictures, root cause, material list, labor cost, etc.) and ask to be consulted before maintenance work is completed. Adding this level of scrutiny usually adds the transparency needed to figure out what's going on. If it still seems like there are excessive repairs, then for non-emergency items, you could take the time to visit the property and go with the repair person to visibly inspect the problem and walk through the repair process with them. This will tell you whether there is a systemic issue or the property really has many gremlins running around.

I'm sure I will run into my fair share of issues like this soon enough, so I hope this perspective helps in some way.

@Leon B Buie,

Morning Leon, thank you for the warm welcome!

I wish I had started 20 years ago, but it's never too late, I guess. 

Is there a big difference in the Philly vs. Wilmington Markets? 

I'm right on the edge of Delaware in Claymont, so it would be easy to look at Delco as well.

@Shawn Kostoff,

Hey Shawn, great to meet you. I appreciate the warm welcome!

Hey Man!

I actually re-activated my Facebook today since I was getting ready to reach out to people, you being one of them. Once I get my ducks in a row we can catch up and talk real estate.

Good Afternoon Bigger pockets, my name is Joshua Hower; I go by either Josh or Hower.

Born and raised in North Delaware and planning on staying in the general area to be close to family. I have been interested in Real estate for a long time and even went to closing on a property that ultimately fell through thanks to a paperwork mix up about 7 years ago. Since then, I have spent most of my time in the rat race, thinking that was the way to move forward.

My previous career track has been a bit all over the place. Retail customer service, Army National Guard, Carpentry/Masonry, General IT, IT Project Management, data analytics, and probably more, forgetting. However, I have come full circle on the job market, and being a bit tired of my passive investments, I want more control over my wealth creation, specifically in real estate rentals.

Recently I picked up one of Brandon’s books on audible, which has focused my general meandering through properties into a goal-oriented outlook on real estate. I have always been told that rentals are pain and tenants will ruin your life, so I have avoided it even though my mind always seems to wander back to the idea. Coming from the book, I put together some high-level goals and strategic items. Residential seems to be the best for my target starting area, and the lack of multi-Families leads me to think that starting with a single-family will be my best bet.

Goals and Destinations

1 – Year

First Rental property acquired.

Create systems to manage the property and maintain positive cash flow.

Build relationships with contractors, real estate agents, and other pertinent groups.

5 – Year

Minimum of 5 Rental Properties (1 per year)

Have strong, in place, and proven systems for managing properties.

Achieve 3x cashflow of work salary.

Continue to build relationships with contractors, real estate agents, and local government.

10 – Year

Minimum 25 Rental Properties (adjusted for exponential growth)

Hire property managers and other professionals to handle day to day property tasks.

Reinvest business profits on lowering leveraged risk and diversify investments (stocks/Bonds)

Build relationships with regional government and other real estate investors.

20 – Year

Minimum 75 Rental properties

Use employees to handle purchasing and acquisition of new properties.

Contemplate retirement and possible sale of the business to another investor.

My Why

Ability to dictate my future and how I spend my time.

Ability to provide great wealth and comfort to my family.

Ability to travel through life on my terms and how I want to.

Ability to do what I want to.

Vehicle

Single-family homes

1. 2 – 3 bedrooms (if 2 bedrooms look for an opportunity to create 3rd bedroom)
2. 1-2 bathrooms

Frequency of Purchase

1 door every year for the first 5 years.

4 doors every year for the next 5 years.

5 doors at a minimum per year until retiring or selling the business.

Financing

How will I finance these properties?

1. Leveraged purchasing using cash down payments and cash closing.

(Or)

1. Private lending using the BRRR method.
   1. Buy, Rehab, Rent, Refinance

I'm new to the forums and real estate investing in general, but I'm a born and raised Claymont resident. Definitely, some hold out areas that I would stay away from, but residential seems to be the only thing people are interested in looking at. Most of the business spaces hemorrhage money for years hoping they can get local traffic. Most out of town traffic drive through town and rarely stop.

There is an initiative from the CRDC (local non-profit) that is buying up junk properties and rehabbing them, but they have restrictions on who can purchase them. This might have a positive effect on the letter grade of these areas.