All Forum Posts by: Ken Maddis

This is exactly why I use a PM company. I don't want to deal with this crap, my day job is insurance and that's enough crap for a lifetime.

IMO a good PM is worth the peace of mind so I don't have to listen to these stories nor be the one to say no. Kudo's to the folks who can manage their own properties and work through this stuff, but this could be one of the factors that keeps folks out of REI. Finding a good PM was worth every penny and ultimately has been profitable despite the monthly expense.

Quote from @Michael Benton:

Hello everyone! I'll get right to the facts. I'm a single guy with a fixed income, I'm a veteran, and I have $30,000 to invest. I want to purchase a rental property so I can start creating cash flow to be able to purchase other assets, move into investing full-time, etc. I live in Gilbert, AZ, and SFH homes are out of my price range to afford, and MFH is way out of my price range if I can even find them, so I'm continuing to live in an apartment.

I was thinking of using the $30,000 as a down payment on a DSCR loan to purchase an MFH in another state. Is purchasing my first investment property in another state a good idea? Also, where would I even start?

Hey Michael, we had the same exact issue about 4 years ago with the outrageous prices here in the Denver area. We decided OOS was the only way to go. Our first two properties are cash flowing nicely and we just closed on a third property yesterday.

This is what got us started: https://store.biggerpockets.co...

Good luck!

Quote from @Nick Camizzi:

Thank you for your feedback, just my background I work 10-12 hour days M-F. He is charging around 8k, I am definitely willing to put in the work & not sleep if it comes to it lol. But spending the 8k would be hard for me at the moment and is it worth the 8k. You have personal experience with him?

 The great thing about Bigger Pockets is all the information you need to start your investing career is right here. There are thousands of successful investors, real estate agents, lenders, etc willing to share their experiences and knowledge without you having to risk thousands of dollars online with someone you don't know. Personally I'd be saving my $$ for a down payment toward a property. 

Quote from @Brice Perry:

What banks offer DSCR? I'm new to this term and idea. I'm going to do some research on this and see what I can find out about it? Thanks for all the help

One thing to watch for on a DSCR is prepay penalties. I had a quote for a 5 year 5-4-3-2-1% penalty. Doesn't mean it's a bad loan, it just means if you borrow money with the idea that maybe rates will go back down in the next couple of years so you can refi, you'll need to take that into consideration or go a different direction.

The quote I had was through Visio.

Situations like this is exactly why I love having a good PM company in my arena.

I just spoke with a DSCR lender yesterday and the 5 year 5,4,3,2,1 prepay is definitely a buzz kill.

@Nikki Nicole I haven't purchased any properties through them yet, but I've been through their website and properties quite a bit. They appear to be a legit company and if I found a property I liked I would use them. The only thing I'd caution on would be to do your own analyses of properties. Some of their projections and assumptions such as rents, neighborhood ratings, insurance costs, etc might not be wholly accurate. Just as you would do with any property, you might want to do your own independent research to see what #'s you come up with. 

Otherwise I think they can be a great source and if I found a property there that I liked, I wouldn't not hesitate to use them.

Hi Molly, sight unseen is most definitely doable, even for beginners. My first and only two properties so far were bought unseen.

I didn't see the first property until after I closed and flew down there (and the realtor gave me a tour of the city as well), and I've never seen the 2nd property. The 2nd property has had one renter in 4 years who just renewed her lease with two rate increases. Both have positive cash flow.

As has been mentioned, the key is finding a good team you can trust, realtor, inspector, contractor, lender, property manager. Before I even started I read this book to get me familiar with OOS investing... https://store.biggerpockets.co...

We're in a position to do a couple more properties this year and I have no intention of visiting them since I have people in place that I trust. 

So yes, you can absolutely do this!

We have 2 SFH under our belt that we bought in 2019. If we go about it on our own, we'll likely buy 2 more this year, however we're in discussion with another couple about a partnership, if that goes through then most likely 4 to 5 this year.

I'm a small time investor (2 properties) and still consider myself a relatively new investor, but I would never have done my first deal without some other professional support...I found a good realtor and PM company. Do you have a realtor you trust that can deal with the closing? Are you looking into a property management company that can take on the landlord headaches?

Finding those two can relieve immense pressures on you. While it's absolutely necessary to educate yourself and become knowledgeable in RE investing, nothing beats jumping in and getting your feet wet. Risky? Yes, but if you think this is a good deal and have good people behind you (realtor, PM company, etc), you can mitigate the risk.