All Forum Posts by: Daniel Kenney

It's certainly market specific, and while I would agree that things are feeling a little bubbly in general, to say it's the worst time to buy would suggest you can somehow predict the future. If your employing a sound strategy to acquiring LT buy-and-hold properties (i.e. good to strong CF, solid locations/markets, undervalued/build-in equity at current market prices, conservative LTV, etc.) are you really that concerned? No one really knows when the cycle will peak and how significant the correction will be when it does come, and again, it will no doubt vary by market. If I were focused on flipping my perspective would certainly be different...

If you are using PM, what about turnover expenses? Might be overly conservative on the vacancy estimate, but I don't see anything for lease-up commissions which can be 25-75% of one months rent, and potentially some commission for a renewal.

Congratulations! Great way to get into REI. Would love to see some numbers when you have a chance. Good luck with the rehabs!

@Adam Smith, as Joe mentioned, try FirstBank as they offer portfolio loans to investors. Not sure they will offer the same terms on a refinance that they will on a purchase, especially without any history with them, but it's certainly worth a shot. Last time I spoke with a banking officer there they were offering 80% LTV, 5 or 7 yr ARMs (1 point to relock for same term) for 30-yrs and low fixed rates on 15-yrs, but again, we were discussing purchase financing options.

Good luck 

Gabriel - Welcome to BP! House hacking is a great way to get your feet wet in REI. I would suggest you connect with Scott Trench who works for BP and writes articles often. He's written a number of articles on house hacking and detailed his own experience acquiring a small multifamily here in Denver to house hack. Best of luck!

Welcome to BP! I'm from Fort Collins and as you already know, you've chosen an amazing place to live.  Lots of good information here and I encourage you to listen to the BP podcasts for education, motivation and entertainment, while also networking with Northern Colorado investors.  

Good luck!

@Jorge Soto Despite the fact that it may not be a GREAT first deal from a cash flow standpoint, you are way ahead of 99% of people in that you took action.  Remember all the non-quantifiable benefits... learning how to evaluate and execute on an investment, landlord and potentially rehab experience, etc. as well as potential financial upside... increase in rents while building equity through principal paydown and possible appreciation.  Also, with good financing in place, in the next few years you will have the option to sell and roll potential proceeds into a new deal or, assuming the numbers make sense at that point, hang onto the property and rent out your unit.

As Stephen said, it's a great step in the right direction...

Welcome to BP Brian!  Make sure you check out the BP podcasts with Josh and Brandon.  They are educational and motivating for both newbies and experienced investors.  Plus you can keep the learning going while driving, working out, etc.

Tim - seems like a reasonable plan and you have a great mindset considering you are still in your mid-20s.  Just keep in mind that whatever plan you start out with, it's almost guaranteed to evolve (and should) based on what the market gives you.  Also, just remember that monthly cash flow can be highly variable in reality, especially with just a few properties. You will most certainly want significant cash reserves in the bank to cover those expected (and unexpected) capex and opex hits when Murphy comes to visit.  

Derek - 

I 100% agree with Nick on house hacking. If you can find a 2-4 unit multifamily in a solid area and get a low-down FHA loan, the advantages of this strategy will be hard to beat:

1) Have your living costs mostly or entirely covered by paying tenants in other units.  This will allow you to save significant cash for your next investment.

2) Learn how to landlord and fix property, which will help get your feet wet with relevant experience for buy-and-hold and flipping strategies.

3) Control a significant amount of property for your dollar. Assuming a $15k down payment, a 3.5% FHA loan would allow you to control over $400k in property while still maintaining a good chunk of cash for reserves/repairs.

4) Options.  Most people won't want to house hack forever, but if the numbers make sense, you can move out, lease your unit and hold onto the property with great financing in place, or sell if the market makes sense and roll the proceeds into another property(ies).

While I never house hacked myself, if I I knew what I know now back in my early 20s, I would have done this straight out of college in lieu of renting for the first 5 years and would be a lot wealthier as a result...

Good luck with whichever strategy you choose!