All Forum Posts by: Kevin Von Storch

@Braeden Gould when driving for dollars, I found it helpful to make a note of the street name when I stumble upon some small multi-family, not just address. Then look up all addresses on that street in the appraisal district and look up length of ownership. If the property is non-owner occupied and has been owned by same owner for 15+ years, there’s a decent chance they own it outright and may be open to selling with seller financing.

I am closing on a duplex in Keller using the method above. Truthfully, I think I was just lucky and showed up at their door at the right time. Your challenge being in Midland vs. Dallas is the ability to make contact with the owner. I’d recommend creating short list where the numbers and location are best, then send hand written letters then follow through with a knock on their door the next time you’re in town.

Are the listings in the higher rent range getting any traction? How long have they been on the market? Is there any price movement down? If they are listed for rent through Zillow you can see the number of contacts and applications.

If they are getting traction and moving quickly, and your house is comparable, then you have a decent chance of getting the top of market rates.

Just like for selling a house, I’d highly recommend getting quality pictures taken for your listing. High rent + bad pictures = sitting on the market.

To your second question about buying another property and breaking even… I would not assume you’ll profit or break even by simply gauging rental rates and mortgage payment. Are there any major capex expenses looming? Roof, HVAC, water heater, plumbing? If anything major is looming in the next 2-5 years that could quickly put you in the red. If you can afford that, great, but no need to put yourself in a risky financial position by buying another property if you can’t.

@Bob Daniels I was in a almost the exact situation last year when I converted my primary into a rental. Unfortunately, I don't have any good news to share with you. I ended up selling some investments in order to put a larger down payment down on my primary to get to an appropriate DTI. Given the banking climate at the moment, I imagine most lenders are being even more cautious than they were a year ago. I hope someone has gone through this and has a better solution for you!

@Sally Pearson I'm not sure about specific steps to your situation, but I found this website to be incredibly helpful with regards to an intrafamily mortgage for both buyer and seller. https://www.nationalfamilymort...

@Sofia Sendra I'm not sure this exactly fits your strategy, but something you could consider if the family member has the funds to cover the entire home purchase is an Intra-Family Mortgage.

You can learn more about it here https://www.nationalfamilymort...

The interest rates of an Intra-Family Mortgage are dictated by the IRS and are multiple percentage points lower than the going average. 

Depending on your exit strategy you could sell and they'd recoup their money plus interest or if you plan to buy and hold, you can refinance in 3-5 years and they'd get their money back plus interest.

@Jack Lee I have property in Dallas county and had this happen to me last year. I was unsuccessful in my protest but in talking to other RE investors around Dallas and Tarrant County, the sweet spot they've found when protesting is trying to get the taxable value down 2.5-3%. You're not going to get the taxable value down to your purchase price. Appraisal districts are greedy for the tax revenue. Knocking off small chunks at a time is better than nothing.

I wouldn’t do anything more than 20%. That leaves you with plenty of capital to buy another investment. Both properties are a little high $/sq. ft so I wouldn’t offer anything north of $300,000. You might not get the home, but you avoid over paying and reducing your appreciation.

Both appear to be well maintained with upgrades, so repairs should be minimal depending on home inspection. But you’re right cash flow would be tight, however, going back to my first post about dollar cost averaging, you’re buying in a good market that’ll reward you via appreciation over the long term. Is this the best cash flow? Absolutely not. But cash flow is not the only metric to measure an investment. Finding a great cash flow deal in a good area is going to be hard unless you do something like subject to or seller financing but I personally steer clear of those.

Man I feel like they are popping up left and right on MLS. They are gone quickly, but they are there. 8008 Irish Drive North Richland Hills and 7212 Harwick North Richland Hills are ones that I'm watching. I'm not in as liquid of a situation as you are so I'm on the sidelines for a moment.

I personally like north east Tarrant county. Cities like Keller, North Richland Hills, Euless, Bedford. The school districts are good, close to major highways and amenities. There are homes anywhere from $250,000-$350,000 that are in good shape and ready to rent with minimal, if any work. Rents are anywhere from $1800-$2800+ for a SFH, so a modest cash flow is more than possible.

I'd personally look for something around $300,000. With 20% down you still have about 3/4 of your liquidity ready for another deal and the mortgage on the house would be $2000 so more than capable of a $300+ monthly cash flow.

@Eric W. the way I think about investing in real estate is similar to dollar cost averaging when investing in stocks. If you're regularly buying stock, sometimes you'll buy when it's up, sometimes you'll buy when it's down, sometimes you'll buy when it's right in the middle. But if the stock is fundamentally sound, you're likely to reap a great reward for your consistency over time.

DFW is fundamentally sound (of course some places are better than others). Yes, prices are high and interest rates don't help but if you can get into a good area and have some level of positive cash flow from the beginning, you're more than likely going to see appreciation and cash flow improve over the next 5-10 years.

Price and home size are really dependent on your strategy and how much work you're willing to do (yourself or contract out) to make rent ready. You've got great liquidity, salary and primary mortgage to get started. Don't let finding the perfect opportunity get in the way of finding a good opportunity.