All Forum Posts by: Konstantin Ginzburg

@Lorraine Hadden

There is no way to predict for sure since we don't know the future, but the chances of sub-3% mortgage rates happening again anytime soon is not very likely. That was an unusual set of circumstances that was created in response to covid, so it would likely take extenuating circumstances for that to happen again. 

@Priscilla C.

Either one of those options should work for you. It simply depends on your time frame, when you want to actually begin renting the property out short term, and what the loan terms are. A primary residence will most often provide more favorable loan terms so if you are willing to wait one year while you living in your new property and are comfortable with renting out your primary residence to a tenant, then getting something such as an FHA loan is a good strategy to minimize your upfront costs and hopefully get better loan terms. I would just take into account that a lower down payment will mean a higher monthly payment so be sure to run the numbers conservatively in order to ensure your STR revenue is able to carry your monthly payment with this higher mortgage cost.

@NA NA

One word of caution I would advise: 

If a community or local government is enacting restrictions and also regularly enforcing them, then its often a reflection of the local community sentiment which increases the chance of a neighborhood or nearby resident calling you in if they think you may be running an STR. So there is increased risk.

@Lenny Montesano

Congrats on your first step into real estate investing. You are honestly way ahead of the pack already simply by being willing to start learning about this topic in your early 20s. Congrats on that and best of luck on your pro baseball career. You are reading the right material already. The main advice I would recommend is to begin networking. There is likely going to be a real estate investor association meetup or club in your area, so it would be a great idea to begin attending their meetings and getting to know them. That would provide you with both knowledge to help you run numbers but also provide you with a funnel network that can bring deals to you once you are ready to move on an actual property to invest in. 

As far as waiting until you graduate: either option would work but I would imagine your biggest obstacle at the moment would be that you do not have a set record of wages from an employer. This would limit your options for the financing packages you might be able to get or which lenders would be willing to work with you since most lenders will want to see 2 years of pay to qualify you. There are other ways around this such as seller financing or private money lending but that is an obstacle you should be aware of. 

@Denise Lang

I have not personally taken the leap to manage a property out of state but I do manage properties in different cities within my own state that are several hours apart so much of my management is done remotely. I would say that a good strategy would be to first select an area that you actually want to invest in. This would be an area where you think the market is more likely to yield the level of investment return that you are targeting. Ideally it would be beneficial if this is also in an area that you would have interest in visiting from time to time since it is a good idea to still check on properties in person from time to time. Once you have selected your market, begin networking and building your "boots on the ground team". This is going to be a combination of agents, financers, property managers, ect. who are going to do the day to day tasks of finding and managing the property for you. It is really important to make sure you find a quality agent who is familiar with the market and neighborhoods there so they can point you in the best direction to meet your investment goals. The property manager will also be crucial since even an amazing investment on paper can turn very bad if the property itself is mismanaged. 

@Anibal Sanchez

Welcome to BiggerPockets and best of luck on your future ventures in real estate. If you have any questions at all, feel free to ask them here on this forum. The forum is very responsive and you will likely get a response very quickly from the members here. 

@Jefferey Eutsay

Is there a specific aspect of this deal that you are hoping to get advice on? Management? Financing structure? General ROI on investment?

@Reeti Peshawaria

This is a bit tricky to do since STR regulations are an emerging political topic so regulations are consistently shifting. I believe the best way to go about this would be to use your other metrics to find an STR target market that you believe you would like to work in first. Once you have selected this market, begin doing researching on the current regulations as well as the political climate regarding STRs in that market and whether or not there are any upcoming proposals on the market docket that may shift or change the current regulations. Its not only important to know what the current regulations are but to also prepare for potential changes to those regulations that may coming down the pipeline. This is often more difficult to find but one strategy would be to talk with STR investors who are active in the market there.

A general rule of thumb though (not a hard rule) is that if a market has a prolonged history of vacation rentals such as towns whose commerce is very dependent on tourism like beach or mountain towns, then there is a good chance than those towns have established their airBNB regulations decades ago and are likely stable. Major cities where STRs have only began rising up and gaining public spotlight with the rise of AirBNB are more likely to have more shifting and less stable regulatory environments since those areas are still in the process of trying to find the balance for STRs within their markets. 

@Sophanara Khoeun

I agree with the other comments here. The 3 issues you described are all fairly large red flags, especially for someone's first property. You described 3 structural problems with the house that will likely wind up costing a large amount of money (especially the foundation issue). On top of that, depending on the severity of the structural issues, you will also likely run into problems getting insurance on the property or wind up needing to purchase very expensive insurance. 

If you do want to move forward with this property, one recommendation I would get is to find a local contractor with experience that you trust and have him advice you on the scope of work that may need to be done as well as the cost it would take. This can then be used as a negotiation chip in order to lower the price of the property. Personally, I have walked away from any house that requires substantial structural work. Although there is potential profit in this kind of profit, there is also more risk associated as the repair costs can pile up quickly and create a scenario where you have invested more into the property than the repaired property would actually be worth. 

For property management, I am personally a fan of managing your first property (with proper education or mentorship before beginning) since this is where you will learn first hand what is required in managing a tenant. This will give you greater insight and what a property manager needs to do to efficiently manage your property once you are ready to hand the property over to a manager in the future. This will help you with insight into how to "manage the manager". 

House-hacking in a multi-family unit is one strategy I wish I had been aware of when I chose to purchase my first property. The property was my primary residence for a decade and now functions as rental unit so I am happy with the purchase overall and it has worked out well. However, if I had started off with a house hack, I could have lower my monthly mortgage tremendously which would have helped me build up my savings at a much quicker pace than I had. I am currently house-hacking in a new property where the rental revenue is able to cover the full mortgage and then some. This is a great strategy to use for beginners who want to get a foot in the door of investing while also learning crucial skills just as tenant management.