All Forum Posts by: Laura Jackson

@Will Barnard  I added a studio to the property, it's 10x12, insulated, drywall, skylights, and modern. There is so much more I want to do with it, so it is included in the renovation budget. 

I'm about to listen to your show now, episode #130. Thank you for your comments, Will!

I've been thinking about the advice from this thread and using equity to buy other properties.  I do not want to over-leverage myself so I was thinking a way to avoid doing that is to pull $150,000 equity out of my LA house and use that to buy another investment property all cash. Once that property is stable and meeting cash flow projections, I can refinance, pull my cash out, and buy another property cash. Does anyone have any thoughts on this? 

@Alex Grosvenor, forgive me, that is what I meant. I'll consult with a Dallas property manager. In Los Angeles, all of the regional property managers that work for the company I work for are licensed.

@Alexander Szikla appreciate it.  :)

@Alex Grosvenor 

Thank you! My thought is that I am somewhat conservative and prefer not pulling out equity in my properties. However, at this stage of my real estate investing, I understand that this can be to my detriment. I need to find the appropriate balance. Right now, I am working to save up cash to buy more when I can use equity to buy.

I feel pretty good about my numbers but do you suggest, I contact a realtor to validate my rental projections once the upgrades are complete?  

@Michael Johnson Thanks for sharing! why do you like to acquire more properties? I am curious about your strategy. For me, it is not about the number of properties but more about cash flow and appreciation. Do you like to close more properties for diversity? Do you invest in different markets or one? 

@Alexander Szikla appreciate you chiming in.  For the LA property, in addition to the extra cash flow, the value would increase by more than I invest in the rehab. 

For the Dallas property, the rehab is minor - floors, front door, bathroom upgrades - I could even see if the current tenant would live through them and ask how much more she is willing to pay for the upgrades. She has expressed wanting a more updated place. 

Have you ever updated an asset while a tenant lived there and increased the rent?

@Todd Rasmussen I had to read your post a couple of times to retain all your points; thank you for making my wheels turn.

The math behind rehabbing the LA house is how I should be thinking about it.

I appreciate your comment about 2-4 units A/B class not cash flowing in LA. I ran into this with one of my flips. I wanted to hold one, but the numbers just did not make sense, so I sold at a profit instead.

To answer your question, both of my flips were profitable, but I made many mistakes. My hard money loan almost killed the deal. Since my 0% credit card limits could not cover all the rehab costs, I took out a Sofi loan with a 15% interest rate. I overspent on quality materials, and on one of the flips, I accepted the first offer instead of waiting… I received a backup offer days later for $15,000 more, but the first buyer closed. I learned to never invest from a position of weakness. After that, I took a step back to get my financial house in order before adding to my portfolio. Here I am 2-3 years later. In hindsight, my lack of knowledge is what really almost killed the deal.

My Dallas property is in one of their most desirable neighborhoods. Zillow predicts Dallas home values will go up 10.6% in the next year. You are correct; I did not calculate the opportunity cost of making zero percent on the equity. I was focused on the debt pay down and Dallas appreciating. I plan to sell when my equity increases by another $100,000. I am unsure if this is a good plan, and your comment is a reminder that I must reevaluate my strategy.

Once I renovate my LA property, how can I stay in LA and cash flow? Do I have to find unicorn deals or problem properties, as mentioned above?  I think it's good advice but would love to know your thoughts. 

Thank you again. Really helpful.

@Joshua Nowell Thank you, Joshua, for the advice. Much appreciated. I am going to take a look at multi-units that have been sitting for a while to see what I find. I recently listened to Brandon Turner and Robert talk about going after "hard" properties and also advising investors to think outside of the box. Your suggestion reminds me to do just that. 

I am still saving to have 6-month reserves for my current rentals before buying another. Have you been successful in finding deals in NYC?

Hi Biggerpockets forum! I am in real need of some advice on what to do next, and would greatly appreciate investors chiming in.
After spending the last couple of years paying off debt, I am debt-free minus my two rental properties. I have a 6-month emergency fund and will soon have an additional $35,000 saved. I want to invest in multifamily real estate but I am wondering which path to take. I would love to buy a 2-4plex, live in one, and lease the other unit(s), but in Los Angeles, where I live, it would cost $1 - $1.2 million to buy in a safe neighborhood. I would need an income of $220,000 to qualify, while I am earning half of that at the moment. 

I have many questions but will start with these two:

1) I’ve read the Long Distance Investing book by Robert Greene, an awesome book but still, I prefer to keep my investments local. Can I buy in LA without hundreds of thousands of dollars and without equity partners or must I invest in other markets?

2) I currently have two rental properties that have the potential of cash flowing $1,200 - $1,500 more per month, but I must first invest $85,000 in renovating/upgrading them. Is it the best move to do the renovations now before jumping to buying multifamily?
Cash flow is my main goal. My plan is to Invest in class A/B 2-4 unit buildings to hold long-term, and I am eager to finally get started!

Thank you for reading this far. Here is some information about my two rental properties and my RE experience/ background that may be helpful to know:

Rental #1

Location: Los Angeles

Purchased in 2015I have a house that I am renting out. It is cash flowing $500 after all expenses. If it were leased at the market rate the monthly cash flow would be $900. If I were to invest $77,000 in renovating it, I estimate that it would cash flow $1200 per month. This would require the house to be vacant for 2-3 months which will cost me an additional $9,000 in holding cost. Current equity is $400,000.

Rental #2

Location: Dallas

Purchased in 2008.

I have a townhouse that breaks even ($0 cash flow, $0 loss). I have $160,000 in equity. It could use a minor facelift which would cost $8,000. I may be able to get another $150 - $300 once done.

I am a Property Manager

I am an on-site property manager so I do not have any housing costs. I manage 100 doors for a property management company.

I have done Flips

I’ve flipped two properties in 2017. I learned so much but I only want to buy and hold now.

I am a RE Broker

I also have my real estate broker's license. I obtained it for RE investing only. 

I’m a W2 employee too

I am a w2 employee. I have a main 9-5 job in addition to being a part-time property manager. 

In advance, thank you for providing any valuable suggestions you may have to help me kickstart my real estate multifamily investing. I am eager to grow my portfolio of investment properties.