All Forum Posts by: Leo Watts

@Muoki Musau

Sometimes narrowing down your strategy is actually the hardest part of investing!

I would target a few pockets you like, and start seeing what you can uncover. Run some numbers on rentals, talk to some owners.

But yea, I think a targeted approach will generally lead to better outcomes!

Let me know if I can help.

@Aiden Hatchett

I house hacked a 5 bedroom near bishop arts for 2 years. Did about 15k in basic cosmetic renovations after acquisition. I was renting 4 rooms on Airbnb mostly by the month to students / travel nurses / flight attendants. And was generating 2k a month profit plus living for free. I snagged a cheap preforeclosure so it worked well for me. I was getting 900 for beds with shared baths and 1100 for the room with a private bath. Dunno how the market is doing on room rentals right now with covid.

@Dave Poeppelmeier

Airbnb can be very lucrative. I have some friends that do well with 3 - 5 bedroom Airbnb’s. But, I can also tell you that it’s very hands on. I had my Airbnb listed as a whole house rental for some time (5 bedrooms). Unfortunately it attracted a lot of partiers on the weekend. I could get big bookings for weekends but would struggle to fill non holiday weekdays. It is also a lot of work with managing cleaners and laundry. It’s not a passive investment. Or the more passive it gets the more you are paying out your profits to other people that work for you. Plus Airbnb increasingly is poorly run with bad customer service and unfriendly policies to hosts. Basically, you could make double or triple a long term rental, or you could make slightly more for lots of work. I would find a property that could make money as a str or ltr. Run your numbers based on local short term rental comps. If you want to do Airbnb give it a shot but also have the back up plan if it doesn’t work like you thought. I have my 5 bed house rented out long term (lost 20k in booking during the pandemic) and its way less stress for not that less money.

@Joaquin Camarasa

Here’s the type of property that would fit OP’s budget.

https://www.homesnap.com/VA/Alexandria/2720-Memorial-Street?a=478491931

It's important to run the numbers based on renting out two rooms upstairs and then renting the basement, although likely not fully separated, depending on zoning and ADU regulations as Joaquin mentioned.

@Phil K.

Ideally you focus on a specific area and start to learn it well. Where are you focusing?

@Benyam Ephrem

If you jump from 400 to 500 you have dozens more options in NoVa in Alexandria, Falls Church, Annandale and Springfield for single family homes with a potential for house hacking and or renting out the basement. Is your budget fixed? 400 will be tough for a stand-alone home in NoVa for house hacking unless you’re going to target off market deals.

@Masud Khan

BRRR doesn't really work if you're using hard money. The strategy works if you're getting a low interest rate loan so your monthly payments are lower and you can cash flow. Unless you're just talking about the acquisition cost and then you will refinance?

@Muoki Musau

I drive for dollars every week in the most expensive neighborhoods in McLean.

I work for a builder though, so the numbers are a bit different. We are building 3 to 7 million dollar houses.

You won’t find people in foreclosure or people who are behind on property taxes.

Mostly people will not sell at a big time discount as they are not in a rush and have other homes and other options.

You have to catch people at the right time and make them a strong and competitive offer.

But I look for older homes that the owner has had for decades, usually.

I would make sure you’re really getting a correct market value. Meaning a different building, different unit layout, more than a few months ago, could all be skewing the calculation of the real market value.

I would also make sure you have an accurate rehab estimate. Have you walked the property with a contractor? Unless you have a signed contract with a scope of work, and even then, the estimate may be coming in low, a common strategy to get a client, underestimating the rehab (oh its labor only, doesn’t include this or that, demo and hauling not included, and or he’s not licensed which can be a problem on a quick flip.)

I suggest really thinking through for the worst case scenario, that the condo doesn’t appraise for what you expect, the rehab is higher than you budgeted, you may struggle to find a tenant (days on market for condo rentals is high right now, lots of price drops).

As a buy and hold, you really need to look at the HOA and how that affects your cash flow and return on investment. Then see if the money you are tying up would be better spent on your house hack.

Also I would talk to a lender and see if you can carry two mortgages based on your DTI.

The uncertainty of the economy etc adds another wrinkle to it all, and everyone has a different outlook. I predict we will see some softening in the next year, but how much and how rapidly is impossible to predict.

Downtown mt rainier and the arts district in hyattsville are my top choices for walkability and cute housing stock. Also more expensive accordingly. Cheverly has nice topography and cute houses and is a bit cheaper and a little under the radar.