All Forum Posts by: Laura Shinkle

Quote from @Hassan Karaouni:

Thank you all!

- @Ryan Thomson: I appreciate you sharing your breakdown and I have two questions. Vacancy Rate: what's your process like for filling vacancies and do you find that 5% is an accurate reserve rate? I feel like 5-10% is low, but I've never tried to fill a vacancy before so I really don't know. Maintenance and CapEx Budget: do you have a strong opinion that these should be reserved separately? In my calculation, I just put one lump sum of 10%.

- @Laura Shinkle: I'm trying to learn more about property management options, so I appreciate your deep dive there. Live In: can you share why property managers might be reluctant to manage tenants in a home that I live in too? I would plan to live in the home. Rent Style: I'm not sure on renting by room vs unit, long vs short, etc but I'm generally thinking that I will rent by room, prioritize medium- and long-term rentals (except for sometimes Airbnb'ing my own space if I'm not there), and fully furnish the space.

Live IN: I'm not sure and I don't want to speak for all property managers. That said, I can speculate and hopefully a PM will shout out here too. Most PM I deal with want the investor/owner to be as hands off as possible. You know the phrase, "too many cooks in the kitchen"? I think that would apply here. It gets messier when the owner is around a lot, wants to fix things themselves, etc (whether they live in the home or just nearby) It makes it challenging to be the manager of the property and the tenants when the tenants and owner know each other and may inadvertently (or on purpose) do things without the PM knowledge. (ie tenants say, "well the owner said I could just take the cost of repair off the rent" and then as the PM you are chasing around trying to figure out what happened). Again, that's speculation. That said, what would the benefit be for you as the owner to have a PM if you live in the house? You'll know if the dishwasher stops working and needs repair, etc. You may also want to be more selective with people you live with vs just letting the PM pick your roommates for you. 
Rent Style: Once you're ready, talk to co-hosts and PM for STRs to see what demand they're seeing in your area. And, of course, what they'd be comfortable doing (only entire home vs room rentals). Trends can change between now and then, so I wouldn't put too much of an emphasis on this, but know that you have options. 
This is all just my two cents, I hope it's helpful and at least bringing up questions to ask yourself as you find a home. Best of luck!

@Andrew Postell what's the income limit for that product? And it's conventional, not FHA/VA?

@Hassan Karaouni you've definitely put a lot of thought into this! 

All your numbers look about right to me (or at least I have no argument for anything different). 

Annual Appreciation is always unknown. 3-4% is the average, so you're spot on. 

Property Management Fees: Are you going to be wanting a property manager while you're living there, or only once you moved out? In my experience, it would be tough (impossible here) to find a property manager to manage tenants in a home that you live in. Also, how will you be renting if/when you move out? By the room, furnished/unfurnished, long term, short term? The PM fees will vary based on your rental strategy then. Also consider that you get what you pay for. A PM that is willing to lower their rate to 8% may not be the best person to be managing your biggest asset. A PM is worth their weight in gold if you find a good one. 

Expenditures: Do you mean utilities, wifi, etc or things like soap, paper towels, etc? Or cap Ex/maintenance? If you are househacking rooms in your home, you may want to decide now whether you'll be charging for utilities month by month based on usage, or if the rent will include utilities. For cap ex/maintenance that's fine. 

Insurance seems low to me for a $1M home, but an insurance agent or Realtor in your area would be the best person to check with on that.

Hope that helps!

Hi @Hunter Gibson you can check out where the areas are for hospitals, which would be the best place to find a rental if you're specifically targeting travel nurses. That said, I've noticed a big increase in options on Furnished Finder lately, so I wouldn't pigeon hole yourself that much. There are a lot more tenants to be found than just travel nursing. In fact, they're less than 50% of the traffic on Furnished Finder these days. Travel nurses are also very focused on budget and in my experience will prioritize rent price over most other things. 

Are you wanting to do mid term or short term rentals? Your tenants can be different for the two different strategies. 

I agree with the other comments above. I love the creativity, but taking out debt to buy more debt doesn't sound like a good plan. 

I love @Ryan Thomson's suggestion to find a co-signer. See if they're willing to put up some or all of the downpayment as a gift to get you started. Depending on your family's personalities, appeal to how they would see this ask. Would numbers and showing an example of what you want to do work best, or would you be better off appealing to the heart? lol

Since you have a full ride to school, you could sock away a decent amount of money with side gigs. You may also qualify for down payment assistance programs and other grants in your state since (I'm assuming) your income isn't too high. 

I understand the thought and technicalities of your primary residence being a liability (even though I disagree with it!) If it doesn't bring you a return or bring money in, it's a liability. 

However, you have to live somewhere. Would you also not call renting a liability, even though there's no mortgage, there is a lease. Unless you live in a van down by the river, you're going to pay to live somewhere. 

Since it's a househack and you're bringing in income (even if the tenant isn't paying 100% for your expenses), I'd call it an asset. Without it, you wouldn't be bringing in that additional income, and you'd likely be paying out more per month in your budget (for rent elsewhere). 

I think folks try to make this black and white, but that's the beauty of real estate investing. Nothing is black and white, right or wrong. Just what you decide to do with it. 

Regardless of asset vs liability, it's still a great way. to build wealth ;)

Hi @Arti Ta, there are definitely new constructions that allow rentals. It will depend on what your strategy is, and how many investors they've already sold to. Most builders have a certain percentage they're willing/able to sell to investors. 

They typically don't advertise it, so either use a Realtor to do the legwork for you, or you'll be calling a ton of different neighborhoods

Hey Joel, that's exciting! I'd recommend looking for meetups in and around the Charlotte area. That's a great way to continue learning, meet wholesalers and other investors in person. Also, making sure you're specific on your buy box will help make it memorable and not get overwhelmed with 'deals' that aren't what you're looking for. Good luck!

Quote from @Ajay Renga:

Quote from @Laura Shinkle:

Quote from @Ajay Renga:

Hello!

I am new to BP and thrilled to meet you all virtually. I am based out of IL and own our primary residence in the Greater Chicago area suburb. Looking to buy our first rental investment, preferably long term as I am a buy and a hold investor. The high property taxes in IL (2nd highest in all 50 states) combined with high interest rates now, kills any positive cash flow, so looking to invest out of state. Budget $300k or below and SFH. Ideally looking to make $300-$500 cash flow monthly, with some decent appreciation of the property over time.

Preference is sun belt states with low property taxes. Any suggestions and ideas are appreciated! Thank you!!

 I saw that @John O'Leary mentioned the Charlotte market. I'm an agent in the area and work with investors of all kinds. For this area, getting $300-$500/door is not going to happen for a LTR, unfortunately. At least, not if you're accounting for Cap Ex, Vacancy, etc and are only wanting to put 20-25% down. My calculations for the last 6 months or so require 35-40% down to get the cash flow. The rental rates just haven't caught up with purchase prices, let alone the increased interest rates. 

A lot of investors are turning to the STR and MTR strategies here. They do require more up front work, but with the use of a property manager can be a good option.

I'd love to see if anyone posts about the other areas mentioned, if they're a better option.

 Thanks for the insight @Laura Shinkle! I see some homes in the Conway/Myrtle beach areas in SC, but not sure how good are these for STRs. With no prior experience with STRs especially with constant up-keep, maintenance, and other fees. Need to check local bylaws as well and any other HOA fees which might eat any cash flow profit for STRs.

I don't mind MFH in the Research triangle area and working with good property manager if the deal is good. Appreciate any suggestions!

Myrtle Beach is definitely a vacation destination. That said, I don't know enough about those areas to speak to actually numbers/ROI to speak intelligently on them. If you find a good team down there, then the maintenance and up keep are done for you. Also, they should know any laws around STRs.

One guest speaker on one of the podcasts (I can't remember which one/episode, sorry!) that you actually get less wear and tear on STR properties since most guests are staying for only a short amount of time, and an agent/PM is going into the property much more frequently, so any issues are caught early, keeping any repair costs low. There is always the chance of a party booking or someone destroying the property, just like there is always that chance with a LTR as well.

Good luck and keep researching!

Quote from @Ajay Renga:

Hello!

I am new to BP and thrilled to meet you all virtually. I am based out of IL and own our primary residence in the Greater Chicago area suburb. Looking to buy our first rental investment, preferably long term as I am a buy and a hold investor. The high property taxes in IL (2nd highest in all 50 states) combined with high interest rates now, kills any positive cash flow, so looking to invest out of state. Budget $300k or below and SFH. Ideally looking to make $300-$500 cash flow monthly, with some decent appreciation of the property over time.

Preference is sun belt states with low property taxes. Any suggestions and ideas are appreciated! Thank you!!

 I saw that @John O'Leary mentioned the Charlotte market. I'm an agent in the area and work with investors of all kinds. For this area, getting $300-$500/door is not going to happen for a LTR, unfortunately. At least, not if you're accounting for Cap Ex, Vacancy, etc and are only wanting to put 20-25% down. My calculations for the last 6 months or so require 35-40% down to get the cash flow. The rental rates just haven't caught up with purchase prices, let alone the increased interest rates. 

A lot of investors are turning to the STR and MTR strategies here. They do require more up front work, but with the use of a property manager can be a good option.

I'd love to see if anyone posts about the other areas mentioned, if they're a better option.