All Forum Posts by: Marshall Leipprandt

@Jorge Herrera I haven't used Rentometer but I've used Mashvisor and PriceLabs which are very similar. In my experience, I actually did not find the information from those platforms super accurate for what my strategy was. I think it can be a good first landing spot to gauge an area, but certainly nothing to trust blindly. 

I would recommend starting on one of those platforms to get some general data and then after narrowing down your strategy, do some competitor research like looking at what other comparable properties near you are renting for. Definitely want to be as thorough as possible in your research if you are possibly basing a purchase decision with the data that you uncover.

Gotcha. Well, if you qualify for an FHA loan, that could work. Standard FHA is 3.5% down. There may also be some first-time buyer loan programs. A lot of the big lenders do FHA loans - could be a good place to start researching.

@Benjamin Furney What exactly do you mean by flexible? There are so many banks and lenders around here, narrowing your goals down might help others who have connections. Like maybe banks that are doing ARMs? DSCR loans? Low-down payment programs?

@Rafael Hernandez If you're using a mortgage product that requires owner occupancy, don't abuse that. That isn't the way you want to start your investing career. House-hacking a bedroom is fine since you'd also be living there, but I WOULD NOT follow the suggestion of the realtors and put utilities in your name just to give the appearance that you're living there and then rent it out to other people completely. Terrible advice from those Realtors. I don't know why they would even mention it to you and then tell you "to proceed with caution". I would find different realtors who want to actually help you and not just get a commission.

I would continue looking for a 2 bedroom property if you can find one in a decent area. Especially if you are considering renting out one of your rooms, having a 2 bedroom is necessary. Be patient with the search and don't rush into anything. If you do find something, live there for the required duration as required by your mortgage and do it the right way. After that, feel free to rent by the room or rent through Airbnb if allowed in the neighborhood or Condo building per your HOA, etc.

I know the market is tough out there, but if you find a good realtor and keep persistent in your search, you can make it happen if it is something you really want. If you keep searching and just can't find anything, keep saving, building credit, learning about real estate in your local market and wait until the timing is right. Good luck!

@Emily De Leon I threw some $ into Fundrise in 2018 and it's done well. In my experience, Fundrise is a professionally ran company and they offer a clear and understandable investing mechanism for someone who doesn't want to get into active RE investment. They show you which projects your $ is being invested in and provide the appropriate documentation at year end for taxes. Honestly, I don't spend much time on their platform as I've wanted it to be as passive as possible...I check once a quarter.

@Khoi Nguyen The problem with $200 cash flow is when you have a large issue arise after a year, your entire year's cash flow will be wiped out because you may not have had enough time to accumulate reserves in your maintenance and cap-ex accounts. 

Taxes and depreciation are definitely a factor, but I would hold that priority behind cash flow and appreciation potential. It should be more the icing on the cake instead of a reason you pursue a deal (in my opinion). Seek a tax professional's judgement to get a better idea of how this would play out in you and your wife's unique circumstance.

@Evan Rank Wait until you graduate and get a good W2 job. Once you're there, find a good lender and get a pre-approval. Do some research on small multifamily homes or homes with ADUs and plan to house hack. Find a property that suits your needs and start making offers. Once you hopefully have closed on a property, treat it like a business and establish the systems that are needed to scale. Have your tenants/roommates sign leases, collect security deposits, find a good handyman/contractor, etc.

Having no debt out of college puts you ahead of many of your peers, so use that to your advantage. You could probably use this strategy several times over the course of 3-5 years without too much difficulty. Once you get experience managing several properties, you'll learn of other opportunities to grow your real estate holdings and scale your business.

@Giancarlo Ameglio I looked at a property a year ago that I considered renting by the room. I know people are making it work out there, but I'm glad I didn't go for it. 

The idea of renting 16 rooms by the room to college students means a couple of things to me as an owner/landlord:

1) There will be high turnover which puts A LOT of admin work on you

2) The property will likely not be treated with as much care as more mature tenants leading to higher repairs and maintenance costs

3) They will take 20 minute showers and will leave the windows open and the AC running in July; much higher utility expenses as @Carolyn Yates mentioned

4) Overall headaches of potentially having to shut down parties, etc. and other associated liability concerns

Lastly, if you're saying that your overall cashflow would be $500/month after you moved out after a year of occupancy, I would ask you to then consider how much time you think you'd be spending writing leases, screening tenants, handling issues, etc. I don't think it would be worth your time. $500/month cashflow seems enticing when solely looking at CoC ROI on a low-down payment loan program, but to me, it doesn't translate into a practical long-term investment. Just my thoughts, I've been proven wrong before :)

@Stacy Ford SoCal is going to be incredibly difficult to cash flow unless you put 30-40% down, but even then, your CoC ROI wouldn't be anything special.

If you want to buy in SoCal, I would encourage you to think differently about the fundamentals of the investment. You said you are currently renting, well what is your rent now and what would be your total housing cost if you lived in the ADU and rented the main house? If it would be less than or equal to what your rent is now, I think that it could make sense in your case to buy. If you could achieve that then you would 1) decrease your monthly housing cost, 2) be building equity as your tenant in the main house is helping pay down your principal 3) you would be able to access the long-term appreciation of the property and 4) you would reap the tax advantages of owning real estate (i.e depreciation, etc).

I own a SFH in LA (that is now a rental) but have looked into multifamily properties myself extensively in SoCal and this is basically the conclusion I've come to. If I buy one in the future, it will be because I'd rather own an asset that other tenants are helping pay for than to continue to hand my rent over to someone else. Obviously, this can really only work in a situation where you are not relying on real estate to replace your W2 income in the short-term. If that is your goal, there are likely markets out of state where you could use that $200K to buy a cash-flowing asset, but of course its not SoCal :)

@Jed Brinkley Canada is on my list, but didn’t feel like messing with all of their rules this go around. Was also doing the trip in an electric car and the infrastructure up that way is much more sparse.

I’d love to see Toronto and Montreal, but also want to see the more scenic, natural beauty out West. I actually grew up in the Thumb of Michigan where we could cross over from Port Huron, MI into Sarnia by simply stating our business and showing an ID. How things have changed!