All Forum Posts by: Matt Byrne

@John Warren At this point, I'm open to moving to most places that everyone here has mentioned. Although they're maybe not as hot as some of the areas in the north and NW, as long as the numbers work for cash flow after I'd move out of the property, I'd be interested.

@Ashley Mitchell I love your attitude and optimism! From what I've heard, persistence and continuing onward are often what set apart the successful investors from those who lose interest.

@Alex Ferraro That absolutely makes sense. I've been thinking about what is non-negotiable, and really I would say (1) general safety and (2) that the numbers work for the cash flow as a long-term investment. There are some metrics like median household income, median house value, crime rates, and neighborhood unemployment that I do think are very important to stick to, but all of these areas meet the criteria I'm using. Working hard for off-market deals and/or adding value through some sort of construction/rehab are without a doubt something I am willing to do! My future brother-in-law and I are working on this together, and we have agreed that the thought of taking on rehabs for our first deal seems like it may be taking on a lot. One of the hardest parts I'm running into when analyzing properties is estimating rehab costs.

@Esteban Desfassiaux That cash flow of $562 is actually like spot-on with what I'm getting. Assuming PITI of $1,080, and operating expenses of about the same amount, if you put down 20%, and the gross monthly rent is $2,300, it looks like a COCROI of 11.4%. In my opinion, this is awesome, and I'd be inclined to look further into it if I were you.

@Tom Shallcross Thanks for the reply, and for the information. I really appreciate you taking the time to send these resources my way. I can totally understand that house-hacking will likely not cash-flow much, if anything, while I am living in one of the units.

Investing on the North and NW side of the city seems like the logical move - so many people (especially young, recently-graduated college students) seem to be moving to that area and renting out to get the city experience. The properties I've looked at can be quite expensive, which makes me look for other areas. Some of the more affordable areas are also less popular, so I don't know if it's a wise move as an investor to focus on an area that isn't as hyped up. Areas like Berwyn, Cicero, Riverside, etc., are in a decent price range, but also don't have statistics that are as compelling in terms of growth.

There are also other suburbs further west, like Lombard and Villa Park, that I have been looking into, but a concern there is that in the past two years, only 40 multi-family properties have closed in Addison, Elmhurst, Lombard, and Villa Park. I don't think the rental market would be as promising in the areas further away from the city, too.

Hey everyone,

I’m in the process of getting my first real-estate deal planned out, and have decided that a house-hack makes the most sense. I’ve heard time and time again that it’s a great way to get introduced to the business, and it will work well for my current way of life. Part of finding the right deal, from my understanding, is choosing a market, learning as much as possible about that market, and making connections and getting out there to find the properties. My business partner and I have been analyzing different areas in Chicago, and we are not quite sure where we want to invest - the city or the suburbs. Cash-flow is the top priority; appreciation would be nice. There are cases for both locations, so I am wondering if any of you have experience house-hacking in Chicago (or the suburbs) or investing in multi-family units in these areas. Are there areas you have had particular success in? Areas you would avoid (that otherwise would be considered 'fine' or 'safe' neighborhoods by non-investors)? Would you avoid investing in Chicago all together? I would love to hear any insights, and always appreciate your sharing of your knowledge.

@Ryan Hill I really appreciate the input - I don't have all of these things in place. I have been looking at different markets throughout the US, and am starting to narrow in on and focus on a few, as I want to commit to a growing area and start building connections and a foundation there. Long-distance investing seems like it might be the better option in terms of improving the likelihood of finding deals. I do have access to (some) money and do have pretty specific criteria on what kind of deals I am looking for; I do not have access to off-market deals and don't have property managers or contractors (or any team) in place.

Really, what's holding me back is fear that I'm 'not ready' yet. Like ambivalence in reaching out to professionals in markets due to lack of knowledge, uncertainty in how things will go, and belief that I need to learn more before putting myself out there.

@Nicholas L. I do have some savings, and my expenses are pretty low (I'm currently in a situation living with family and I don't have to pay rent). I also have a business partner who's in a similar situation to me with learning and ambition, and he and I have been outlining our goals, strategies, ideas, etc., so I won't be going at it alone and do not have to risk everything of mine necessarily. I know it's not a good idea to spend everything on my first property, but it's also tempting if the circumstances are right and the numbers work. 

Thank you all for your replies!

@Andrea Weule Running the numbers is what has convinced me that this is a viable and achievable way of creating passive income. Literally everything seems to boil down to the numbers, and the numbers don't lie, which is true across basically every industry and area of life. I'm working on developing criteria to go by, and plan to start making offers on properties that meet the criteria, even if they seem like they won't get accepted.

Hey everyone, 

I am a new investor who's in the learning phase of my real estate ventures, and have a definite sense of urgency to act. Over the past few months, I've been doing a lot to build my knowledge, and am wondering: how long did you study and analyze before completing your first deal? Would you recommend that newbies jump in sooner rather than later, or do you think it's better to wait 6 months, a year, two years, etc.? A lot of posts I've read say that the best way to learn is to jump in and get your first property, but I also understand that many investors make impulsive decisions and that can potentially prevent someone from future success. I appreciate any feedback!

BiggerPockets! Hope everyone is doing well.

I have been analyzing properties using Zillow, and follow Brandon Turner's advice to look for the "home run" number on each property (whatever purchasing price would make it a great deal). I'm noticing that when I lower the purchasing price on Zillow's calculator, the estimated monthly cost, which includes principal & interest, property taxes, and home insurance, lowers, which makes sense. The thing that's confusing me is that property taxes and home insurance estimates decrease, and I am not sure if this is accurate. So for example:

Purchase price: $120,000

Estimated principal & interest: $432/month

Estimated property taxes: $118/month

Estimated home insurance: $42/month

If I change the purchase price to $120,000, the estimates become:

Purchase price: $100,000

Estimated principal & interest: $360/month

Estimated property taxes: $98/month

Estimated home insurance: $35/month

If I am running the numbers and comparing the cash flow for purchasing for $120,000 vs. $100,000, is it a better/more accurate approach to adjust all three of these numbers, or would it make sense that only the mortgage payment would decrease? If anyone has some insight, I'd appreciate it a lot!

@Satyam Mistry Thanks for your reply, too. To what extent have you been able to figure things out and learn through your own online research? I can see average rents and prices on Zillow (which is an insanely impressive site), and am thinking I'd like to actually try to locals, if possible, to ask them for their opinions on things and knowledge of the market. 

@Corey Hawkinson Thanks for your reply. All of those reasons make sense, and do explain how you can still be getting a good deal if buying from an investor. The trust factor is another topic that seems like it may be tough to navigate, even beyond just buying from someone. Like, in asking an investor/landlord how the rental market is, or asking about pricing, I am wary in taking what anyone says as fact without considering what he/she may be thinking. I know there are others out there who want to help and want to see fellow investors succeed, so that's encouraging.

Congrats on completing a 1031 exchange! That's a milestone that I can't wait to get to, whenever that may be haha.

What's up, everyone,

I'm a complete novice who has been bitten by the real estate bug, igniting a serious interest in this business. I've been reading, analyzing properties, listening to podcasts, and talking to people about it, and am looking to utilize as many other resources as I can, so this seems like a fantastic place to go. I really hope to meet like-minded people, as it's evident just how important a solid network is.

All that said, I have a question relating to buying a rental, and would appreciate any insight. I'm looking on Zillow at different properties, and sometimes feel as though I can assume it's being sold by an investor. This makes me question the soundness of the investment. If the property seems like it has potential, and some numbers are looking decent, yet it is being sold by an investor, where does that leave you? Do you assume it must be a bad investment? Do you assume the seller was a bad investor and did not run his business successfully, and that it could be a great investment? Again, this assumes the seller is an investor, but this dilemma is something with which I'm having some difficulty. Thanks in advance for any/all responses.