All Forum Posts by: Matt Solis

 Appreciate the mention Denver! @Ravi Kognaq Below are the rental strategies you can use to break even in DFW. They are listed in order of my preference.

Co-Living - can expect 15% cash on cash return with a solid deal that has 6-8 bedrooms. Each bedroom would generate on average $750 a month in gross rent.

Mid-Term Rental - can expect around 10% cash on cash return, or break even if you use a specialized property manager. This strategy can be much more time intensive if you want to optimize your lead flow and consistently book big contracts.

Long-Term Rental - only way that long term rentals will break even is it must have an ADU or separate rentable unit to put the numbers over the edge. Or somehow you find one off market and get it at 70-80% value but it would need work.

Thanks for tagging me @Denver McClure. @James Dugan, Fort Worth has been known to crack down on PadSplits, but I do have several clients that are successfully operating there regardless. I had a client who actually decided to pursue converting the house to a boarding house to avoid any problems in the future. I think he's in the process right now so I'm not sure how it's turned out, but last time I spoke with him it seemed that it was going well.

I always tell people looking to do co-living that there is a certain amount of risk that you have to be willing to take on. And yes, you're probably more likely to run into an issue in Fort Worth than you would be in Dallas. Make sure you have other exit strategies in place, Fort Worth allows up to 5 unrelated people last time I checked.

Thanks for the shout @Denver McClure. @Kevin Connauton, I agree with you that although Pad Split is a great choice for getting the rooms filled, they don't cover all your bases in terms of property management. If you engage with Pad Split and you're out of state, you'll probably want to hire a PM as well. I have a referral I can send you, I recommend going with an individual with experience in co living rather than a traditional company who doesn't really understand the model. Personally, I self manage but have built systems to allow it to be fully remote and very passive. Happy to help you with either option, send me a DM.

If it were me I would do a HELOC to be able to tap into that equity, and use that to fund other investments. Keep the house and allow it to appreciate more. I would also explore MTR to maximize rents.

You're going to want to leverage house hacking or creative financing to get to 4-6 properties in just 3 years. 160k would be enough for 1, maybe 2 deals the conventional way, and with your current income, it would take you a few years to replenish your war chest for another deal. House hacking is going to allow you to get into your next property for 20-30k on the low end. Creative deals could be for even less. I've been house hacking for 3 years and have acquired 4 properties. Working on getting more creative now as well. I'd say your first move should be to house hack and get out of the apartment, this is the most beginner-friendly way to get started, and as you continue to educate yourself you'll be better equipped to find other deals as you learn.

Where is the property located? Have you looked into converting to a mid term rental? If it's in a good location, and the property is in great condition, you could furnish the house and operate as an MTR. There are companies that can do this for you.

Having the property in your name will not stop you from taking a loss on your taxes, you don't need to move it to an LLC to accomplish that.

Purchasing a new primary home, but underwriting it as a rental, is the way to go. This will allow you to acquire another investment property with favorable terms (better interest rates, WAY less money down). 5% vs 20% down is massive and will help you acquire more real estate faster in the long run. I'd consider renting out your property in Frisco as a mid term rental, you'll typically see double the rents vs a long term rental. I've acquired 4 properties in the last 3 1/2 years and all of them have been occupied by me for the first year. I do a mix of rent by the room and mid-term rentals and have seen great results. Would be happy to connect, I'll send you a DM.

I'd recommend going to real estate meet-ups. There are plenty of guys out there who have connections to help you find a construction crew. To be honest, I'd focus more on finding the deals. That's the hard part. Where are you looking? On market? Wholesaler lists? I'd be happy to connect with you to get some ideas flowing. I'll send you a DM.

When you're first starting, I recommend running analysis on at least 100 deals. After that, you'll be much more comfortable and have the confidence to take action when you find a good deal. Most people want cash flow, and these days, you have to get creative to make that happen. Strategies like rent by the room, mid-term rental, short-term rental, assisted living, and section 8, are ways people are making it happen. Pick one strategy and master the due diligence side of it.

Another thing to keep in mind is how much capital you have, and how many properties you want to acquire. If you save 50k per year, but it costs you 100k to acquire a rental, you're going to get 1 rental every other year which is way too slow to move the needle. Try to find creative deals where you have less money out of pocket. Check out the subto community. House hacking is another option for high leverage.

@Raghavendra Jakkani

1. I'd recommend doing an upfront screening prior to showing the property. One thing you can do to help is doing a video walkthrough, provide a floorplan scan, or a 3D walkthrough (matterport) of the house. This way, the tenants can see the house prior to applying.

2. Send me a DM and I'll send you my pre screening form I have them fill out. It asks them a bunch of questions so I can know whether or not they should even bother spending the money to apply. I use go4rent when screening, they will take care of background check, checking for employment history, and landlord history.

3. Stick to the basics. Credit above 600, 3X the rent in income, no evictions, clean background check.

4. Go4rent

5. They'll have paperwork.

6. If you're not using an agent to list it on MLS you most likely won't encounter another agent.