All Forum Posts by: Mehdi Mir

New construction is great to live in as a personal home, but normally not great for investors for a number of reasons. #1 is most of the new communities don't sell to investors. They probably have incentives for owner/occupants. #2 Most new construction communities prohibit rentals or severely restrict them through the HOA. #3 if the pricing is such that investors are attracted and HOA does allow investors, they can potentially change the rules. I have a property in an HOA that did exactly that. Limit on rentals and we are above that limit today, so no new buyers at this time can buy to rent. I've seen at least two other big HOAs vote on this idea this year as well. I don't think it passed in either neighborhood, but lets you know where the sentiment is.

There is no specific tax offset for new construction that I've ever heard of. Any deductions should be the same for existing resales vs new construction. Deprecation is also the same based on value. The warranty people talk about really isn't of value in most cases. What they warrant probably won't break like electrical or plumbing. It shouldn't. Also that is a rare repair even in older homes. Most homes probably don't have a lot of common maintenance. Some people have this dream that new homes are maintenance free, but in reality it's not much different than an existing home. Also due to price increases you can probably cut a better deal on an existing home and probably get better quality too.

Normally you'll probably need a couple of years of income to get a loan. We maybe be able to get you an owner occupied loan faster than that. I have many international customers and know lenders that understand this. Too many will tell you they can do it, but end the end can't so be careful there. Cash is always an option if you can do that. DSCR is for investment loans only, no owner occupied homes. Hard money is short term and expensive. Typically for flips only. Probably around 14% interest for six months and you will need cash reserves which perhaps you have if you are thinking about buying with cash.

Are you going to buy a home to live in or only to rent out? If you buy to rent, you can probably do this within six months if you have work lined up and getting pay checks.

Thanks @Bruce Lynn for your great response! I wouldn’t buy a house to live in right away, as I need to spend the first 12 months studying the area. Instead, I plan to rent during that period. However, I’m trying to educate myself now before moving there so I can make a well-informed investment.

Based on my spreadsheet, most properties in the $300K–$350K range with an estimated rental income of ~$2,500 per month show a negative cash flow. I’m wondering if I’m being too conservative with my numbers. I’ve attached a copy of my analysis—could you please take a look and let me know if there are any issues or if my approach seems solid? Otherwise I have to target houses with price range of max 300k and 1% rental income per month at least.

0 Votes

Dallas, Texas

Thank you @Kasi V., for the excellent point. I've also developed a spreadsheet for a TRUE rental income calculator—which goes beyond just calculating net income—by incorporating many of the parameters you mentioned.

Do you think it’s a good idea to buy a new construction house from builders for the first deal, especially considering aspects like tax offsets and depreciation? Once I’ve gained more experience in the area, should I then look into mid-aged properties, and eventually older or flippable properties?

I have one more key question: Since I'll be starting my first-year job upon arrival, banks might be hesitant to lend to me initially. In that case, would you recommend going for a cash purchase, using a hard lender, or considering DSCR loans?
Essentially, is it advisable to acquire my first investment property within the first six months of arriving?

Cheers!

0 Votes

Dallas, Texas

G'dy all

I'm moving to Dallas, Texas from Australia, where I've gained extensive experience in real estate. While I'm well-versed in the Australian market, the U.S. market is completely new to me. I've read numerous guides and watched many YouTube videos, so I have a good theoretical understanding, but I'm still unsure about the best way to start investing in U.S. real estate.

My plan is to begin with long-term rental properties and then eventually move into flipping and the BRRR (Buy, Rehab, Rent, Refinance, Repeat) strategy. I'm also interested in wholesaling, though I'm not sure how to get started in that area.

I would greatly appreciate any tips or advice you might have on navigating the U.S. real estate market. I'm already familiar with platforms like PropWire, Redfin, and Zillow, which is helpful.

Thank you for your assistance.

Cheers,
M

5 Votes

Dallas, Texas

All Forum Posts by: Mehdi Mir

Mehdi Mir has started 1 posts and replied 3 times.

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Post: Newbie in Texas Dallas

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