All Forum Posts by: Michael Castro

Join a team or find a mentor. Network with investors, find deals that will casfhlow, double check that they actually will, and just text them out along with your solid reasons as you find them.

Find a deal that would work for you friends and text it to them. Paint the vision of what it would cost them to get into a home like this. Educate yourself on any assistance offered or any first time buyer tax credits in your area. Show them how easy and affordable it is.

I have had several friends buy this way.

As it's been said, I agree house hacking is a great first step. Keep it simple, rates are very high, and locations that cashflow may not be areas you'd be comfortable living in. Don't try to hit a home run on the first try, it'll likely keep you sidelined. A lot of my clients here in Dallas are having success just renting by the room.

Great insight Eric! Completely agree- I would also like to add this list of safest cities in America. I'm biased, but 3 of the top 5 are all suburbs of Dallas. https://smartasset.com/data-st...

Also my 2 cents, I have always invested within 30 minutes of my home. Just personal preference, you pay a premium to be in and around Dallas but there is constant demand here. I don't generally recommend buying for appreciation since it's the one thing you can't control, but at this point with these rates I'm happy with break even rentals because I'm confident that if any appreciation is happening anywhere, it'll be here in Dallas.

As I said there is a premium, so most of what my clients are buying here is for house hacking or rent by the room.

Rates are the bigger issue and you're going to run into that everyhwere. Not sure where you're looking out of state, but I've only ever bought in and around Dallas because it has consistent demand. You can buy in the middle of nowhere and cashflow $500/mo and never see any appreciation, or you can buy something to break even in Dallas and see 20% appreciation over the same time span.

Have you explored an ARM or interest only loan?

Understood thank you for clarifying- you literally meant your second home purchase as opposed to the technical term of "second home".

As I've seen it mentioned, renting by the room is where my clients are seeing the most success right now. It would also allow you to get into much nicer neighborhoods vs having to buy somewhere like Oak Cliff/ Cockrell Hill. Also an area like Oak cliff with an ADU often won't qualify for FHA unfortunately, but you could always do conventional 5% not a huge difference. One common reason is a lot of those lower priced homes and duplexes have window units instead of central AC.

 Yes sir, we purchased the next home end of 2022, fully renovated and are moved in. Purchased for $536k, $150k in updates, could sell today for for about $90k profit but we're in our dream neighborhood so we may be here a while! Plus we've got a tiki bar and a courtyard pool lol. We love that the pool area can be seen from anywhere in the home vs a backyard. It's possible we just add a second story when we need one.

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $180,000
Cash invested: $310,000
Sale price: $450,000

My wife and I purchased this home and renovated as our primary residence. Enjoyed it for 2 years and sold for a $140k tax free profit.

What made you interested in investing in this type of deal?

Tax free profit, and getting to update the home to our taste.

How did you finance this deal?

Cash and then 5% down conventional once renovation completed.

How did you add value to the deal?

Renovated the entire home.

What was the outcome?

$140k tax free profit.

Lessons learned? Challenges?

Because we renovated as a primary, we had little regard for the budget. Our primary concern was to make something we could enjoy, profit was secondary to our enjoyment. This has been the same every time we've renovated since.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I am the agent.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $175,500
Cash invested: $13,500
Sale price: $242,500

Purchased as primary residence, used as an Airbnb, held for only 2.5 years cash flowing ~$600/mo net, sold for $67k appreciation and ~$18k net income.

From $13,500 (including furniture) to $85,000 in 2.5 yrs. ~530% ROI.

What made you interested in investing in this type of deal?

Low money down, no work needed.

How did you find this deal and how did you negotiate it?

On mls, was multiple offers and I offered well above list. Didn't matter because cashflow still worked.

How did you finance this deal?

Conventional

How did you add value to the deal?

Just furnished and switched out light fixtures.

What was the outcome?

From $13,500 (including furniture) to $85,000 in 2.5 yrs. ~530% ROI.

Lessons learned? Challenges?

Dallas Airbnb taxes kept increasing, and this particular market was very saturated, had to keep prices low and focus on keeping 98% occupancy rate. Low price point meant having bad tenants at times.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I am the agent.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $183,000
Cash invested: $9,150

Purchased this home off market by a motivated seller moving out of state who had just completely renovated it. Current assessed value by county is $335k. Over $45k net cashflow so far + $152k appreciation to date. From ~ $13,500 (including furniture) to $197k so far.
1360% ROI so far.

What made you interested in investing in this type of deal?

Very little cash invested, fully updated home including all systems.

How did you finance this deal?

Conventional 5% down

How did you add value to the deal?

Just furnishing.

What was the outcome?

From ~ $13,500 (including furniture) to $197k so far. 1360% ROI so far.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I am the agent.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $155,000
Cash invested: $7,750
Sale price: $290,000

Purchased as a primary, operated as an airbnb cashflowing over $1k/mo net profit for 5 years, sold for an additional $135k from appreciation. Pretty much all furniture and appliances were from fb marketplace.

What made you interested in investing in this type of deal?

Very little cash needed, cashflow from day 1.

How did you finance this deal?

Conventional

How did you add value to the deal?

Just by furnishing, no work was needed.

What was the outcome?

Net profit (excluding tax of sale) of ~$195k in 5 years, on a ~$12k investment (including furnishing)

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I am the agent.