All Forum Posts by: Michael Dumler

@Bruce Yi, depending on your state's laws, request a higher security deposit to reduce/offset the risk.

@Jenna Chen, keep in mind that there are other strategies and avenues to explore regarding house hack deals in metro ATL besides the classic duplex example. For instance, properties with an accessory dwelling unit (ADU) on the lot that can be implemented as a long-term or short-term rental can perform exceptionally well. Likewise, the same can be said for properties with in-law suites or finished basements.

Have you considered or explored any particular ATL markets? FYI, a 203k FHA loan is not a DIY-friendly option. One requirement for this loan product is that the rehab must be completed by a licensed and insured contractor approved by the lender. To be blunt, this loan product can be very time-consuming and nuanced. Since this would be your first deal, I would advise targeting properties that only need a light cosmetic rehab.

@Grant Kaus, @Harrison Sharp is your guy. (I'm unsure why BP isn't allowing me to tag him.) Send me a message, and I'll connect you two.

@Kedric Naylor, you're at the court's mercy. Yes, this is very common in probate deals. We can't advise you to walk away or negotiate concessions without knowing any other information about the deal.

@Ivan Castanon, if you're open to new investment strategies, research and explore co-living rentals since Tampa and Orlando are part of your target markets. I'm specifically referring to PadSplit, a rent-by-the-room company/platform that operates in those respective areas.

@Eddy Rios, while I've only been in the real estate sales industry for six years, I think I have enough experience and understanding to say that finding a single individual to show you the ropes and mentor you throughout the entire process will be challenging. Food for thought: obtain your real estate license and join a team instead. 

@David Milanese, oh, man. Do not spend any more money on wholesale courses. Everything you need to learn/know is available online for free. Consult with an attorney to provide a purchase and sale agreement in your respective state with an assignment exhibit included. And yes, you are still responsible for wiring earnest money to the closing attorney/title company when you put the property under contract. The amount depends on negotiations between you and the property owner. 

Steps: you go under contact with the owner of the property, you assign the purchase and sale agreement to the end buyer, the end buyer closes, and you get paid the difference between the agreed-upon price between you and the owner and the intended purchase price of the end buyer. 

As a side note, and maybe others will recommend this as well, obtain your real estate license instead if you are interested in pursuing sales full-time.

@Cosmo DePinto, I can provide further insight on behalf of my market. Metro Atlanta, generally speaking, respective markets 30 to 45 minutes from the City, will be tight on cash flow unless you implement a creative investment strategy, such as short-term rentals, medium-term rentals, or rent-by-the-room properties, or allocate at least 30% to 35% towards your downpayment if you intend to hold the property as a long-term rental. 

I think it is fair to say that there is somewhat of a tradeoff between markets that provide positive cash flow on day one and relatively high appreciation-based markets. For instance, sourcing cash flow deals is essentially nonexistent in affluent metro ATL markets with high employment, exceptional school systems, and attractive nearby amenities. However, it's a safe bet that these respective areas will continue to appreciate steadily for the reasons noted. For markets that are "cheap" and provide cash flow on day one, there is a reason for this. The price-to-rent ratio makes sense from an investment standpoint, but further research is needed to identify whether those respective areas will prosper. Warner Robbins, GA, is a good example of this. Cash flow deals can be discovered there. However, the entire market depends on Robins Air Force Base, with not much else moving the needle. Hypothetically, if the base were to relocate or dissolve, that area would get crushed. Hence, to reiterate the reason for adequate research before purchasing a property. 

To reevaluate, my team and I can provide further insights and resources if you're interested in implementing a creative investment strategy. For reference, we're heavily involved in the co-living space, which is an unorthodox strategy but can perform exceptionally well with the right property and systems in place. If not for you and you prefer the traditional route, I would explore potential "up and coming" markets such as Acworth, Cartersville, and Douglasville, where the price-to-rent ratio is a little more favorable, and growth is apparent.

@David Young, I concur with Travis. I wouldn't advise pulling a HELOC unless your numbers are dialed in and you are willing to take that risk. Moreover, as others have noted, explore investment opportunities in your market before considering purchasing out of state. Is acquiring a new primary residence and renting your current home feasible? Or, as Travis mentioned, sell your primary residence and explore house hacking opportunities, which will allow you to snowball income savings to deploy into the next deal. Unfortunately, while there are other methods to acquire investment properties, the reality is you need cash and reserves to plan and set up your investment portfolio accordingly.

@Ella Marie, I can't speak on behalf of your market, but in my respective market, competition is tough, and the successful fix-and-flip vendors are often full-time operating businesses. This isn't to say you can't flip properties part-time, but it will come with challenges. If you haven't already, read "The Book on Estimating Rehab Costs" by J. Scott as a starting reference. Moreover, for someone in your position just starting, it's best advised to partner with an experienced individual to mitigate risk and adequately learn the process. With this in mind, if you intend to leverage short-term debt (hard money), it's even more vital that your underwriting is thorough and that you have the correct systems in place to tackle potential issues. I've seen many investors get burned because they failed to understand their hard money loan terms/rates, even if they did acquire what should have been a home run deal. 

Operating an Airbnb business requires being up to date on current local ordinances and restrictions. The last thing you want is to acquire an STR deal that looks great on paper only to find out that the neighborhood you bought in does not allow Airbnb.

Overall, your next actional step should be attending local REI meet-ups. Connect with professionals who know what they are doing so you can receive proper guidance.