All Forum Posts by: Michael Hastings

Hi @Trey R.,

I think many people have been in your position, and don't pull the trigger on deal for many reasons.  I have listened to several BP webinars, and it is one of the things that Brandon talks about a lot.

I looked at the calculator print out that you provided, and these numbers look acceptable.  BUT, you mention two things that make me want to hear more about the property:

1.  It has been on the market for 220+ days.  Your language seems to indicate that it was purchased for 17K by the current owner and then they fixed it up.  Were they planning on flipping it?  If the flip failed, why?  Is there a tenant in it now?  If so, what are they doing to the place (the pretty new flip may not look like that anymore, and may need more on the fix than you budgeted).

2.  You state that the area would be a "C" rating.  Is the rent you are projecting a good comp for a "C" rated area in your city?  

Further, I would ask you if the vacancy rate you entered in the calculator be can supported by facts for the area?  I used to own property in a "C" area in Oakland California, and the vacancy rates for the area was high due to a variety of factors, and the tenants turned over a lot.  Some of this can be accounted for by better tenant screening, etc., but there must be some challenges with maintaining tenants that have to be considered.

Also, I would ask the listing agent for more info as to why the delay in selling this property and then ask myself if I am in a position to fix that problem.  If so, seek a discount on the property from the list price, and make a plan to address any concerns.

Good luck with your RE endeavors!

Hi @Dylan Beckwith,

Welcome to the forums, and congrats to you for asking such thoughtful questions at such a young age. I have been where you are at now, and can tell you I had a lot of same enthusiasm about real estate investing in the 90's that you have now. I did buy my first SFH at the age of 25 and had two multi-unit rental properties about a year later. Then, my agent talked me into buying a fixer upper, and it was the worst financial decision of my young life. It actually froze me as the financial and personal toll was a shock, and I stopped investing in RE at the time, as I lost a lot of money and burned my reserve. Thus, I began to just put my money in a 401k.

There was no BP to go to for assistance, and what I learned about being a landlord up to that point had nothing to do with dealing with contractors, city codes, burglars, yard maintenance on a vacant property, dealing with neighbors during a flip, unexpected problems with the property that you do not budget for, etc.

I tell my cautionary tale not to prohibit your RE goals, which I believe you will reach.  But only to support some of the advise in this thread to start with a few properties which may not need much if any maintenance to wet your beak, that do not require that you bring a set of skills that you may not yet have.

There are so many people here who have been in the same shoes you are in and had a lot of success, listen to them on the podcast and read their blog post, I think you will be satisfied.  

Good luck with your endeavors!

@Tyron White,

Hello, I think you are getting a lot of good information here from @Ben Wilkins.  I will add to this for you as well.  I started taking @Brandon Turner's 90 day challenge to analyze a deal a day and I am literally 5 days into it, since the webinar that I heard where the challenge was made.  I will tell you what I did, as a newbie:

1.  Made a decision about what deals I wanted to analyze.  @Bob Okenwa mentioned this earlier, and you have to decide if you are analyzing property for a flip, buy-and-hold, wholesale, etc. I am interested in buy-and-hold opportunities, which follow the BRRRR strategy, that are SFH's in a specific city (zip code).

2.  I then went to the Investor Marketplace here in BP, and searched for deals in the city (zip code) that I was interested in.  It did not matter if the deal offered was a year old, as I am not doing these analysis to make an offer, but to instead get use to plugging the numbers in.

3.  After selecting a deal, I then went into the "Tools" on this site and opened the "Rental Property Calculator".  (Without a PRO membership, you can analyze 5 deals with the calculator for free).

4.  Start plugging the numbers in.  For those parts of the analysis where the expense was not given, I used Google to find the source locations of the necessary info (for example, if you need to find out what the "water & sewer" charges would be for a location, find out what water company services the address, get their phone number and call for historic totals.  Same works for all utilities.  Need tax info?  Find the county website where the property is located, get the parcel number and find out the taxes paid over the last few years - this is available for almost all large metropolis areas).

(I have recreated a mock up of the rental property calculator in Excel, so that I can learn how the numbers work together)

5.  I suggest not glossing over the numbers and try to apply all of the numbers as accurately as possible.

6.  Be conservative on the numbers and make sure you plan for the "unexpected".

I can tell you that in just going through a few of these, I have learned a lot.  It takes a bit longer when applying all of the numbers as accurately as possible, but this is the same thing that I will apply when I work up to the first investment property.  I was told many years ago that there is ALWAYS another deal in Real Estate.  Make sure the numbers work for your financial situation, time available to spend on the investment and risk tolerance.

Good luck, know you are in the right place to get a lot of info on how to do this correctly.

Hi @Cris Mullen,

I am in the same boat as you, and have been researching markets away from my home base for investments, as I live in Denver and the market here is priced high, and it is not easy as logging onto the MLS to spot potential deals for long term investing (there are deals here, but there is a lot of due diligence needed and contacts to find them).

I think that investing at a distance is fine, and there are many people on BP who do just that.  I have been spending a lot of time analyzing the areas I am interested in, speaking with local agents, investors, lenders and community leaders to become acquainted with the city.  I relied on Google Searches to find these people, you can do the same.  This will help you learn more.

Also, search for people on BP by location, and just send a PM to select people.  I don't think anyone would be unwilling to help, unless they are busy out buying real estate!

Good luck!

Hi @Justin German,

I think you should contact James Carlson.  He seems to be very knowledgable about AirBnB.  You can find him here on BP, if you search for his name.  

He has networking events as well, you can find one here:

https://www.biggerpockets.com/forums/521/topics/46...

Local to you.

I researched AirBnB rentals as well and have been blown away with the possibilities.  James should be able to answer your questions pretty quickly.  He is also a realtor.

Hi @Greg Swartzell,

Welcome to BP.  I have reviewed your post, and would agree, "house hacking" surely has some benefits, too mention to mention here, thus it is a sound strategy to start your investing path.

Just to clarify, you mention buying a duplex in Lawrenceville (which makes sense), but then you indicate that you will be refinancing your home to pull equity and obtain the down payment for the duplex.  So I would ask, what is the plan for the house?  Are you hoping to keep your home, rent it and buy a duplex in which you can live in to start the "house hacking"? Also, you plan to maybe live in the duplex for a year or so.  Then what?

This scenario is certainly possible, as there are hundred of stories on BP with people who have been successful with just this strategy.  I just think that if you provide additional information on the whole plan you have, you will get better, more useful responses to your questions.

Good luck!

Hi @Trina Walker,

I share your story, as I am also "50'ish" and I am getting into RE investing to supplement my retirement income, and to ensure that I have a more than sufficient padding, which will allow for travel, and the ability to build a financial legacy for my family as well.  I have been studying on BP for the past few months and have taken in so much, I think my head may explode!

I had studied with one of the RE "gurus" in the past, and I can unconditionally state that there is more information, education and community involvement here on BP than any I have seem previously.

Good luck with your RE investing!

Hi Davyona. welcome to BP, good luck with your investing!

@Harrison Hopkins Welcome to BP.  Note that you will need a heck of a lot more than the Carlton Sheets "no money down" system to see success, but at least you are taking the first step to seek assistance and ask questions.  As was mentioned by @Adam Sanders, there are a lot of resources available on BP that will send you on the right path.  Books, forum postings, blogs, webinars, you name it.  I would suggest spending time here, on this site, soaking up as much game as you can.

I am old enough to have been through two recessions and deflation of real estate as an adult (early 90's and 2007-2008) and in both of them, nothing came out of the other side but opportunity for those who were prepared to weather the storm, kept their credit good and did not "feast" on all the free loan money available.  I literally lost my shirt in the early 90's, in which the RE bubble popped in response to the S&L crisis, and the Resolution Trust took back all of the property, as I was hungry, not seasoned as an investor so I over leveraged and only invested for equity gains, not cash flow.  Also, I was young and inexperienced.  There was no "Bigger Pockets" to turn to for assistance, only Carlton Sheets on late at night guaranteeing you riches in real estate!

In 2007 and 2008, I was better prepared as I saw it coming and held a few buy and hold opportunities in which I did lose equity (which was over inflated anyway) but not cash flow.  

I say it is time to diversity your RE investments and watch over leveraging yourself, as history tells us that a correction is inevitable.