All Forum Posts by: Michael Ndjondo makadi

@Dan H. and @Henri Meli, thanks for your perspectives. I have never looked at it from this angle. A couple of questions that still bother me though: isn't the mortgage monthly payment gonna eat all income here in SD considering putting down only 5 - 10 % down? Isn't too risky to rely so much on appreciation? What if the market goes downhill while you still holding the property? Also I am not quite familiar with this 2 out 5 year living and selling strategy, does one have to sell within the 5 years to not pay taxes on gain? How will the commission and all expenses related to the selling affect the gain?

Thanks for your replies and advices.  @Henri Meli, my goal is long term and I want to build a stream of passive income. The only reason I'm looking for flipping at the moment is that it would add more to my fund that I can use to scale on my rentals faster.  @Dan H., That's a very good point, because every time, I'm ready to pull the trigger on that house, I think about having to share it with strangers. If I can't find better alternatives I can always swallow my concerns and live with it at least for the first 3-5 years. The reason I cannot start investing here is the cost and poor ROI on rentals. @Thomas S. I think about this option, but the only reason about us wanting to buy a house is to rent some BD, hence to reduce our mortgage expenses to rent levels. That way, we are building equity while benefiting from tax reliefs from renting. I can always leverage that equity for future investments.

Good afternoon to all investors on here. I need a good advice on my first deals in REI. I live in San Diego, a very expensive market and I am just about to get started to invest in RE. The decision that I made is to invest in Wichita, KS since I know the city and I already have an agent and a friend contractor for possible renovation. I need to decide how to start off. By the end of his year, my wife and I want to buy a house here in SD and will have 120k saved for that by December. I also have some other money that I put aside for REI but it's only around 40K at this moment. we have bee looking on new constructions in Chula Vista and one in particular that has 5-7 BD from which 3 of them are on the third floor. But it has this Melo Roos tax of 1%. I have been wondering what will be the better approach between: 1. Put 20% down on our house here, rent out 3 BD on the third floor and start investing only with 40k in Wichita, KS. 2. Put 10% down, still rent out the third floor and add the remaining in the investiment money. 3. Keep renting and paying 1600$ a month and use the entire dowpayement toward the investement. FYI the rent for the three BD will be arounf 2400$ minimum.

Also I was wondering between flipping and just buying and holding in Wichita, KS. From I have seen so far ROI on rentals in Wichita, KS have been not so great unless you uncover a really great deal. Thus my consideration for flipping. But then again we already pay way too much tax and flipping would only make it worse. As for the flipping, my friend contractor is the one who'll be handling the work. We have been dsicussing the possiblity to form a partnership in which I will bring the $$ and he will provide his time and work on reonvations. That discussion is still open as I am stil not sure how to structure the partenership so I benefit from teh tax perspective.

Your advices will be much appreciated.

Good afternoon/morning to you all BP members!

I am a newbie and after long period of learning and analyzing, I am finally ready to get my first rental property.

I have chosen Wichita, KS for reasons that I have listed in my previous postings. So my question here is to know from RE investors in the Wichita, KS area what realistic ROI I can expect to get currently in that market?

I have been working with a realtor and he's been really helpful, however from listings I have seen so far either from him or my own researches, it seems like to get even 8% CoC ROI after all expenses is quite a task. So I was wondering maybe it is just the current market and I should be patient with it. My initial goal was to shoot for 15% ROI at least, however I have started lowering my expectations.

I wanted to hear from investors in that market, is it realistic to get such ROI in Wichita, KS currently. We have been looking for almost turn-key properties with little repair required since I live out of state and I wanted to stay way from big projects for my first property. I'm visiting Wichita in 2 weeks for a week and I'll spend time trying to visit some properties and get a sense of the market myself.

@Aaron K., @Taylor Hazard, @Debra Grumbach, @Dylan Vargas, @Joel Owens, @Amanda Fallon, @Kirky Galt and @Tim Hadley, @Account Closed, thanks you all for your contributions as they really opened my eyes and made me think even more. My next step is to set up a meeting with that agent and go over my concerns and questions in details. I will also discuss with my acquaintance who referred that agent to me and find out what kind of agreement they do have. Next, I will try to find how much commission a buyer agent usually gets in Wichita, KS so I know and be aware of.

Last, I will try to contact a couple more agents and have discussions with them. I think I'll try to work with only one agent but I will definitely ask for a short term agreement if I am required to sign one.

I am super excited to finally get started with my RE investment journey and cannot stop thanking you all for making it easier for me.

Thanks to everyone who has contributed to this conversation. I have really appreciated every single  advice and  I have also learned quite a bit.

Thanks you all for your contributions. What I really got from this is that as I knew, the tax code is really complex and I should definitely have a qualified CPA in my team and work out tax strategies beforehand. The one question would be should I look for a CPA in my market area (Wichita) or locally here in San Diego? Also it might sound dumb, but what's the difference between depreciation and capitalization? I mean I know  a RE purchasing price can be depreciated over a period of time as tax deduction. @Christopher Smith, can the acquisition fees (trip to buy properties, closing cost, etc..) be included into the depreciation tax deduction?

FYI, I just found a work related conference in Wichita next month for five days and I'm trying to get an approval from my manager to fly down there as a participant. I'll be then using my spare time there to work on my RE investment. That way, the company would cover that trip and I get to deal with my first RE purchase.

Good question @Nicole Bernshaw.

Tim Hadley thanks for your reply. I do understand your points. My question so let's assume a buyer does sign a contract to work with you, is it standard to have the buyer pay his agent the remaining fees in case the seller's agent get their share as well?

@Joel Owens, what do you mean by buyer doing dirty dealings? would you for example be able to work with an investor who has a couple other realtors at the same time? Are there any specific rules that would need to crafted into the contract to avoid potential conflicts?