All Forum Posts by: Michael Paling

Hey anna, If you haven't been checking the rental prices around your local rental market each day (or at least each week), I'd highly suggest doing that. I have been collecting data in an excel spreadsheet on my local market for about a year, so I can pull that file up to give me a great idea when I need input on estimating rents on a deal. 

Make sure you're still accounting for all CapEx, maintenance, and vacancies in your numbers too, even if the property is in great condition.
 

That's where this website comes in handy. I've had several OOS investors each out to me with questions on my local market. Try searching on BP for investors local to the area you're looking at, find one that's fairly active on the website, and then send them a message. If they don't respond, oh well. If they do, then great!  

I'd suggest finding a local investor to sit down with and chat about this. Show them exactly how you're running numbers and they'll tell you if you're missing anything. I had the exact same thoughts before buying my first deal, but after analyzing a bunch, I've come to realize that my numbers aren't wrong and most properties in my area just won't work out for me. 

Hey Corey, I don't deal with short term rentals, so I don't know if I'll be much help, but I went to Michigan Tech for college and now live in Marquette. I'm happy to chat if there's any way I could help. 

For me, not knowing if my W2 job was stable enough to keep my in one area (grant funded) and not having the confidence in myself. I also didn't realize OOS investing was a thing before. 

Now I've got my first deal and the next deal is just issues with high prices and high interest rates. 

Have you tried searching for distressed properties or other signs of motivated sellers? Maybe there's potential for Subject To, lease options, or seller financing with little to nothing down. Definitely go find a local real estate group to start hanging around with. If you're located in Portland, I'm sure you could probably just post something saying, "hey BP, I live in the Portland area and I'm looking for a local group to meet with." That's what I did and the population of my local area is the size of peanuts compared to your area. 

whether the numbers work or not is going to be completely market driven. In my market, it's getting difficult for me to get the cash flow I'm looking for in the largest city around, but the surrounding towns aren't too hard. Rents have not kept pace with housing prices in some places.

How good of a deal you're willing to accept is completely up to you. Make sure that you're running any numbers as if it wasn't a house hack and just a typical buy-and-hold rental. Personally, my first house hack duplex I bought last June has been great. 100% of PITI is covered by the other unit and my W2 covers all the needed repair costs, which have totaled about $500/month out of pocket so far to fix up my side (plenty of delayed maintenance). My next house hack that I'm looking at will probably only have the rents covering about 66% of PITI because it's a lot more expensive market. If you're able to find a junk property and fix it up while you're there, you'll find a much better deal and learn a lot too.

Hey Tyler, 

I'm a rookie investor based in the UP of Michigan and I'd be interested in joining something like this if you're putting it together. I just started investing last summer and only have 1 property, but I'm looking around for my second buy and hold. 

If you haven't read Brandon Turner's book on managing rental properties, I would highly suggest it. It'll help answer a lot of things going forward. As for how to communicate things with the tenants, I would probably sit down with them in person. That way questions (both yours and theirs) can be asked and answered on the spot. But also provide something in writing, because tenants will forget things. 

For the lease, you have to follow the existing lease. So, you're stuck with everything as is in the lease until October 31, 2023. If they stick around and sign a new lease, I'd suggest doing a 6-month lease so that you don't have a lease ending in October every year. That's the beginning of the season that's typically a lot harder to fill vacancies quickly. Leases ending in spring and summer are better. 

As for the security deposit... I find that interesting that the seller didn't give it directly to you (though the title company). I'm still a rookie, so I'll leave that for others to help with. I was given a check for the security and pet deposits at closing. 

This does not look like a good deal. You don't have anything allocated for vacancies, maintenance and repairs or CapEx and you're only in the green by $226. Once you factor in all those you're easily going to be cashflow negative. Are there ways that you could increase the rent? or profit other ways than just rent? Could you offer less for purchase price? Play with the numbers some more but keep looking for other deals too.