All Forum Posts by: Michinori Kaneko

you can research some basic data about the city here.

@Hashim Jakvani

are you looking to invest locally or open to investing in other states too? Looks like the later since you've mentioned Las Vegas.  Here is a link that might help you get started by narrowing down areas you want to focus on

Price to Rent Ratio by City

You can also find more details about the city that are you looking at:

City data.com

In terms of timing, no one knows.  you can only play a guessing game, although I think most people are thinking that we are coming to end of cycle (but that doesn't mean you cant find a good property, just means its harder).  Hope that helps!

@Colin Courtney a relevant post for you.

Hi, i would definitely include any cashflow in your analysis. at the end of the day you want to estimate how much money will you have in your pocket, and if after including everything, your return is like 5% a year, then its not a great opportunity and you'd rather invest in the stock market, right?

Here are things I also consider in my model (but I'm also an excel guru and work in investment management firm so i'm good with number crunching):

estimated annual appreciation of (but you can bypass this if you assume that increase in your rent offsets all the expense increases):

1. assets

2. rents

3. Insurance

4. HOA fee (if applicable)

5. Tax

One time costs:

closing fees/rehab fees

Other fees:

Tenant placement fee (by your PM, assuming annual replacement of tenants).

I would not include utility fees and stuff that tenants are responsible for. But if you want to be REALLY conservative,  you can build in Utility and maintenance expense while the property is vacant.

Hope that helps!

thank you!

Thanks everyone this was very helpful! 

Hi,

I'm just getting started in real estate investing, but I have a question. I have a very good credit score (was 800+ when I checked last time). I'm thinking about doing BRRRR strategy. However, with this strategy, you require your credit to be pulled multiple times to refinance the loan (and for me, I finance my first purchase as well). Wouldn't your credit score deteriorate a lot from getting lots of hard inquiries on your credit, which then will increase your interest rates? How does everyone deal with this situation? Thank you for your help!

Hi!

i'm new to rental investing too, but here is what i did.  First, come up with game plan.

1. Do you want to invest locally or out of state.  I think Knoxville is hot market now so maybe good to invest locally. I invest in Indiana.

2. Decide what route you want to take (e.g. flip vs rental). i think rentals are easier to grasp at first. SFH or MFH or something else?

3. speak to multiple real estate broker and property managers (if you are intending to use them).  Find the ones that are hard working and you would like to continue working with. 

4. based on your strategy, learn about what you need to look out for when you look for properties.  For instance, for rental, you want to look for ones that don't have lots of yard, because when its vacant you would have to pay a lot for mowing.  you don't want builtin pools for the same reason.  Multiple garage is a plus, etc.

5. based on what you find out from no4, find properties that fit the criteria. Run them through your PM/RE Broker.  see what they think (how much can it rent for, does it require significant amount of work, is the area a good growing area, etc.)

6. Crunch numbers, if it makes sense make an offer!

Hope that helps!

Hi, 

when i started looking for investment properties, i started looking at Austin as well. I had friends near by, and i knew the market was hot. I quickly realized that you can't have positive cashflow in the area.  I live in NY, and the reason I was looking at other state was because of the same reason.  I settled for investing in Indiana.  Of course, appreciation is probably likely in Austin, but you are also paying every month to cover for shortage of the cashflow. If you want to play the appreciation game, NYC is better bet than Austin.  I would rather have positive cashflow though (that's a visible gain as opposed to betting on probably, but not 100% return on appreciation).   

Just my 2 cents. Hope that was helpful.

Hi Rob,

I live in NY currently, but I used to live in NJ before and worked at NY.  I'm pretty certain that NY taxes any income that originates in NY only (and NJ taxes you for all income if you live there, thus most people living in NJ and work in NY pays taxes to both states).  I'm obviously talking about income taxes here, but I wouldn't imagine there is a specific different tax code for rental income. 

If you really want to be sure, you can try punching in some hypothetical numbers in turbo tax and see if it generates tax on more than just your rental income.  turbo tax should be free until you actually submit the taxes so you should be able to see the taxes you would owe on your hypothetical numbers without actually submitting/paying.