All Forum Posts by: Michael Wentzel

Well done on the first purchase. A bunch of free education backed up by some action should lead to success. The rents to purchase price look pretty good, especially for a newer property. Since you've jumped into Fort Worth, I'd fly down for a visit to continue your education. If you put together a good team (realtor, property manager, etc) there, hopefully you could find similar deals and build a portfolio.

Mike

@Yesenia C. Like Diego said, you are probably looking at 20% to 25% down for conventional finances. If you and your husband have good jobs and receive W-2's, you should have a problem getting approved. If you're self-employed, it becomes a bit harder to qualify for these loans, but still possible.

I would try to meet with two or three lenders. My personal experience has been local/ regional banks are much better for investors than the big national banks. But meet one or two in each category and see what they can do for you. I have a great local lender here in Colorado if you'd like me to put you in touch with her.

Mike

@Christian Carson Great info on Cleveland. Way to state your case for the city you love. I was recently investigating a market and asked a property manager why I should invest in his city. He looked at me puzzled and said, "That's a good question." I didn't hire him. I'm currently busy building a buy-and-hold portfolio here in Colorado. But in a couple years I'll look for a couple other market and I'll keep Cleveland in mind. Thank you for sharing.

@Levi Pollard I'm not sure about the numbers in Canon City, but if they are close to what I've found in Pueblo, it should be encouraging. Apply the 2% rule (rent/ purchase price) and look at cap rates and roi. Smaller communities sometimes offer better numbers and less competition. So I think you can be successful in Canon City. Well done getting in the game early.

@Yesenia C. Welcome to the forums. We were overseas and started investing in rentals in Colorado Springs. We just came back this year and I have actually changed my focus to Pueblo. It is a community of over 100,000 known for its low-cost of living. The houses are priced low, even compared to other cities in Colorado. $100,000 or less for a multi-family. $50,000 or less for a single family. So we're under contract on our first multi-family down there. I'm not sure about Grand Junction, but both Colorado Springs and Pueblo have really low property taxes, which helps the numbers. The smaller communities also seem to offer less competition. I would lean on your families knowledge of the area, but hire a property manager so the properties aren't a pain to you or your family. I hope it goes well for you.

I'm just getting into buy-and-hold real estate. We own one property in Colorado Springs and are under contract on a second in Pueblo, CO. I have been looking at houses in Cleveland, OH. The prices are ridiculously cheap and the houses actually seems to be in decent shape and some are in decent neighborhoods. Should I steer clear of Cleveland because it will become the next Detroit?

Mike

@Ali Boone Great article. It is certainly a discussion that is worth having. We always hire a property manager, so that puts a buffer between us and the tenants. I think that is crucial in this niche. My limited budget for down payments also puts me in this niche. So I'll ride it for a while in youthful ignorance. Five years in $500-a-month rentals might convert me to your side. We'll see. Thank you for the input. It is good to have some people give constructive criticism.

@Marco Santarelli We're not managing our rentals. We were overseas the last seven years and had property managers. It is possible we would go back overseas the next couple years. So we turn them over to a property manager and factor that into all of our numbers. Thanks for the leads on Indianapolis and Kansas City. I'll look into them.

@Brandon Turner I've been been listening to the podcasts, so I assume you're the Brandon from the podcasts. Great to meet you, if only virtually. I've setup my keywords for Pueblo and Colorado Springs. Thanks. I look forward to taking part in the forums so I can keep learning and adding my two cents here and there.

@Marco Santarelli I still have plenty to learn. I've been listening to the Real Estate Guys podcast for about a year. Then a bit more research led me to Bigger Pockets and the Bigger Pockets podcast. I looked into Pueblo because I couldn't find what I was looking for in Colorado Springs. Pueblo is an interesting community with well over 100,000 people. It is known for low-cost of living and I think that will keep it growing slowly. There isn't much possibility of appreciation, but prices are stable and the numbers make sense. It is also just 40 minutes away from where I'm living in the Springs at the moment.

Here's what I'm looking for...markets with good cap rates (above 12%), good cash flow ($200 to $300 per unit), and great ROI (30%). Oh yeah, the purchase prices need to be low. Under $50,000 for a SFH and under $100,000 for a multi-family. Do any of the markets you're in hit these numbers?

Thank you all for you input. It it true that taxes are just a piece of the puzzle. But my guess is that many markets that have the best cap rates, cash flow and roi would be in areas with low taxes. So I need to go searching on the forums to find other markets with good cap rates (above 12%), good cash flow ($200 to $300 per unit), and great ROI (30%). Oh yeah, the purchase prices need to be low. Under $50,000 for a SFH and under $100,000 for a multi-family. Can anyone point me to this land of milk and honey?