All Forum Posts by: Mike Bean

@Michael Smith I'm open to having "strangers" live with me but I've hardly looked into any AirBnB strategies to know how I could make that work. Personally I'd rather have a rental agreement for a year so that I'm able to predict cash flow and to just have more ease of mind. I'm assuming your vacancy reserves would need to be a bit higher going that route? 

@Zeke Liston I've mostly been using Zillow to search for properties to get a feel for the market. In my area in MA, I had MLS listings sent to me by an agent and the properties on zillow would pop up maybe the day after I would get it from MLS. I'll definitely checkout Loopnet - I heard that is good for rental properties.

@Jimmy Lieu definitely open to chatting. I took a look at Ohio but I was more looking around Cleveland. I really am just looking to go somewhere cheaper than where I am now. People say you can make it work wherever you are, but an FHA offer is not valued nearly as much as investors that can put 25% down in cash. Almost anywhere I could buy in MA, seasoned Investors are flocking.

Thanks for the comments guys.

Hey BP! I'm looking to move to Houston next year to begin my investing. My original goal was to house hack a multi family property in my home state but I'm abandoning that idea to 1) go live somewhere that I've never lived before and 2) take advantage of no income tax, lower property prices, etc. 

I would like to stay at or under $300,000 for my property, and as far as multi's go in the Houston area, I'm not finding much. If I were to get a single family in Houston, what could I expect to take in per bedroom in rent if I were to house hack? I'm finding some nice SFH's about 30 mins out from the city center, which seem to be in great shape. I'd like to get an idea of whether I could make it work in a SFH with 4 or 5 bedrooms or if I should keep networking and looking for Multi's.

I'm always open to suggestions/ ideas and if you're from Houston, let's connect! The constants in my situation are that whichever route I take I'll be using an FHA loan and will be owner occupying.

@Tochi Ajiwe did you end up getting either of these properties? I'm looking to move to Houston next year for lower property prices. Is there a reason you're looking for SFH vs. Multi's?

@Andrew S. Hollihan I've also been considering investing in Houston. I only started looking at places on Zillow last week so I essentially have 0 knowledge on the market. I came up with a strategy last year and was planning to jump in this past spring/ summer but I got hit with a surprise from my parents - We're moving to Florida!

I'm also looking for turnkey options as I don't think I'd have much $ for repairs after a move that far and all the costs associated with the acquisition. My plan was to get a multifamily (3 or 4 units) and live in one unit using an FHA loan for financing. The reason I'm looking in Houston is because the company I currently work for has an office in Houston which i could possibly work out of.

I'm curious what you're describing to agents when they ask about your criteria? 

One thing I've heard from a CPA here in MA was to depreciate components while you are depreciating the house. Some things you can depreciate on a shorter timeline than 27.5 years. Examples are cabinets, counters, dishwasher, fridges, security systems, washer dryer. I'm not an expert but I did personal tax returns for some people with rentals. definitely keep track of all expenses over the year and make use of the accelerated depreciation. Check this link https://www.accountingtools.com/articles/depreciation-of-leasehold-improvements.html

Even though Worcester is an "hour drive" if you go at the same time the rest of MA commutes, you're looking at a 2+ hour drive easily (even on the pike). If you have any commitments in Boston that you will need to be back and forth to you will need to consider that, and your alternative would be a monthly commuter rail pass ($363) from Worcester to Boston. I think you'll be able to find a place that works for your needs but if you plan on house hacking you're in a good spot with $20k. I would get a conventional mortgage and put 5% down, You'll still have PMI as a monthly cost but when you reach 20% equity you can usually refi or appraise out of it (ask a loan officer). bottom line is at 22 years old you have the capital to live for free essentially and benefit from home ownership. you certainly have more buying power than $100-$200k as previously stated. $400,000 list price would be $20k down pmt and you could have your closing costs covered using seller concessions. Good luck.

@Ray Hebert Hi Ray, I work in Accounting and use spreadsheets on a daily basis. I think I could potentially help but I'm wondering what your specific needs are for your properties. I've put together spreadsheets that will keep track of rent collection and expenses. Soon I will be finishing them to provide digestible reports to see totals and places for improvement on investments. PM me if you have questions.

@Brian Crimmins thank you for your service. I’m sure you’re in a good position to buy something in that area that would work for you but honestly those prices are crazy! If you can do it go for it, but i’d Recommend looking outside of the city. I know from my commute to work that Framingham/ Natick are only a 35-40 minute train ride when taking the commuter rail. You could save a lot and still pull off your house hack. Ps Framingham recently became a city and there is a lot of development going on - may be a good time to get in! Best of Luck

@Sami Gren I think the point of @Steve Hall 's original question on why you're self managing multiple apartment buildings/ asking if you don't want to scale up was basically to say that there are higher dollar per hour activities you can be doing than dealing with property management. If you factored in the numbers for property management into every deal you go for (which you must not be because you're asking what the avg rate is) then you could simply manage a manager rather than manage an entire building and all that goes into it. Once you find a PM that fits the bill and does a good job, you can spend your wasted time finding more deals and scaling.

To get back to the point and come away from the pointless sarcastic banter, just assume 10% average for PM. If you're 50/50 partners and you're doing all the work, why would you split evenly. Hypothetically you put the same capital down on the property, but going forward you do everything and he/she just collects a paycheck? If you HIRED a PM, then sure, the 5%/5% split between partners would make sense but since YOU are paying the full 10% in the form of labor (executing the job duties of a PM), that should come out of their end.

I guess that last part is my personal opinion on what's fair but you may have a different view. Partners usually bring either the hustle or the capital. You're bringing both and barely benefitting from it. If you really want to help your friend you should show them your whole process, including the PM so that they can then go and perform on their own. How's that saying go again?... "Give a man a fish, he eats for a day. Teach a man to fish, he eats for a lifetime."

Whatever you decide, spell everything out in a partnership agreement and be ready for a bumpy road because friends or not, when money is involved things can get stressful. Good Luck.

@Caleb Heimsoth Thanks for the concern but you gotta start somewhere. Unless you're working in a commission based career you don't have much say in your salary. The whole reason of incurring the extra $300k in debt is to provide cash flow to supplement that $50k/yr. If you find good tenants and have systems in place to deal with turnover then the payments on the mortgage are not a huge concern considering your tenants pay it for you (also don't forget there is 3-6 months of mortgage payments sitting in an account).  Not sure how you thought that piece of advice would be helpful but if you have more advice with some substance that would be greatly appreciated.