All Forum Posts by: Mike Shahi

@Brandon C.J. Grimes just FYI- PG County also has a terrible school system- Keep that in mind when conducting your search

@Josh Longtin I just did mine online using INC file. $369.

New Carrollton and Brentwood are trash. Berwyn heights is next to Greenbelt. I grew up in Greenbelt. Great because Near metro and umd. Greenbelt and college park are prime for rentals because of the distance to dc and Baltimore- not to mention you have one of the best high schools in the country (Eleanor Roosevelt)

Hyastville and Riverdale are cool to. Close to dc. People who can’t afford to live in DC are buying homes right on the DC line in Hyattsville, mount rainier, Tacoma park and Riverdale. 

I meant 203k loan BTW- not streamline loan

@Josh Smith I bought my first home in 2011 using an FHA streamline loan. I bought a short sale home for $208,000 and borrowed around 15,000 to fix it up. I change the carpet, painted the house and remodeled all the bathrooms. Two years later I sold it for 295,000 and it sold in four days.

After that house I decided that I don’t want to put up with the headache of rehabbing again so I bought a home in DC in 2013 that was already remodeled. The seller flipped the house and walked away with $75,000 in his pocket. My parents were pissed off because they felt like I just made someone richer and that I could’ve done the same thing, which was true. But DC home prices were on the rise and my neighborhood was changing fast. My thinking was that he made his money now but I will make mine down the road. And I was right. My home price has doubled since 2013 and am sitting on 200,000+ in equity by not doing anything but just living here.

In 2019 I would use an FHA streamline to buy something and rehab it myself. Why? In Washington DC home prices have pretty much peaked. So buying a rehabbed home Wouldn't make sense because prices aren't going to go much higher. So I'd rather buy something low or at least try to in this hot dc market , Put in a little bit of work and know that I have a good chunk of equity after I'm done. The problem is finding that gem without having investors/developers snatch it from you.

The only headache I had from rehabbing were the damn contractors. Once the job started to come to an end they stopped showing up because they had started to pick up other work since mine was coming to an end. In the end I finally got it done and I got to say it was pretty fun. I got to pick and choose what I want in my “dream” home and remodeled it to my taste. It was a great learning experience and moving forward I know what not to do.

@Jacob Sampson I wish it was that easy in DC/MD. Landlord laws in DC favor the tenant. Same for MD. It's very hard to put people out. In DC I know you need a business license in order to rent your home or even a room in your home. It has to meet code and that itself is a process- if you don't get licensed and attempt to evict, not only will you get fined for not having a license but the judge will throw your case out. 

this was another reason I was thinking of taking the buy and flip road- the strict tenant laws here in MD/DC

for educational purposes- check it out

https://dc.curbed.com/2017/5/23/15681204/tenant-law-bill-of-rights

Awesome insight. Thanks to you both. I agree Jacob- money is a hassle. I was at the Apple store the other with people complaining left and right about issues they were having with their product. That's any business- you need to deal with headaches. 

Cassi is right to- no matter where I am and what I'm doing, I get income each month. Not only are my tenants paying my mortgage down but I have cash flow coming in. 

My other fear is non paying tenants, destruction of property etc...what happens when the place burns down because a tenant forgot to put her cigarette out? Or the roof blows off because of a storm? I need to look into insurance and landlord laws in DC/MD. 

Jacob is absolutely right- my property can appreciate and can be paid off by tenants. In 15 years, a paid off property and cash flow. Woohoo! 

I have a lot to think about. 

What made you want to purchase a multi-family and rent out the units than to buy, flip and move on to the next project? 

Each home I've purchased I always made sure the basement had a walk out so I can rent it out. With the exception of one tenant, I've been lucky enough to have tenants who paid on time and didn't complain much. The one that rents out my basement now is fantastic and pays rent way ahead of the due date. We've had our minor issues here and there (she saw a mouse, small things broke and needed repair etc) but it was nothing major and usually got resolved pretty quickly. I did have one nightmare tenant that constantly complained. She eventually left after 4 months (I do month by month leases) but I can only imagine the hell I would have got if she saw a mouse or came across any of the other issues my current tenant brought to my attention. 

This may be the last tenant I rent to- I frankly just don't want to deal with it anymore. She's also set the bar so high that honestly don't think I can find a replacement that will even come close. She's kept my basement very clean and again, has paid rent on time (sometimes weeks in advance)

With that said, I can't imagine handling 4 tenants at once. Each with a different personality and demands that will probably drive me up the wall. At this point, I just want to buy, fix, flip, close and move on to the next project. 

Tell me how you guys deal with the headache of tenants? Are there advantages to rent and hold than to buy and flip? Am I missing something here? 

Get in touch with wholesalers. You see those "I'll buy your house cash" signs posted on the poles at the traffic light? Call them, let them know you're an investor and network. 

Better yet- make a sign yourself and stick it on your car 

My friend flips in DC- doing very very well. Flipping his 4th million dollar home this year- all his deals were from wholesalers and word of mouth. 

He just finished one in the Trinidad neighborhood in DC- neighbor saw him renovating a home in the area and asked if he would be interested in her home. He bought it for 500k and flipped for $889k. While flipping that one- he was put on to another property in 16th street heights. 

You have to find these deals off market- once it hits MSL, forget about it

As Ray stated, be upfront. You should start getting in touch with a good agent who can guide/mentor you through your REI journey. Some agents are just trying to make the sale- many are patient and will tell you when a deal is worth it or not. When I was searching for my DC home years ago, I actually picked multiple agents to work with. You'll get a good feel of who knows what. I went with an agent who followed up every other day to see if I had questions about a particular house, area etc....he knew the areas well and was quick to follow up with calls and emails. When it came down to my decision, it was between 2 homes and he advised me to purchase the home I'm in now which ended up being an excellent decision. My house has appreciated faster than the the other house I would have chose- neighborhood changed quickly and is one of the hottest DC neighborhoods to live in. My equity has doubled since 2013. The other house- not so much

As far as tools- I personally came across 2 sites that offer something very similar to MLS and have other fantastic tools built in. Google Propelio and REIPro. They offer trial versions of their software and have been very helpful. Propelio also has an academy of free classes that you can take to further your real estate education. Of course there's going to be a monthly fee (about $100) a month to continue to use the software but it's good to get familiar now so when you're ready, you know what to shoot for. We can talk further at the MD meet up