All Forum Posts by: Nathan A.

That's just a way of saying that if you are using that kind of financing, you have no down payment. And therefore you acquire all the upside return of the property for nothing out of pocket. Mathematically, that's the highest return possible because what could be a higher return than something for nothing?

Individual real estate investors don’t generally hire programmers to make full stack web apps just for them. Programming is too expensive (it’d be like you or me trying to find a rocket launch from our personal finances) so stuff like property management software is outsourced to SaaS providers. If you’re looking for a full-time job maybe check out whether any of the property management software companies are hiring. If you’re looking for small gigs maybe do some networking and see if you can find someone who needs a simple lead funnel site set up with light automation.

As far as what area is best to buy in, the New York area is going to be tough since it’s expensive. Since you have time while you build up your finances, I would run numbers on what you can afford and then spend time on Zillow or a similar site figuring out which neighborhoods or suburban towns are in that price range. Then take a few trips there and walk the neighborhoods to get a feel for them. That will teach you a ton after a few trips. Different areas are going to have different classes of property where you are going to get different kinds of return. The “best” area depends on what your goals are and where you’re personally willing to consider living since you’re talking about house hacking.

I’m sure software is getting better every day but this is too important a number to trust to an algorithm. I would do it yourself so you can “show your work” and trust the conclusions. There simply is too much data that goes into valuing a property that isn’t clean and “machine readable” as they say in the software industry, unless you’re in an area with a huge supply of genuine cookie cutter houses.

If you’re not sure why some houses sell for a lot more than others I would find a local agent for your team who can give you insight.

All of that said, there’s Zillow Zestimastes if you just want a general idea.

> “Fair Market Rents, as defined in 24 CFR 888.113 are estimates of 40th percentile gross rents for standard quality units within a metropolitan area or nonmetropolitan county.” (Source)

So I think the answer is yes, but only if market rents in your area fall too, in which case you’re in a similar boat anyway.

The other part is … the tenant has to stay eligible. If the tenant’s income changes, the amount of the voucher they get can change accordingly.

The problem with your first and second thoughts is that they don't cash-flow after you move out after the period when you use it as your primary residence. The fact that you are able to save $1500 a month currently is excellent. In your situation, don't buy something with negative cash flow that eats up that $1500 just hoping for appreciation. Of the options you shared, I vote for your third thought.

Another option is to look for a below-market property in the areas you're familiar with, something where the cash-flow numbers would be positive after you fixed it up. But that may be really hard to find.

If people seem interested until they run the numbers and then you hear nothing, that could very well mean your own analysis is off base. People probably wouldn't pass on a good deal. I would approach the potential buyer and politely ask for a simple breakdown of how he is estimating the rehab cost. What is he estimating for demolition, for plumbing, for electrical, for painting, for HVAC, for cabinets, for appliances, for flooring, for the roof, etc.? Then compare that to your own numbers. That would then be a basis for negotiation. Maybe you know (and he doesn't) that the property doesn't need one of those things. Maybe you have better estimates than he does for how much some of those things cost, and can prove it to him. Or maybe vice versa. You could frame how you approach him as "hey, I would like to figure out how to make this deal work but I first need to understand why we are so far apart."

It's impossible to tell in the abstract whether your $50K - $60K or his $120K is closer to the truth without knowing more about the property and what it needs, though.

@Bonita Woodbury, if you have $60K available, have you considered trying to buy a small multi-family as a house hack? Depending on the market, that could either cover a conventional down payment or a low down payment on an FHA loan in an expensive market. This podcast episode has a good overview of the strategy.

If you intend to use it as a vacation home, make sure you pick somewhere you like to vacation yourself! That said, it sounds like you are in a great position to know how to keep your costs down. The other side of the equation is making sure you're choosing an area with strong rental demand. There's some advice on choosing STR markets in this podcast episode that might help.