All Forum Posts by: Nathan A.

Are you sure of the $6000 rent? I'm seeing a nearby comp for $2900.

Do you mean the ebook? I preordered it and received an email today with the subject line of "Happy book launch to Real Estate Rookie! Digital files now available." Did you get one of those?

If the comps are around $450K and you need to leave 20% in the deal, the maximum you could cash out would be $360K, which obviously wouldn't cover $380K of purchase plus $30K of renovation, plus costs you haven't mentioned like the holding costs and closing costs. So yes, you should be concerned about your margin.

That said, you're still forcing appreciation by doing this deal, plus it's providing you a place to live over the next year. Can you loosen your definition of "successful" to be getting some of your money back, even if not all of your money back?

Do what you can to get it to appraise at the high end, and another thing to consider is you could always sell it as a flip if you really need the seed capital back.

If you have the down payment, find a lender and get preapproved, then go on the hunt for your property! There’s nothing wrong with “noncreative” finance!

What are the lot rents? If it’s in a mobile home park that number is an additional strike against the cash flow.

1. Learn to analyze properties. The BP calculator might help. With a house hack, you may not actually end up with positive cash flow, but the important thing is that you pay less for your housing than you would renting. You could also choose to analyze the property as if you didn't live there and it was fully rented out, to make sure it would have positive cash flow if you wanted to move someday.

2. The biggest thing you'll need is a strategy for getting equity. That could be saving up for a down payment on another property. That could be BRRRRing another property. Or it could be waiting for your first property to appreciate and cash-out refinancing and using the proceeds to buy another property (it would be hard to do that in a single year though).

3. It depends on your preferences on cash flow versus appreciation. Appreciation will tend to be lower in a worn down area, but cash flow will tend to be be higher, other things being equal. If you aren't seeing dramatic differences in cash flow or cash on cash ROI between the two options, absolutely buy the worn down property in the nice area.

Here is one.

Many folks would say that condos tend to have poorer appreciation, and you don't have control of the HOA fees or special assessments. Here's a blog post on some pros and cons of condos.

Can you get tenants to pay utilities? Also, you're assuming more vacancy in the vacancy number (1 month a year) than you are in the property management number (turnover every three years).

Consult a CPA, but capital expenditures like the renovations and the furnace replacement get depreciated, not deducted directly. You can deduct the tenant's share of the utilities against the rental income, but not your own.