All Forum Posts by: Nicholas L.

@Steve K.

can we all agree to meet back here in 2030, 2035 and 2040 to see if anyone's predictions came true?

i'll say this.  i'm bullish on real estate.

@James Hamling

agree with your take although I confess that I do hold some IBIT just in case Bitcoin goes to $1M.

@Alan Verde

a couple things:

2-4 units are typically valued on comps.  so raising the rents might be the smart thing to do but it won't increase the value.

on the cash thing - no, nothing to do with the renovation.  you just mentioned buying in all cash using savings.  my point was, don't invest all of your savings into anything - you need to keep liquid cash on hand for other opportunities, for emergencies, etc.  that's why having all your cash stuck in one property is high risk.

and - most of us use leverage to get higher returns.

@Alan Verde

hello. i am not sure what size MF you're talking about (4 units, 14, 40?) but... this likely will not work.

if it's not distressed, then you likely won't be able to add value and increase rents; and if you can't add value and increase rents, then there is no opportunity to refinance.

i would also recommend not ever putting all of your cash into something as that can actually be high risk as well.

hope this helps

@Travis Kumar

are you working with a CPA?  they will be able to give you the best advice as they will have much more information than we do. 

i believe that in a specific year, passive losses are phased out over $150K as you noted, but they are just suspended.  so, that would be something to talk to your CPA about.

other investors may have REPS.  those of us with full time W2s generally cannot claim REPS unfortunately.

How to Become a Real Estate Professional Status (REPS) | White Coat Investor

everyone's tax situation is different and no one but your CPA should give you tax advice.

hope this helps.

@Jennifer Roussel

hello! happy to help, but not sure what your specific question is.  

it can be difficult to find investment properties by just browsing online.  many sellers (as you may know) look to get whatever the highest price for a similar property was, regardless of how much updating their own property needs.  they don't care that it needs new appliances or that their furnace is 47 years old or that it has no parking.  their neighbor 10 houses away got X and so they want X + $1.

you may need to analyze dozens or even hundreds of on market listings, and also look off market to find something that has potential.

hope this helps

@Luca Papa

start with a house hack

I can't say specifically since I only know what you posted, but first you need to make sure your own financial house is in order (savings, etc.) - and then for a property, you need down payment + closing costs + reserves.  And that is going to be specific to a property.

@Marty Shawn

your post is really thoughtful and your analysis is spot-on.  the market is just difficult right now. i don't have any silver bullets for you.  so here are my answers.

Should you house hack?  Yes, if you can.  Only you can determine if it makes financial sense for you and fits your lifestyle and commute.  And only you can determine how much you're willing to spend each month.  But I would keep looking.  If others give up after just a few weeks or a few showings, then don't be like them - keep looking until you find something that fits.  Maybe it takes a year.  So what?

Would it be less risky to just invest out of state in other markets where I can get neutral or slightly positive cashflow? 

No, it would not be less risky.  Many new investors get entranced by supposedly lower prices in the markets you mentioned, buy a property, turn it over to people they've never met, and immediately start losing money.  There is basically no cash flow in long term rentals anywhere right now.  Sure, your spreadsheet might show you making $102 a month on some random property after all expenses.  But... what about paying back all your closing costs and leasing costs and rent ready costs?  And what happens when you have a rough turnover 2 years in, and have a few thousand dollars of repairs?  There goes 10 years of cash flow. Spending every dollar you have on a random property before you have a primary residence does not make sense.  Here's my required reading on OOS:

https://www.biggerpockets.com/forums/963/topics/1195280-expe...

https://www.biggerpockets.com/forums/48/topics/1160450-run-i...

https://www.biggerpockets.com/forums/48/topics/1137397-balti...

https://www.biggerpockets.com/forums/52/topics/1010977-12-00...

I've also seen advice about reaching out to local flippers to try and learn more by putting a small amount of money into their deals. But I'm not sure how I would go about doing that (or creating an agreement like that), or even vetting people for it?

This is not a beginner strategy.  Almost no established investors / flippers want to borrow a small amount of money from a brand new investor.  It makes no sense and is highly risky for both parties.

OR am I thinking about this wrong and are there other instruments or assets I should be looking at to get exposure to real estate more passively?

Can't advise you on this - all I know about you is what you posted.  But again, your analysis that nothing stands out right now is, unfortunately, accurate.

Hope this helps

Not trying to be discouraging, just realistic

@Andrew K.

can you house hack a 2-4 unit instead?  that is the best way to get started, period, full stop.

@Dominic Petoral

just to be candid, your goals are not achievable in that price range.  i would wait and save up more.  i also would not recommend partnering - returns on a single property do not justify it.

can you house hack instead?