All Forum Posts by: Nicholas Richard Ray

Great info James Fowler and George Skidis . I’ve found talking with others investing in STL that more often than not multis have the landlord paying for sewer, water, trash. I’ve thought of billing back the tenant but I wouldn’t want my rental to be one of the few that doesn’t include it and then lose prospective tenants. Even if the cost is similar or the same including water etc. I think some will notice it’s not included and just move on. I’m still undecided honestly. The concept you explained though makes perfect sense in applying funds received to utility payments and then rent to mitigate risk.

I agree completely with @Thomas S. on the training and the friendship part of landlord - tenant relationships. I house-hack and inherited the tenant that lives in the other unit. There wasn't a knocking on the door issue but our tenant was very text friendly at first. I chose when and how to reply to her texts to where now the few texts I receive are about an appropriate issue and not anything more. 

One great tip around is to have a 'rent talk' when you inherit or place a tenant. Just search that phrase and you'll find plenty of info on the details but it essentially spells out what priorities are for tenant and landlord, responsibilities, when and how to contact management/landlord, etc. It sets the playing field moving forward and if you stick to your guns they'll accept it and abide or they'll move on to a less stringent manager/owner they can manipulate.

Li Tolentino I am replying from my phone and can’t look at the spreadsheet fully. The post itself though made me think what was already said about it being a tight deal. With the interest rate increase you’ll factor in and the closing costs it starts to look bleak. I don’t know a lot about turnkey but obviously you’re buying “retail investments” if you will and that would mean less work up front by you and bigger price tag. There’s a great thread right now debating if even $100-200 per door per month is enough cash flow. As a lot of people on here would, I’d say you should look for something at least at the $100 level even in turnkey. Again, I couldn’t see the spreadsheet but you said $1000 annual cash flow which is less than $100/mo so just a disclaimer in case I misunderstood.

Kerry Cissell I’ve spoke with a couple people that know investors succeeding in the area. I just got a property to rehab and rent once it’s done so I’ll see more into that question after rehab. One reason I pulled the trigger was knowing that people can make it work in that area. Another is the specific location - STL is block by block realistically so you have to find the good pockets to minimize your risk. Past that stay true with your numbers, screen your tenants thoroughly and be prepared to evict if need be don’t push it off. Hope it helps and good luck!

@Federico Morales I'd have to say the @Joe Splitrock hit it on the head here.

Separate emotion from business - you said you want to hold on to it but in reality it's not a great investment. Unless you plan to move back into the house after working abroad - which we could all debate the pros and cons of that situation - it would be best to take it to a better price-to-rent area. Like Joe suggested, the Midwest has a reputation for being a great cash flow area. 

This is great info here. @Chase Gochnauer I'm curious as I have a property I plan on rehabbing shortly, renting, and refinancing. Are the properties you've refinanced rentals? If so, do they have to be occupied before the lender will cash out? @Neil Sinha any thoughts on this as well?

Sorry @Bon Osonwanne I have mine under my name now so I can't contribute much to the LLC debate yet. However, just in my limited knowledge and an attempt to contribute I think the general rule around is 10 loans to a name and then you'd need a portfolio lender to be doing anything past that. So if I understand it right, at that point you're no longer borrowing against your name, income, DTI. It's against your real assets essentially. That may be over simplified and completely wrong but I hope someone will correct me if so still trying to learn!

Welcome Natalie,

The 70% rule really is for flipping - it's a quick way to see what you would want to pay for a potential fix and flip property. 

If you plan to house hack what I would recommend is run the numbers on each 2-flat, or 3 or 4-flats if you're open to it as it's all residential, as if it were rented on both sides - not you living in one unit. That will tell you if it'll be a good property to hold on to after you move out which I would assume you will eventually. 

The best bonus of house-hacking to me is the low entry point so with less leverage if the numbers work it should cash flow even better if you refinance down the line. Now that's dependent on interest rates, PMI amounts, etc. etc.

Hope it helps and good luck!

I am currently about to start a rehab in the coming weeks and I have to say there were certainly a number of things that hadn't crossed my mind. I feel confident the cushion I have in the deal will allow me to still have a rehab and holding expense and walk out with a good profit. That said this list showed me things I can now at least expect and we'll see what other surprises the rehab itself presents! Fantastic article.

I'm very new to investing in general and in the city. Just moved to South City in Dutchtown at the end of last year. It's definitely a C area as a lot of the surroundings to me are. @Megan Greathouse explained the landscape much better than I could have for the city in general. 

One thing I would point out is the possibility of moving further westward - St. Charles County, where I lived for 24 years, hasn't stopped growing with O'Fallon growing to one the largest populations around and Wentzville well on it's way. Megan shared a great article I believe recently highlighting population movement and St. Louis city fell slightly in population but the Metropolitan area actually gained slightly. The prices are getting higher out there as well but a great market with little to no crime really with a few areas that are a little older and more affordable.

There's plenty of others here that can give you much better insight on both markets I'm sure but felt it should at least be something on your radar especially if you're focused more on SFRs.

James Woodrich that’s a very valid point in the case of long term investor for CapEx. I think you could argue it’s very important for the short term too just because they have specific numbers and timelines likely so one CapEx item and their numbers just went wonky. Now I’m just TRYING to see the other side. Great post again, it provided a lot of content to digest and great debate!