All Forum Posts by: Nick Anderson

@Doug Spence @Joe Splitrock @James Hamling @Matt J. Thanks for all of the input. We closed December 22nd, signed lease with Class A tenant same day starting January 1st. Little to no marketing needed, really hot rental market with few options in the school district. 

Hi Midwest BP,

I will be closing on a SFH in Edina, MN on December 22nd. My goal is to get it rented out with a short or long term lease by at latest February 1. My thought is that if there isn't a great long-term tenant pool, maybe a short-term or Airbnb strategy could get the home into a spring/summer rental cycle. AirBNB also probably not great in winter months. I have permission from the seller to advertise the home, but haven't done a ton of advertising other than Facebook Marketplace, with not many results yet. Any advice on what you might do in this situation? Thanks!

Hi all. I'm looking for recommendations on good HELOC providers in the state of texas, austin specifically. Most of my banking contacts are regional in Minnesota and say they wont work in TX per certain regulations.

I think BP has a rule on posting contacts but if anyone would be able to Direct message me, I would very much appreciate that.

What I have found while doing a SFH currently is that if the house was built after 1977, it is likely the ceiling doesn't contain asbestos. It was banned in the use of ceilings in '77, though product manufactured before the ban may have been used after the ban in certain circumstances.

I have seen so many people credit Rob Kiyosaki and his “Rich Dad Poor Dad” book to their starts in Real Estate, myself included.

Recently he has come out with some comments projecting a huge crash in the RE market. Most recently, he comments that if interest rates rise, that will be all it takes to burst the RE bubble.

Most rhetoric around the RE market crashing doesn’t come from data or sources that make much sense to me. BUT, it’s hard to deny his opinions when his opinions of the past have influenced how many of us look at money.

What do you think? Is Rich Dad wrong?

I appreciate all of the responses.

@Nicholas L. Do you think it isn't a good investment for a "beginner" because of the risk? Because of the assumption that a new investor doesn't have the funds to cover a few bad year? Truly curious here! What makes it good for a seasoned investor?

@Stephen Stokes I don't think there are many things more valuable than first-hand experience. Curious what, if any, indicators you see in today's market that throw up red flags for you?

@Damaso Bautista You make a great point. I don't have any intentions of being out of this market in the next 5-7 years. Cash flow is not my driver for REI, as I love the W-2 role I have and have no plans to replace it with cash flow.

@Ryan Kelly Nailed it, this is the core of my thought process. The question then becomes if it requires 25% down or more to find cash flow, does that mean that only people with that capital should invest here? Some of these responses suggest that! I still don't necessarily agree with the idea of crossing off a market because 40-50% DP isn't an option

@Greg Scott You're right that most markets significantly increased. I'd argue that most BP users have only been investing in a Bull market and have not seen the tide come out yet (myself included). That said, I'd push back in that I don't think you can find a market that appreciated more YOY than Austin MSA!

@Rick Stein Fair point. Do you invest in Austin? If you buy one property per year over 10 years, you effectively eliminate the idea of "market timing". Right?

@Jordan Moorhead PM'd

@Eric James You dont see investing in Texas, specifically Austin, as a good appreciation investment??

@Russell Brazil I fully agree, and I think this is the core of the debate. Given the state of the Austin Market, as @Ryan Kelly eluded to, it most likely takes 30%+ DP to generate a cash flowing property year 1. In your opinion, does this mean if someone isn't willing to put that DP down, they shouldn't invest here??

@Greg Scott @Jhanel Wilson I think in general both of you make really sound points, and I agree with the basis of your claims. Being said, consider this scenario: with a home buying grant and a low money down option, a new investor could get into the Austin Market for low or no money down. Let's just say a $200,000 home for give or take $5,000 down after closing costs. If it costs this person $300 per month after all expenses are accounted for, you are sitting negative ~$3,600/year. Over 3 years you are all in at ~$16,000 for a house that may have appreciated 40% over that period (Jhanel, you're right, that is a big "MAY"!!) But to @Dan Burstain 's point, the likelihood of the Austin MSA depreciating or even appreciating by only 3% YOY is statistically almost insignificant. So I guess my original question should have been more specific in that, Yes, this strategy is a gamble, but the risk to reward in this particular market makes a lot of sense. SO, assuming that it's a gamble, how much cash flow negative are investors in this area willing to take per month, at least to start.

@Jordan Moorhead you make a good point in that if you can find a property that net's positive, it is a no brainer in this market. If it takes 8 months to find that deal, and the market appreciates 5 more percent in that time, it becomes a tricky math problem to know which is a better play.

Thanks to all for the good conversation!! This is something I have been thinking about for a while, and I'd bet others in this market are too!!

I’m curious what people who are currently investing in Austin and surrounding areas (buda/Kyle/San Marcos/round rock etc.) are willing to accept for negative cash flow in order to get in on appreciation?

I know there are deals out there that are break even or maybe cash flowing $50-100, but are you missing out on appreciation by waiting for that deal?? What are y’all willing to take on in general in order to capitalize on appreciation?? Thanks!

@Account Closed My loan originator is with Cross Country Mortgage, if you PM me I'll give you his specific contact. But really if you shop around at any other place you may be able to get 3.5% down FHA. I guess I don't see the value in going to an FHA 3.5% though if you have 15% for conventional because FHA PMI is pretty crazy.

@Dan Hunter For my current SFH I believe that i could hire my own appraiser to show 20% down rather than refinance, but this requires 2 years time from the date of the loan origination.

That may be the right idea though. Wait for the 2 year mark, hire my own appraiser, and ask the bank to remove PMI without refinancing out of my rate. Good call.