All Forum Posts by: Nik Moushon

I bought my SFR of 1200 sf, 3 bed 1.5 bath on .25 acres for 235k....and that was after a bidding war with 5 other people. Housing is extremely scarce in my area that is under 300k.

If its with-in walking distance of the university then I would consider it because you could rent out rooms instead of the house as a single unit. If its driving distance then I would really have to think about it. Just because college students prefer walking so they dont have to have a car and pay for parking. 

Either way you should REALLY run some detailed numbers. Don't go by just the numbers you currently have. 

I vote pay off that $14k debt. That still leaves you with $11k to invest. It wouldn't be that hard to come back up with that $14k (or more) from somewhere else if you really needed it to make a deal happen. 

I've never heard of those.

@Mike Dymski, First off I am by no means a financial adviser so this is just my personal opinion. So if someone disagrees with me then by all means go ahead. 

Secondly, I wasn't trying to say he should stash his cash under his mattress. I was strictly comparing paying off mortgage vs buy more rentals. When i was saying he should have cash it doesn't mean literal paper currency. There are lots of ways to invest your cash and have easy access to it when you need it. So if you can invest in a way that doesn't tie it down to where you cannot access it when needed thats the better option of the two. So paying off a mortgage is not letting you keep your cash easily accessible. (Unless you can replenish your cash in a couple years as I said above) Ya, you could do another loan on the equity you have now but whats the point of paying it off just to re-apply another mortgage? Anyways, do you get where I'm going with that? 

My personal strategy (again I'm no expert) is trying to balance cash and investing. I personally do not like dumping every last penny I have into an invest of any kind. I know that I got that from my father so its more of a trait handed down than any kind of sage advice. 

Third, I think I might have got a bit confusing because I got pulled into a meeting in the middle of typing that so I came back to it like a hour later to try and finish that post. I might have not been as clear as I meant. Sorry about that.

A couple thoughts:

1- Framing does seem high but if you have no exact plans its probably just a ball park number. You could save some here if you hire out any structural walls (exterior or interior load bearing) and do all the interior non-bearing walls yourself. 

2- Drywall sucks....but you can save a TON doing it yourself. This is almost always something I try to do myself unless I don't have the time because it is time consuming if your new at it or doing it by yourself.

3- Painting is only timing consuming. Again unless you dont have time do this yourself.

4- Leave electric/plumbing/HVAC to the pros. This is something that can cause you massive trouble if you mess up. I dont touch electrical unless its little things like installing fixtures and outlets/switches. So you could do that if you want but you wont save a ton but you will save some. Another option is looking into mini-split systems or ductless systems. The main chunk of the price for HVAC is running the ductwork. 

Those are the areas I always looks to cut costs. Will take some time but its usually cheaper. 

TL;DR - Do as much work yourself as you can. Google/YouTube is your best money saver. 

I believe there are actually laws regarding how to handle a house (and the rehab) that was a drug lab. It probably varies by state. I want to say there is quite a bit to do as there are off gas from materials that have absorbed the chemicals in the creating process of drugs. Kind of like having to deal with asbestos, so probably $$$.  Do some serious research before you buy this. Real serious research because since you now know the odds are 99.999% they cooked in there you are liable for anything after the fact. Personally I wouldn't touch it unless the price would allow me to bulldoze it and build new. Others might say it could be saved but I just don't want that hassle not matter the money. Again just my personal opinion as I have no experience dealing with it.

I agree with Steve. I would not consider the taxes/mortgage difference as a real means to consider what to do. Thats just me though.

If I was in your shoes though I would keep the cash. This bull market can't last forever and theres going to be a down turn. Personally, my uneducated guess is that we have another 1-2 years before the market starts to turn. How much? No way to tell and it doesn't really matter. As long as your mortgage interest rates are locked in you can ride out any down turn because with every down turn the demand for rentals either stay the same or go up, rarely are they effect and if they are its not a huge amount like SFR. Because of this you can use your cash to get more properties when prices dip with the market. "Cash is king" is a popular saying for a reason. And if for some reason the market takes rentals down with it you have cash to keep yourself afloat and keep the properties.

As for paying off mortgages I think you should try to, with the above paragraph, get as much cash as possible for the market turn. Do some math and see what would happen if you pay off 1 or 2 properties now vs keeping the same cash flow. How much can you rebuild your saving in the next couple years? Then compare that too how much you'd have if you didnt pay off any mortgages and kept the same cash flow. If you're pretty close or over then I would say pay them off. My goal would be to have cash during and at the up swing of the next turn. This will either save my butt if the worst comes to be or help be ride the up swing. 

 Thats pretty good. Even with considering winter weather. Again, nice job!

What was your timeline for this project? Nice job.