All Forum Posts by: Paras Newbe

Thank you @Bradley Dosch & @Michael Haas

Did not know too much about DADU. Just so that I understand right, in Seattle it is ok to build a smaller home in your back yard? Is that so? I live in Sammamish / Issaquah. Doesn't HOA rule apply for building small house in back yard? How difficult is the city permit?

Thank you for the response. I sent DM to some of you who responded to understand the market in your Area.

I am talking to someone in Austin area. She is saying she knows a builder who is ready to sell for discounted price and can potentially buy down some points to lower the interest rates.

Do you think buying in Austin could be a wrong decision long term. I will know the cash flow numbers after i talk to the builder / have property details. 

Hello - I live in Issaquah, WA state. I want to invest for cash flow in current market. I tried Austin, Kyle, Buda but most of them turned out to be negative cash flow If I do 25% down and also account for property management fees. I am looking for buy, and rent strategy (don't want to do rehab and all for my first try)

My goal is to have 3 investment by the end of June 2023 and I want each to clash flow (unsure about cash on cash return target for now). I plan to invest ~90K for each.

1. Anyone has suggestion where can I invest around locally (so I can do self management) for cash flow?  Is Tacoma a good area? Any suggestion? 

2. For out of WA state, where can I go? 

3. Any suggestion around single family vs Multiplex (duplex / triplex)

4. Will be great if someone can suggest property management company along with potential area of where to invest.

Will be great if someone can mentor me here.

Thank you. 

hello,

I am working with a property manager for a property I may possibly buy in Austin (Still researching). Below are the rough charges.

1) 70% of the first month rent for every new tenant.

2) 7% of each month rent after after first month 70% charges.

3) 10% of the maintenance cost will be have to be paid as a maintenance service fees.

I am little worried about number 3 above. Any feedback? Doesn't usually number 1 + 2 covers "maintaining" the property too?

Thank you.

While I am continuing some research on this and this, I want to get some input on use of LLC. I will be buying my first rental property in next couple of months.

Should I be creating LLC for this? Can some expert help me out here? What kind of pros and cons I am looking if I am using LLC and if I don't?

Thank you. 

Appreciate your repose again@Joseph Cacciapaglia@Joseph Cacciapaglia and @Aaron Gordy.

1.Joseph - You mentioned full service vs limited? What is considered full and what is considered limited? Service I am anticipating that I would need are a) property management b) maintenance (I just discovered that this is different from property management). What else would i need? 

2. As mentioned above, i think charging few 50 - 90 % of first month rent and 6 - 9 % every month after that is normal. I came to know that there is maintenance charge too (which are not included in property management). People charge like 10% of the maintenance cost as maintenance  fees. is this normal? This looks like an open door  to me. Any input here?

3. Is maintenance fees is one of the hidden fees I discovered or there are more? can someone please give me example? 

Thank you @Joseph Cacciapaglia for the detailed explanation. Couple of interesting take away from your post.

1. I am not looking for BRRRRs but simply Buy --> Rent --> (eventually pay off early and generate cashflow)

1. You mentioned 0.85% to 0.9% rent to price ratio? I could not find any area around Austin to make this happen. According to that number, If i buy a SFH for 330K (2200 SQFT), I need to get $2805 to get 0.85 ratio. Is it possible? What I could see is average rent of 2200 for 2200 SQFT house which accounts for .66% ratio. I will appreciate if you can give me some example where you have seen .85 ratio. Which area has seen this ratio?

2. 7 or 10 ARM will defiantly help with some cash-flow because of low interest rates. I am thinking of 30 year fixed. Would that be a wrong decision. My plan is to hold it. I am looking for eventually pay it off and increase my cash-flow.

3. What are acceptable property management charges in Austin area? couple of search tells me that property management usually takes anywhere between 60 - 90 % of the first month rent and 6 - 10 %  every month after that. Is that so? Or this is too much? With this charges for 330K property at 2200 rent, I am actually looking at guaranteed negative cash-flow (considering 5% vacancy, 10% maintenance as well). I will be paying ~2500 / year out of pocket in the hope that market will go up and i will break even one day. Wrong? 

Thank you @Betty Cruz. Yes, I am looking for honest opinion.

So it looks like investing in Austin (or may be any other area) with simply "buy and rent" concept, I should be aiming for appreciation (and may be cash-flow after some time).

For cash-flow I need to think more what to do. 

I am also in the same boat @Meghanath Reddy and following this thread. Two threads that might help up to some extent

1. https://www.biggerpockets.com/...

2. https://www.biggerpockets.com/...

Thank you everyone who responded (@Aaron Bihl, @Betty Cruz, @Stone Saathoff, @Joseph Cacciapaglia, @Steven Griffith, @Danny Webber)

1. I am little surprised about reply from @Betty Cruz. I though investing out of state is very common? isn't it? Is your concern about "how out of state people are buying fixer upper and fixing them  up remotely and so on?". I am not into fixer up (defiantly not into that while out of state). My goal is to buy and rent. Then also you would be surprised @Betty Cruz?

2. In Seattle area, prices are just too high. What other investor in BP would suggest in that case?

         - Anyone have any suggestion to go somewhere in state that can generate cash-flow? some little town ?

        - What other option I have if I am living in high price area. 

3. @Betty Cruz, I guess "easy" is a relative term. What i meant to say is, getting cash-flow possibility is more in fourplex then SFH. Would you agree a bit there?

4. About property taxes. As property tax goes up, wouldn't rent goes up too up-to some extent? Lets say Seattle area property tax went from 1 to 3 %. in that case wouldn't all landlord increase the rent to cover high taxes?