All Forum Posts by: Quoc Tran

@Bradley Abramson

You can look at it from a returns perspective. If you're able to use that extra 25k and invest it, even with a measly 7% return you'll capture $1750 in the first year. Also, if you didn't have that extra margin and you weren't able to close on the next property, you're looking at a $0 return until you find the next deal.

@Patrick Costello I'd say there are a few reasons why someone would buy a such a high price. They believe the market will keep going up, or plan to stay in for a long term. They plan to live in the duplex and rent one side out to help with the mortgage, which means they don't mind paying more than half of the mortgage. Perhaps the area really suits their needs and wants. To them, they are still saving money by renting out the other side. Not everyone who purchases a duplex is an investor who concentrates on making money, much less cash flow.. It's a shame; if more people understood the basics of building wealth the world would be in a better place. Anyway, soap box over. Patrick, try not to rush yourself into a bad deal. Be patient and seek for a deal that pencils.

If you have time to think about it, check out the book "Never Split the Difference" by Chris Voss.

Everyone on this thread is mentioning to meet halfway, which is splitting the difference. Which means both sides are losing on this negotiation. Chris would advise that you come at your tenants with an open-ended question... 

Tenant: "We want $200 off of our rent"

Landlord: "How am I supposed to do that? We want to provide what is fair to everyone. Am I being unfair?"

Tenant: "Um....well... no..."

Now the tenants will have an internal psychological battle with themselves thinking that their demands may be unfair. :)

Either way, it's a great book and I recommend it to everyone! 

It's never too early to start on real estate. It's extremely beneficial to have goals set so you can plan out the next few years. Even at 17 and knowing you want to buy properties in the future puts you in a frugal mindset. Figure out how to spend as little as you can for college. Get college credit in high school, apply and win scholarships, or even go to community college to knock out core credits. Go into a major that gives you a good ROI on money AND time. If you're going to spend 4 years learning a subject then it better make good money afterwards. Even after college, be frugal, live like a college student still, house hack, invest the money earned rather than spending on shiny objects. If college isn't for you then you better have a very good reason not to go! Like others have said in this thread, REI is a long term play. Best you can do right now is plan your path forward.

@Karen Lipa House hacking is a great way to get started if you believe it's something for you. My first property was a SFR in Lakewood where I house hacked the spare rooms. This turned out pretty well: lived for free in a nice big house with mortgage and utilities paid every month, learned how to be a landlord, and gave me time to research about RE more. While searching for a property I had the same doubts as you... "The market is way too hot and prices can drop any day now..." This was two years ago, and we're still climbing. Denver is actually near the average affordability over the last 40 years. The market just seems outrageously high priced because people are comparing with prices from 2012, which was the lowest point in those 40 years. (Source: Denver Commerical Real Estate Podcast) However, this fear did not stop me and I bought the house anyway with intention to rent out the rooms and cash flow. But here's the kicker. I had no idea BiggerPockets existed before buying the property so I had no idea how to identify a "good" deal. The house just "felt" like a good deal... and turned out it was. The fact that you've already been researching puts you ahead of the game. You will have solid numbers to back up your "feeling like it's a good deal". You're in a better position :) I think the most important part is to start somewhere vs. never starting at all. Prioritize good cash flow. Even if prices drop, you won't lose money until you sell.

@Eli Rollins, if you stated in your loan that this will be your primary residence and owner occupied, it would be mortgage fraud if you decide not to live there. However, I think in most cases you have to live there for a minimum amount of time (usually 1 year) and then you can move out and rent your unit. Someone might be able to shine more light on this.

@Patrick Costello, I'm going to guess the $3900 rental income is if you had both sides rented out? If it is, then you wouldn't cash flow at all even by renting both sides out. If that's $3900 per unit, do other rentals in the area go for that high?

@Sam Rust Congrats, Sam! First of all, I strongly agree with you on the Colorado Springs pick. Millennials have been storming in and looking for places to rent. The military presence also provides a nice population of renters. 

But best of all is that you went BIG on your first deal. That's something I'm sure all of us here at BP admire. Keep up the hustle! 

@Lisa Beiriger +1 on Hotpads. I've had great outcome using their platform. Craigslist is a commonly used option, although there are some nutcases who respond to your ad. Just do your screening processes correctly, use your best judgement, process background checks, and have a damn good lease. 

@Russ Draper The $4k difference seems to be in the origination fees and points paid to lower the interest rate. AmeriSave quoted that they do not require these fees.

@Tyler Delbert Yes, Tyler. I have received initial disclosures from AmeriSave, which show that they do not charge such hefty fees. 

@Josh Engelhart Thanks for your input. I'm thinking this property will not stay in my portfolio for the long term (less than 5 years). Looks like I should go find some local lenders or go with AmeriSave. I'm better off forfeiting my $500 deposit than sign on another $10k of debt.