All Forum Posts by: Rodney Kuhl

@J. Martin - I would love to be able to make the first a fourplex, but don't think I'll have the funds to make that happen at this point. Definitely down the road! That is great info. I was under the impression electric would all be on one meter ad water would be split up. I'd guess it could be different everywhere. But I'd think it's fair to at least make the tenants pay some of those utility bills.

I'm looking for cash flow, but at the same time, if I'm planning to hold the property for awhile until I can "trade up" (like playing monopoly, 4 small units first and then trade up for a bigger one), maybe the duplex wouldn't be the best option for down the road? Like you said, a duplex would likely be more difficult to sell down the road, or at least would likely be sold at a lower price. So would that be a good reason to look at a SFH home instead as the potential profit from selling it down the road could be greater? (I know that is not guaranteed and is purely speculative, which I'm trying to avoid).

I think with the right deal I'd lean towards the duplex at this point because I like the higher cash flow and the idea of having someone still there to help pay the mortgage during a vacancy.

@Jay Orlauski - Thanks for all of that input! Great point about making the mortgage payment during a vacancy. I also hadn't really considered the thought about one insurance policy/property tax in a duplex vs. two for 2 SFHs (yes, I plan to add more to my portfolio).

Would it be a possibility despite only having one meter to have the tenants pay for water by splitting it in half? At my old apartment our water bill was simply the total for the apartment complex divided up amongst all of us. This seems reasonable for water as the bill isn't as high and not as different from one place to the next (whereas an electric bbill could be drastically different from one place to the next based off usage). Would this be a possibility or would you avoid this?

Thanks for the insight!

@Mike D'Arrigo - Thanks for clarifying that!

@Steve Chaisson - So are you against using OPM? Isn't that basically what leveraging your money is, and isn't that a cheap way to start to accumulate properties? I agree adding debt can be risky, but adding good debt isn't a bad iea in my opinion. If the debt is helping you make money, then it's not a bad situation. And yes, money is really cheap right now.

I think that is great advice to jump in like a wholesaler at first to learn how to find and take action when deals present themselves. My fear/misunderstaning with wholesaling is that I don't have the cash to close the deal, so if I can't sell the deal to an investor, does the deal get stuck on me? What can I do then?

Learning comps and the areas is a fantastic idea though for sure. Thanks.

@Wade Sikkink - Yeah ok, that makes sense then. I'd have to get a quote on the utilities (should I assume I'd have to pay for electric, water, trash, and sewer? Am I missing anything?). From there I would crunch the numbers again and figure out if it's a good deal or not. Got it. Thanks!

@Raymond B. - Not sure why, but no names pop up when I type the @. Maybe my work network is blocking that part or something.

@Wade Sikkink - Thanks, Wade! That makes sense too. I think what I'm gathering is that there isn't really a right or wrong way to go with either, as long as they both are good deals. I definitely would agree with your reasoning that a SFH would have a greater chance at appreciation. My long-term goal would to have enough cash flow to replace my income (haven't figured out the shortest time frame I could accomplish this in yet). My thought was to get a sense for what passive cash flow would feel like, having that come in every month. But at the same time, I guess I was thinking along the lines of Rich Dad and simply to start small and trade my way up (play monopoly). In that case, I guess you'd say the SFH home would be a better start? And then after acquiring a few SFHs, possibly trading those up for something with a great cash flow (duplex/triplex/etc)?

I used the 50% rule (and then some) to figure out expenses. I guess I'm not sure of if that 50% rule takes into account the differences between a SFH and duplex - i.e. paying for utilities in a duplex as opposed to having the tenant pay for utilities in a SFH. That would have to be an extra cost, no? (I could be wrong in assuming the assignment of those fees in each case).

@Paul Timmins - (can't seem to get the @ hyperlinks to work...)

Thanks for the advice! I definitely went through the UBG my first couple of days on the site. I should go back through that again. Definitely a great free resource!

Just discovered the podcasts probably 2 weeks ago. I'm currently on Show 21. Listen to it while I'm driving to and from work every day. Fantastic stuff on there. Learn a ton.

I attended a local REIA meeting as well as some other MeetUp events and that has also been a great way to learn as well as meet people.

I well definitely continue to do more of that stuff. Thanks for the advice!

It's interesting you mentioned student housing. I thought of doing that even before I started learning more about REI and was on BP. Living in the Indianapolis area, there are several campuses: Butler, IUPUI, U of Indianapolis, and Ivy Tech. I thought that would be a great way to ensure always having tenants in place. How can student housing be 2-4 times higher than normal rentals? I hadn't heard that before but that definitely intrigues me!

Would you say maintenance repairs would be estimated higher at a student housing rental as opposed to a rental for a family?

@Bryan L. - Yeah, that's sort of what I had in mind with this question. All of the numbers look great. But they won't look great if there is a higher vacancy rate, more repairs, etc. And like you said, if it's not cash flowing like I anticipated, it would be a lot harder to sell as only an investor would be interested. Thanks for the input. I take it you had this scenario play out by the way you were explaining things?

@Steve Chaisson - Thanks for the response! If I'm understanding what you are saying correctly, it's that you would consider it a better option to use the cash I have on hand to buy a property with a lot of equity now to potentially flip/sell it for a capital gain rather than have the passive cash flow coming in? I've definitely been thinking about going the flipping route. I know it's good to have several exit strategies in place before going into a deal. I can't figure out how I would make it work if I were flipping a property but couldn't sell it. I would have to borrow the money for the rehab costs from a private or hard money lender as I don't have the cash reserves on hand for that. So if I couldn't sell it and the loan became due, I'm not sure I could work my way out of that deal. Do you have any insights on this? (Sorry if I misunderstood what you were getting at with your response).

@James Mudd - That's the impression I'm under as well since I think there would only be one electric bill for the entire property. How much should I estimate for utilities (electric, water, trash, sewer, etc) for a duplex to analyze the investment?

@James Mudd Thanks for the input! I am not planning on living on one side of the duplex. I just bought a residential house about 2 months ago (that's what started my interest in REI). I don't think my fiance would like moving into a duplex this quickly after we moved in to our house. Haha.

I think you make a good point about it depending on the screening process. What do you think about how utilities would be divided on a duplex?

I am looking into buying my first rental property. I've been in contact with a few different people who have companies that provide turnkey properties to investors. This intrigues me as a way to find a stable, positive cash flowing property to get me started.

As I was looking at properties and crunching numbers, a duplex seemed like not only the most monthly cash flow, but also the highest COC return. But I was wondering if anyone had an opinion on whether a duplex or SFH would be best for a first rental purchase? My concern is simply that renters for a duplex wouldn't be of as high of a quality/less reliable than tenants in a SFH. Also, I'm thinking with a duplex the utilities would have to be factored in as a cost that I would have to cover.

Just wanted to see if anyone had opinions on whether one property type was better than the other for a beginner investor just trying to get his feet wet? Thanks!

@Yang Xiao, welcome!

@Mike D'Arrigo, thanks for the input. I'd be interested in that report if you don't mind.