All Forum Posts by: Ryan Daniels

@Tyrus Cowan

Hi Tyrus. Im also based in Cookeville and looking for rentals. The market here is arguably over-heated. I have toured several properties and made a few offers, but no purchases yet. I have started to expand my search radius, and will dig into off-market deals when work slows down this winter.

Where did you relocate to Cookeville from?

I think a lot of us are having the experience where we learn that our local market may not be suitable for our investment capabilities. I certainly am. I have been consuming a lot of media about investing out of state, or even out of my local area. I see a lot of people asking the same lazy question : "What market should I invest in?!" I don't want to ask that question, because I don't think it has an answer, and I think even spoon feeding someone an answer, they still are unlikely to have success, as they haven't done the requisite homework to evaluate and make best use of even a great answer.

I'm a travel nurse, so I am quite rarely ever home. I'm on the road 3-6 months at a time. This does give me a unique opportunity to visit and "trial" several different cities/states across the US, and evaluate them for investment. I have also lived in a lot of states over the past decade, and I keep them in mind for potential investments. 

My other strategy, which seems way too unwieldy and unfocused, has been to open Google Maps, and pick random cities that I have either heard of, or are adjacent to population centers or natural attractions (mountains, lakes, parks etc), and start looking at Zillow and comparing historical data for the props I see listed to try to gauge where we might be on the bell curve of appreciation. This can not be the best, or even 2nd or 3rd best way to go about this.

So now I'm trying to be more scientific about this. Apart from scanning the news and paying attention to where  players like Amazon will open their next shipping hub, or Apple will re-route its domestic manufacturing plants (assuming they have any?), what hard data can help lead to revelations about what markets are poised to pop and why? Should I be looking at population changes, age, demographics, education levels, home purchases, home construction, and in what way? I'm on the US Census site, and the amount of data is almost overwhelming. 

Apart from the Census Bureau, where else should I look for data? Which data sets, generally, do you think are most helpful for finding target markets?

My rate dropped from 4.75 to 3.99, according to my loan officer, due to this change. Background so the numbers have meaning - Conservatively approved to 400k, FICO 800, clean history, 20% down payment on non owner-occupied investment property, 30 yr fixed conventional loan. Got pre-approved 10 days ago quoted 4.75, notified of the better rate and the reasoning on Wednesday.

Looking for my first rental property, and I am seeing absolutely nothing on market that would adhere to any of the fundamental analysis that I learned on the BP podcast and from browsing these forums. The 2% rule of thumb is not even remotely close, nor is the 1%. The best I have been able to find has been collecting about 0.5% of the purchase price in monthly rent. 

With contractors hard to find and materials costs still elevated well above where they were pre-pandemic, BRRRRing is not nearly as safe a bet as it once was, especially not with a ticking clock of a hard money lender.

I've noticed on the podcast lately they have started saying things about "Just getting in" and "not trying to find the perfect deal", but just something that "gets you in the game"... So my question then, is, do the fundamentals even apply in these hyper-inflated markets?  I kind of feel like I'm in a dangerous position, walking around with a loaded shotgun of a down-payment, just looking for the first thing that moves in the bushes to point it at. Because so far, I have not found a single thing on market in a few different localities that would meet any of the often circulated investment criteria.

What parameters have shifted in your investment critera this year, and what have stayed the same?

Thanks for the replies. Interestingly, my lender says they must have a "living persons" on the loan and the deed. Thus, if I wanted to form an LLC, I would need to be shifted to their primary market, in-house lending rather than a conventional fannie/freddie loan. Unsure what those rates and terms would look like, or how much different they would be from the 3.99% 30yr fixed I've been quoted for non-owner occupied investment prop loan.

Has this topic been beat to death?

Do those of you who are renting out homes/apts/mutli-fam structure your investments to be owned by you personally, or by an LLC which you own?

I earn a pretty decent living outside of Real Estate (where I currently earn nothing). Having a somewhat sizable income, I have accumulated a fair amount of assets in the form of cash, stocks, bonds, and other physical assets. I think sometimes that this may present a target to renters who occupy the types of units that I am investing in. As such, I have major reservations about owning the properties in my name, in the event that a tenant slips and falls, or brings suit for some other problem.

I will be utilizing a property mgmt company for any rental properties that I buy, wherever I buy them. I don't actually want to meet the tenants at all, beyond reviewing their screening process. I will not be the one interfacing with the renters at any point... I already have a full time job.

So, do you use an LLC or some other corporate structure? Why or why not?

FWIW- i already own an LLC for my main working gig, so I'm familiar with that it takes to create and maintain one.

What do you mean my underwriting is optimistic? Do you mean you believe expenses will be higher than I have listed? If so, why? Or are you talking about the loan underwriting?

Thanks

How big of a deal is it to buy a property to flip in a FEMA DFIRM zone A area? The Zone A area comes into the property, but not onto the structure itself.

Is it difficult to unsure and sell such a property? Anything special that I would need to do in order to get a loan?

@Josh Thompson

I'm currently reading The ABCs of Real Estate Investing. In the book, the author states: "The seller's asking price is irrelevant." He goes on to say that the numbers need to work, and that is how you land on an offer number. The asking price has nothing to do with it. If the numbers don't work, you gotta walk, or make an offer where the numbers DO work and see what the seller does.

I'm also walking away from a negative cash flow deal right now.

You know, I'm really not sure. This area, like many others in the US, has seen a post-COVID spike in real estate prices. As of yet, rents have not caught up. Its possible the rents could be pushed up a hundred bucks or so, but I wouldn't pay that to rent this place. And there is a huge shortage of multi-family on the market in this area. I think this is why this listing remains on market and hasn't been snatched up.  

Maybe time to look off-market or in another market altogether.