All Forum Posts by: Shankar Sridhar

Hi @Shyam Panchal , did you end up buying a property? 

Thanks @Connor Cushman, I will keep an eye out in that area.

@Brenden Mitchum, thanks for the info. I don't want to take on too much rehab as I don't have any experience dealing with contractors.  Do you see growth down the south of Atlanta ?

Hi all,

I am trying to buy my first property and trying to start that with Atlanta market with around 150-180k$ budget.
Looking for single family homes which can cash flow

I know things are quite hot here too. Hence areas near metro is out of my range.

Any suggestions to know where I can look under my buy box? 
Some of the areas I have been analyzing are  - East point, Hapeville near metro.
Douglasville in the west,  McDonough, Stockbridge, Jonesborough in the south.  Acworth, Marietta in the north.

Are these B- to C+ areas where I can get stable rental income ? 

Any other tips and suggestions to choose my market is appreciated. 

Thanks

Hi @Cory S., what is the property management company you use? Thanks

It might be worth if you are going to live in it or house hack., but I feel condos might turn out bad as investment property for buy and hold, especially due to the HOA and their involvement in managing the property.

@Krystin Aversa

I am totally on the same page, just that I am trying to do it from San Diego. My price point of even 700k$ does not meet good safe neighborhoods for a multi-family here, add that to a negative cash-flowing property for a first time buyer. Scary enough to make me consider out of state investing.!

@Gerardo Hernandez

Hi Gerardo. I am a newbie to real estate too and trying to find a deal here in my backyard in California.

I don’t have much experience and I am not here to say if it’s a good or bad deal and keep beating you down.

I just wanted to say that I relate to the emotions you went through and it’s completely okay to back out if you don’t feel it’s right. You can always find a similar deal. It’s a learning experience.

You may not even find another in this hot market, but that’s still not worse than getting into a bad deal.

It’s the same fear which is preventing me from submitting even my first offer.! But I have other concerns in my market where I have to depend on appreciation for at least a decade for me to reap the benefits and come out of negative cash flow!!

@Allen Scoging

I am also on a similar page as you, trying to find a good duplex deal in SoCal. But I am trying to attempt it with very less down payment (3.5% FHA), and facing the same roadblock as you. The rents cover almost the PITI if I move out. When I occupy one unit, it does not reduce my current monthly rent I pay.

The idea of going negative cash flow when budgeting for expenses for a long duration is sure scary for a first timer!. From what I modeled, I estimated that I can just break even(i.e. recover all my out-of-pocket expenses) only after 8-10 years if I sold the house. 

@Ali Boone Thanks for referring to your article. I have read it before, but now, it even more makes sense.
the negative cash flows for me go as far as 1000$ per month. I think I need to turn this appreciation factors into pure numbers and get the quantitative picture.

When you say profitable, what is the metric you are looking at? Annualized return? NOI?

I was calculating my profit along these lines:

Cash In Hand = (House value after appreciation for that year) - Loan Balance - SellingCost(10% of house value)

Profit = Cash In Hand - ClosingCost - DownPayment - MortgagePaid(which includes PITI + maintenance).
Is this right way of thinking?

All these info makes me think that they should have introduced Real Estate Investment 101 during school. LOL.

@Joe Norman, thanks for the advice. Definitely cashflow would be great. But as a first-time investor, I am trying to see if I can workout things in my current market as a primary residence to start with less capital. In my case, I am thinking its best to include property management fee as well to know where my numbers go as I am more likely to use their help as a newbie if needed.

@Dan H. Thanks for your insights. Agree with your exclusion of CapEx as it depends on property's condition and the usage. I will try to think more on how much I can support this negative cash flow over the years. Definitely, my income would increase as time goes, but I don't want it to ruin my near-future investments just for one property.