All Forum Posts by: Seth Hochberg

Completely agree with Taylor! It's definitely one strategy to wait until the market is more of a buyers market. But that might be in 6 months or in 6 years. And as with all investing, the maxim goes: "Time IN the market is better than TIMING the market".

Hey Julian! Welcome to bigger pockets! You're asking some good questions:

1) It's always better to have more money saved up. So no matter what my answer to this question is, you should do everything in your power to have as much capital as you can. You can invest with no money down, but people are less likely to loan to beginners with no "skin in the game". How much money do you need? Completely depends on your market and your goal and your strategy. With BRRRR, you want to ideally buy the entire house with cash, so that might be 50k-100k in Detroit or Baltimore, but 500k-1M in LA, for instance. With house-hacking, you can get by with only a 3% down payment on the low end, so that could reasonably be only $5000 down payment in some markets.

2) Working with a partner has pros and cons. I would advise working with a partner if the two partners have very complimentary skillsets, otherwise you get the too many cooks in the kitchen problem, which is amplified when there's a lot of money at stake. If you're not sure, I would lean on the side of going solo.

3) Start by finding an agent. Find a good one - they're the one that should guide you through the process. They would show you the house and if you're interested, they would write up the contract for you to sign, etc.

4) There are lots of books and forum posts on how to screen your tenants. Or get a good property manager.

5) A rehab job should take 2-4 months depending on how large the project is.

6) With a BRRRR you should be buying in cash on the front end, so your credit score is irrelevant. On the backend, after you've rehabbed, a good credit score will get you a better rate for your cash out refinance. Aim to get your beef up / fix up your credit score regardless what real estate strategy you want. See Graham Stephen on youtube for some tutorials on how to best do that.

+1 for Jacob Rappaport. Very responsive and knowledgeable

Totally agreed with Joe Norman, they definitely still exist, but there's lots of competition. Are you having trouble finding properties that will cash flow well, or finding properties that will allow you to get all of your money out? If you want to PM me, I'm happy to talk numbers.

Also a new investor in Baltimore. I spent a lot of time working on a spreadsheet, triple checking the formulas, and have just been using that. It's one real estate spreadsheet, with a tab for the deal analysis, a tab for neighborhood analysis, and so on. I think it's organized, so I'm happy with that system. I also liked creating the formulas myself because it required me to understand the nuances. But I've always been a DIY person. If you feel you have too many spreadsheets, why not consolidate until you're happy? 

@Ozzy Sirimsi Haha, as soon as I reread that, I wanted to change the numbers, but it was too late to edit. I lived in a 3/1.5 in Fells for 2k (1600 sq ft), but next door was smaller (1400 sq ft), but nicer, a 2/2 that rented for $2400. 

My partner used to live in Mt Vernon and paid $600, but it was a small basement studio (not a 1/1 - my bad). That was definitely on the low side. I also used to live right in Charles Village (29th and Charles) in a 1/1 that I paid $600 for. But the landlord was a slumlord, so take that with a grain of salt...

Hi Micah, welcome to BP. You might not like this answer, but in my life, I've found that the best way to learn something is to try to research it myself first. I might be able to entirely learn the thing on my own with the power of the internet. But at the very least, I give myself the background to ask focused questions, as coming up with good questions is much more important (since it's easy to find answers). Can you tell I used to be a teacher?

Your question is vague. Baltimore is a great market for cash flow but has poor appreciation. Like any major city it has good areas and bad areas. Even as I try to answer your question I can't. It varies. A 1/1 in mount vernon will rent for 500-700. A 3/1.5 in Fells will rent for 2000. Spend some time on Zillow to look at the rental estimates to get an idea (those estimates are not very reliable, but they're something). There are many opportunities in Baltimore to cash flow positively, if that's what you're asking.

@Sam Lewis's comment. I would also suggest the attorney route and would recommend Jacob Rappaport.

Hi Puja, welcome to BP. I can only speak about Baltimore, that it is a strong cash-flowing market, but somewhat risky if you've never stepped foot in Baltimore. You would need a really excellent team to overcome that obstacle. 

If I were deciding between those 4 markets, I'd add those four words to my keywords at BiggerPockets and see what people are saying over the next couple of weeks. Each one has it's pros and cons. Pair down the list. If you really can't decide, you should overcome the analysis paralysis by just picking one - pick out of a hat if you need to. You can make Real Estate investing work in almost any market. Good luck =)

Agreed with what @Sam Lewis said. The rule of 5's is after PITI you should take into account 5% for vacancy, 5% for maintenance, and 5% for capex (replacing big ticket items). Another rule of thumb is half of your income goes to operating expenses (all expenses other than the mortgage). So just make sure you've factored that in.

But on the optimistic side, if you think of the 1% rule, you're well above that, with income of ~$800 for a 60k property. So perhaps your numbers are right (although I imagine $400/month cash flow is a bit optimistic. 

But you say "you just want to get your feet wet". I hear that and think "oh that's fair, he doesn't want to deal with a rehab", which is completely reasonable. But vacancy might not be your biggest issue. I'm making an assumption (because you haven't clarified) that you're not investing in the greatest neighborhood. Like @Stephen Kehoe said, you might have trouble finding a property manager. You may have trouble finding a quality tenant.

I don't mean to be negative, as I am making an assumption you're buying in a rough area, but your comment, "I want to get my feet wet" contradicts the nature of all the extra/hard work that goes into managing cheap properties in rough areas. Many people do this kind of work, but it's so easy to get burned. Best of luck =)