All Forum Posts by: Taahir Shaikh

A whole lot of wisdom there, I really appreciate the insight Bruce and to your point, this home certainly gave me a different feeling than others I’ve put offers on with much more of a investment prop mindset. Who knows, it may be more long term than I think. 

Best and highest offer will be figured out by 9pm tonight so wish me luck! 

Hey BP Family,

Working with my Realtor right now to win my first bid (after 7 failed attempts) on a first time home. This property is in a great area for me in North Arlington (great schools, stones throw away from a huge community park, and close to I30), and the plan is to live in it for a year or so before renting it out (I’m sure I’ll be picking your brains when the time comes!).

We're working on what price to go in at, and I want to make a realllyyyy strong offer (the house has a lot of that romance factor), but there's a dilemma. The house is a 3b/2ba 1,895 sq ft home but an additional sunroom built in which brings sq ft up to 2,055 (based off tax records my agent found). The strange thing though, is that the MLS shows the home to be 1,895 sq ft even though the sunroom is heated and cooled, and attached to the house securely, with windows (this sunroom is an amazing add-on and in great alignment with the rest of the home compared to other sunroom mods I've seen). I asked my agent why the Sellers would downplay the property as only 1,895 sq ft and she said it looks like the current owners bought the house with the sunroom install, but could've later added the heating/cooling systems BUT, didn't go to the county to get it permitted/assessed to be added as true sq footage.

Essentially what I took away from her explanation was, a lot of owners don’t want to fool with the county on things like this if they don’t have to, which I can understand. But here I am, trying to put a really strong offer in on a home and I’m not sure if I should go in with the mindset that it’s a 3b/2ba 1,895 sq ft or a 4b/2ba 2,055 sq ft…

Seeing as I’m going to rent this one day, if I myself decide to get it assessed/permitted as square footage (which I don’t know how much of a pain it truly is), I ran some rent estimators online (RentCast.io) and the rental comp differences between those two scenarios is about $2,275/monthly vs. $2,600/monthly, which is huge!

Bottom line… I’d be willing to come in a few thousand dollars more on my offer if it means there’s future potential to earn that much extra in rent each month, and I’m not sure what to do. I have until Sunday 6pm to figure this out so any wisdom would be greatly appreciated!

Hey BP Family,

Working with my Realtor right now to win my first bid (after 7 failed attempts) on a first time home. This property is in a great area for me in North Arlington (great schools, stones throw away from a huge community park, and close to I30), and the plan is to live in it for a year or so before renting it out (I’m sure I’ll be picking your brains when the time comes!). 

We're working on what price to go in at, and I want to make a realllyyyy strong offer (the house has a lot of that romance factor), but there's a dilemma. The house is a 3b/2ba 1,895 sq ft home but an additional sunroom built in which brings sq ft up to 2,055 (based off tax records my agent found). The strange thing though, is that the MLS shows the home to be 1,895 sq ft even though the sunroom is heated and cooled, and attached to the house securely, with windows (this sunroom is an amazing add-on and in great alignment with the rest of the home compared to other sunroom mods I've seen). I asked my agent why the Sellers would downplay the property as only 1,895 sq ft and she said it looks like the current owners bought the house with the sunroom install, but could've later added the heating/cooling systems BUT, didn't go to the county to get it permitted/assessed to be added as true sq footage.

Essentially what I took away from her explanation was, a lot of owners don’t want to fool with the county on things like this if they don’t have to, which I can understand. But here I am, trying to put a really strong offer in on a home and I’m not sure if I should go in with the mindset that it’s a 3b/2ba 1,895 sq ft or a 4b/2ba 2,055 sq ft… 

Seeing as I’m going to rent this one day, if I myself decide to get it assessed/permitted as square footage (which I don’t know how much of a pain it truly is), I ran some rent estimators online (RentCast.io) and the rental comp differences between those two scenarios is about $2,275/monthly vs. $2,600/monthly, which is huge! 

Bottom line… I’d be willing to come in a few thousand dollars more on my offer if it means there’s future potential to earn that much extra in rent each month, and I’m not sure what to do. I have until Sunday 6pm to figure this out so any wisdom would be greatly appreciated! 

Hey BP family,

In the process of putting in offers for a SFH, with a primary residence loan. Will be my first ever home here in Dallas Fort Worth, but I've lived here all my life and feel that it's my competitive advantage knowing the ins and outs of a majority of the metroplex. My plan is to buy the home, live in it for a year, before renting it out. Standard 3/2, 1750-2,250 square feet.

I came across a website called Niche.com, and it tells you a little bit more about the demographics of an area, and one thing specifically it told me was about the percentage of people who rent/own in that zip code. This may be a really naive question, but it got me thinking, is it more attractive to a rent a home in an area where most of the surrounding area owns? Or via versa? 

Does it even matter at all? I saw a zip code where almost 85% of people (assuming the data was correct), owned their home and I just wondered if having a rental property in that neighborhood is a good idea. 

Thanks for any help on this! 

Quote from @Andrew Postell:

@Taahir Shaikh thanks for posting.  Always great to hear from a fellow Texan.  So, the question I would ask - would you give me $50 per month for 5 years to make $50,000?  If the answer is yes, then you are ok with negative cashflow. Read this post HERE about cashflow and let me know what you think.

Not just a fellow Texan, but a fellow Fort Worthian of almost 30 years! (I just say Dallas Fort Worth when addressing the crowd outside of DFW). 

Thanks for the link to the article by the way, very insightful! 

Quote from @V.G Jason:

Depends on your financial strength and the location of the property. If you're equipped to manage that financially and the property is solid in a really good area-- absolutely.

People spend $700/mo on a car note. Subsidizing a mortgage by $200/mo is nothing, the one's who make $200/mo aren't really making that. The cost of homeownership and the benefits of investing aren't in the meager cash flow, it's in the area you are buying. 

The $2400/annually being a deterrent is missing the forest for the trees. Think how this investment sits with you for 10 years +, I am assuming you're equipped with reserves, a PM, etc. 

If $200/mo is going to change your day to day life, then probably don't invest. The rent to buy spread is still super wide in Dallas, you're fine waiting. 

I greatly appreciate the analogy V.G.! 

Quote from @Randa Dehaan:

There’s a lot of details here that we can discuss further but I would say - yes this plan makes absolute sense! Think of your down payment money this way: you can either have it sit in a bank or have it sit in the equity of your house. One typically appreciates at a much quicker rate than keeping it in a savings account. Especially if you take into consideration the possibly for refinance if rates come down before or during the time you’d be going to rent it out and buy a new property for you and your future wife. Then those numbers could look very different. On top of that, rent typically continues to go up each year too. 
Congratulations by the way! 

Randa, thanks for the insight on ways the deal could make sense! 

Quote from @Kristin Flores-Brockman:

This is a very specific and personal situation and there is a lot to discuss here. Feel free to reach out so we can discuss some options and crunch some numbers.

I wouldn't take a loss like that for an investment property because ultimately you will be pouring more money in that house due to repairs and updates. I believe there are other solutions to this scenario, such as type of home and location of home. 

-Kristin

Kristin, thank you for the insight! 

Hello all,
New to the BP community and would love perspective on a situation I’m going through currently. 

Just got engaged and will most likely be getting married in about a year. I’m here in Dallas Fort Worth and have lived in the same house all 27 years of my life so I’m familiar with the metroplex. I’ve been able to stay with family this entire time while taking care of my mother but since the situation has changed at home now, I’m wanting to take the next year to live by myself ahead of marriage. I just got my prequal letter and have been shopping around for my first home. The plan, is to live in the home for the next year before I’m married and then buy another one a year from now for me and my future wife while I put this one up for rent.  

I’m leaving off some personal details but my question to the crowd would be, does it ever make sense to buy a home and rent it out at negative cash flow? 

I’m being conservative with my numbers to keep a cushion, but with a 10% DP, current interest rates, and rental comps in my area… when I go to rent out this house in a year, it may be operating at a $200 cash flow loss monthly compared to mortgage loan/prop taxes/insurance payments. 

This is my first home, and I’m trying to not let fear set me back in this market, so I’d appreciate any feedback y’all!