All Forum Posts by: Tatum Littleton

Great question James and I think all the replies are helpful and would tend to agree with them! 

As for numbers, taxes, comps, insurance, maintenance, etc. I don't have much to add other than running numbers from a few different standpoints such as, realistic, and very conservative, to what seems like may be a stretch, I like it because you get a range of numbers and if none of them work, it answers a lot of questions, if some work you may have to do more research or be creative in other areas such as financing or strategy. Real Estate Rookie by Ashley Kehr does a good job of painting a very clear picture of that as well as other fundamental ideas, it is very basic but does a good job of overviewing all of REI.

Also, the Ultimate Beginner's Guide is a nice, quick explanation of different aspects where you can find something you're more interested in and explore that further. 

Also, keep asking questions! 

As you have probably read, there are no perfect answers and I hope you find your answer through accumulating knowledge and bits from everyone's different contributions (the great thing about the forums). But I would agree it probably isn't the best to pay down the mortgage although you absolutely could if your ultimate goal was to be relieved of that debt ASAP and if it is, then do that! 

However, if you're fine (it seems like you are) making the payment and cash flowing, keep it where it is, and YES! at least put that profit into a high-yield, savings account. Save it and use it when you need it for something unexpected. There are plenty of options and so many are just beginning for you to put money in an account and have such a low barrier to entry, so why not do it?

Maybe you want to update the appliances or another part of the property, do that! Or maybe you want to take someone out on a special dinner and celebrate, do that! (Something not mentioned enough here)

What I want to say is, is it's up to you, it's your profit! All of these recommendations are just that, opinions and recommendations, you know what would be best for you and it is great to get different ideas. Keep it up and I hope you've got some ideas. 

Hey Jenny, there are quite a few areas around Dallas and Fort Worth that are great for long-term rentals. The suburbs and cities surrounding Dallas proper have great opportunities for cash flow as well as appreciation. 

AJ is right about the property taxes but is possible! So doing your due diligence is needed but north of Dallas is growing quite a bit and would maybe recommend looking more into those areas as Dallas as a whole is vast and maybe honing in on one area is a bit more manageable as you are out of state. There are plenty of opportunities to be had and if you can make it work, do it and jump into out of state investing! 

There are pros and cons of course, but it's up to you depending on how much you do or don't want to do. If you want as little hands-on as possible, turnkey is obviously the way to go BUT you can still sell/get rid of furniture you don't like and make some small changes. You can also see numbers for how well (or not well) it has done and decide on that and maybe what you can keep doing or do even better. As you mentioned, you will pay a bit more but it may be a great deal doing no work and can get visitors asap. 

Again, it depends on what you want to do and it seems like you have already had some good thoughts and thought it through. Take all the opinions and figure out which ones work for you! Good luck!

I agree with a lot of what Corby mentioned, if you are willing and able to make $300 negative cashflow work and believe it is a strong appreciation then maybe go for it. But if all you are looking at is the appreciation then getting that negative cashflow may be a bit more detrimental than you anticipate. 

A good deal is relative to everyone on this site... though many will see the negative $300 and tell you to walk away immediately. But maybe you can be a bit more creative than LTR, such as STR or MTR. Or possibly another route that Corby threw out there. The way things are currently, we have to be creative and look in the hard to find places. So, maybe this isn't the best play or maybe you can deal with it for now and you come out on top after refinancing. This one takes a bit of work to make the numbers make sense, maybe it will, maybe it won't.

I hope this helped and got you thinking a bit more! 

I would agree with the above responses, go for it if you are able and you and your family would still be well off after the purchase. The way the market is now and with so few buyers as well as it being an off-market property (relatively no competition) if you can swing it and will help your portfolio grow, I would do it! A lot of people are still worried because of rates and uncertainty and generally would advise against buying anything now but with REI, if you can do it and it makes sense financially make it happen now rather than later and possibly miss out on it completely.

Great to hear you're looking into investing soon! 

1. From everything I have heard/read, Ohio in general is a good and affordable place to be if you want to invest in the midwest, infact it seems quite a bit of the region makes sense. So maybe you can be a bit picky and go where you want instead of really need to because of money.

2. While you are in school still, just be smart about your expenses and be frugal. Enjoy college and don't completely miss all the opportunities... just be smart set a budget and stick to it. I would have a high-yield savings account if you don't already and just let that grow in the meantime. Seller finance might make sense depending on what kind of property you want and what kind of strategy you are looking to do. Obviously, you're income will weigh into that as well.

3. Use the calculators on BP and log them all, compare them, and run the numbers in every way possible from realistic to worst case scenario and that will get you a clearer picture of what will work. I would recommend (as will a lot of others) beginning by house hacking, it's the best way to learn how to own a property, manage and save money. 

4. In regards to my last sentence in #3, you wouldn't need a property manager. But if you buy a property you won't be in, you will just need to contact all that you can and ask about their services and costs and have a conversation with them. No real secret way to do that. 

5. Sorry... I would not consider myself a pro midwest investor LOL but if you are ever interested in Texas, I would love to help out!

I hope this helped and got you thinking about other things. Keep up the good work!

In short, I would put down as much as I can, and what would potentially cashflow in the future when you move out. From the information you gave, it seems you have analyzed that to what could potentially work. If you can put more down but be uncomfortable for a bit and get ahead, then I can see that making sense as well. It may mean you don't invest 50% like you mentioned but the refinanced mortgage will be more advantageous and likely to cash flow. 

All in all, you know what you and your wife are okay doing to make it work. Of course, there is not a perfect right or wrong answer, it depends on what makes sense for you. 

You can use paper applications but those can easily be lost or destroyed and just difficult to handle with all the moving parts of having a tenant. I would use a website for that and do it electronically. There are plenty of websites where you can fill everything out and email it to them and it will notify you when it is all signed. I would recommend using Zillow, RentRedi, or LegalZoom. Some are paid and some are free, it's up to you. 

As it has been said, there are plenty of ways to be "successful" in real estate investing and it looks different for all of us depending on our goals. Maybe, you love your normal job and look for extra income to help you travel or buy things for yourself/loved ones or donate, or whatever but it's different for you. Answer that, what does success look like to you? How will REI get you there?

Also, cashflow is so heavily talked about and held so highly that if it doesn't cashflow, forget it, but I come back to success looks different for each of us, you may just want to supplement paying for your housing by having a multifamily and only paying $500 of the mortgage instead of $2,500, that's $2,000 more you can do whatever with, save it or spend it how you want, all while still doing your day to day job. That may very well be a success for you and that's AWESOME, because it fits your version of success... not what someone on the forums says is success.

That's the beauty of REI, it isn't a one-size-fits-all but instead, it can be tailored to you and what your goals are. I'll get off my soapbox now and let you explore and continue to learn and analyze deals that work for you! Good luck!