All Forum Posts by: William Sing

Hi @Felix Lilly,

Your approach to buying your first property in the Vancouver WA area is a great start, especially with your interest in an FHA loan for its lower down payment requirement. Vancouver does tend to be more landlord-friendly, which could work in your favor. However, finding a single-family home (SFH) with existing tenants who are open to an owner moving in might be a bit challenging. It would probably be easier to buy the property and then rent out the rooms accordingly. Most tenants who rent a home are not looking for roommates. It's often a delicate balance between comfort and profitability when it comes to owner-occupied properties.

Renting out rooms, as you're considering, is indeed on the more profitable end, especially if you manage to secure a 3-4 bedroom property. If you're open to a bit of creativity and local regulations permit, converting additional spaces like garages into rooms can further enhance your rental income.

Overall, your strategy has a good direction. Just weigh the pros and cons. It might also be worth looking at STRs or using the new 5% multifamily loan. Best of luck on your journey to becoming a homeowner and a landlord!

Let me know if you have any other questions!

Hey @Ryan McKenney,

Welcome to the investor community! It's great to hear about your enthusiasm and plans for diving into real estate investment. Your strategy of accumulating properties, even while preferring to rent personally, is an interesting one and definitely has its merits depending on your long-term goals and market conditions.

Regarding your question about down payments, it's true that the landscape of real estate investing has evolved, and strategies that were prevalent a few years ago might not be as beneficial today. It's all about balancing your financial flexibility, risk tolerance, and investment goals.

Putting down 5% as a first-time homebuyer can certainly free up capital for other investments or expenses. However, it's important to consider the trade-offs, such as higher monthly mortgage payments and the cost of PMI, if applicable. While you mentioned understanding the implications of a lower rate and no PMI, here are some questions and considerations that might help you make a more informed decision:

1. Cash Flow Considerations: How does the choice between a 5% and 20% down payment impact your monthly cash flow? Would the additional cash freed up by a lower down payment provide significant opportunities for other investments?
2. Interest Rate Impact: Have you calculated the long-term cost implications of the interest rate difference between putting down 5% and 20%? Sometimes, a lower down payment can lead to a slightly higher interest rate.
3. Market Conditions: How do current market conditions in your target investment areas influence your decision? In a highly competitive market, a larger down payment might make your offer more attractive to sellers.
4. Investment Diversification: If you opt for a lower down payment and invest the remaining capital, what are your targeted returns on those investments? Are they significantly higher than the cost of mortgage interest?
5. Risk Tolerance: How comfortable are you with the level of debt and the monthly obligations associated with a smaller down payment? It's crucial to assess your risk tolerance and ensure you're comfortable with your leverage level.
6. Future Plans: Given your uncertainty about where you'll be in the next 2-3 years, how does this affect your investment timeline and strategy? Are you looking at these properties as long-term investments, or are you considering potential exits in the near term?

It's commendable that you're looking to take advantage of the first-time homebuyer opportunity. Just ensure that your decision aligns with a broader financial strategy and your comfort with the associated risks and commitments.

If you'd like to discuss this further or need help analyzing specific scenarios, feel free to reach out. I'm here to help!

Best of luck on your investment journey!

Hey Larry, a little bit of feedback here:

- Rent seems really high. Is this supposed to be a short term rental or something like that? That is the only reason I'd see a house in Parkrose area going for that high rent wise. 

- I'd have a bit more aggressive expense increase (at least 3%) and property values in the Portland Metro, specifically SFH tend to be closer to the 5-7% depending on the area.

- Depending on how much work it needs, you may be able to get some of the closing costs covered. For this price, I'd think it would be closer to the 8-10k range to be on the safe side. 

Let me know if you need more clarifications!

Hi there! Probably connecting with FB ads and other things that would be helpful. Potentially also connect it to manychat depending on where leads are coming in. 

Hey Tony! Thought I'd throw my hat into the ring. Here is some questions to be asking if you aren't already. 

What is your experience with being an Agent?
How do you do walk-throughs?
How do you run the numbers?

Where would/do you invest in this market? Why?
Do you work with out-of-state investors?
How do you save investors money?
How do you like to communicate? Frequency?
Who are your prefered vendors?

Feel free to message me if you'd like to dive more into it on how analyzing numbers and such and what to be looking for. 

Hey Larry, congrats on at least analyzing!

Usually I like to use rentometer.com to get a rough ballpark of what the rents will be. Usually if the property is in good shape I use the lower of the average/median to run numbers. From there I would start using zillow and other sources to see what a similar place and rent would be. Usually that is when you get under contract and have the inspection period. 

If you are trying to use the 1% rule or something similar to what you mentioned, there will probably be nothing on market in Portland that is close to that as a heads up. Portland is much more of an equity market and unless you are putting a lot more down, cashflow will be something that will happen once rents appreciate more. 

As for accounting for costs, usually I recommend people for these smaller units just have the tenant pay for utilities. Helps eliminate variable costs as well. Most of the time electricity, water & sewer, and garbage is going to be something the tenant can pay. 

You are also not putting anything for mortgage insurance? That along with the property insurance seem really low. Vacancy is closer to 4-6% in the Portland area. I agree that repairs are a little low along with capex. One thing to consider later on is property management as well once you get closer to the 8-10 units it typically makes more financial sense. 

If you need any help with the Portland Market let me know!

Hey Calvin, 

I think this may need a bit more context to better understand the whole house. If you are looking to sell, this probably will not be a huge dealbreaker for a lot of buyers depending on where you are at. Depending on the area and style of the home it may be better to do carpet on the stairs or using paint. Overall, the painting will most likely be cheaper but I'm not as much of a fan of it unless it goes with the aesthetic of the rest of the house. I'd talk to your agent a bit more to see if it is even worth doing so that way you don't spend a ton of money/time on something that won't provide much of a return. 

Hey Caroline! Interesting request. For the most part this would be similar to a long term rental. If it is for a retirement home type with medical assistance then you will need to jump through a couple hoops usually with the state/federal level in terms of paperwork. Your place may also need to be updated to comply with ADA standards which may or may not get expensive depending on the layout of everything. Do you have more info on what the proposal is or is anything in writing?

Hey @Travis Lee

It's awesome that you've decided to dive into real estate investing. Cash-on-cash return (COC) is indeed an important metric, but the expected COC can vary based on your location and the type of property you're eyeing.

In some metro areas, especially on the west coast, COC returns might be lower due to higher property prices. In such cases, you might want to consider Return on Equity (ROE) as well, which takes into account the appreciation of your property over time.

Generally, aiming to beat inflation is a good rule of thumb. So, on the lower end, a 4% COC might be acceptable, but for better deals, you'd want to start at 6-7%, especially in metro areas.

If you happen to come across a deal offering a whopping 15-20% COC, especially on your first deal and not through off-market channels, it's a good idea to double-check your numbers. While it sounds fantastic, such returns might raise some red flags. Also, if you're putting down a low initial investment, it could lead to a lower COC.

Remember, each market is unique, and factors like location, property type, and your financing strategy will impact your COC. I recommend talking to local investors and what their buy box would be or COC they'd want. Keep analyzing deals and fine-tuning your approach as you gain more experience!

Hey @Victor Carvajal, I totally understand your frustration. It's important to find an agent who's knowledgeable about VA loans and can effectively communicate their benefits to sellers and listing agents. VA loans are a fantastic option for veterans, and you're absolutely right that more agents should be well-versed in them but not all agents are created equal.

When it comes to making your offer more appealing, I usually am educating the listing agent and the seller about the advantages of VA loans and how they are not as bad as they used to be. Having a lender to back up these claims is also super helpful.

You're not asking too much to expect an agent who understands VA loans, especially given your service. If you need some connections just let me know. Are you looking at a single family or multifamily as well? Many agents are not as familiar with investment properties as well.