All Forum Posts by: Thomas O'Donnell

1. Since I have a capital restriction and I don't have a good network of contractors, I tend to look for properties with minimal rehab and closer to turn key investment.

2. Knowing my limitation above, in order to be competitive, I look for properties that allows me to put a 15-20% downpayment for a conventional loan.

3. If I find properties with the above scenario, I am open to negative cash flow as long as the appreciation will cover it annually. For example, negative cash flow of $5k on first year, but conservative appreciation rate of 4% amounts to $20k will more than cover it.

4. I also can afford a year or two of negative cash flows, but knowing that it will start to cash flow afterwards. Considering as well, appreciation will make this a stronger investment as time passes.

If I find properties that fit my scenarios above, then I reach out to my realtor to see if we can proceed with the deal. I am still fine tuning my strategy of course, but hope that helps!

I wish you nothing but the best on your journey! Thanks for sharing this. You have a pretty good system for yourself I see. Yeah I am leaning more towards cosmetic rehabs at the moment as opposed to full ones.

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When initially analyzing a deal to see if it is a good one, what are the first things you look for? What are the quick indicators that turn you away? Or the ones that immediately spark a further deep dive? I'm just curious as to what indicators other investors love to use when purchasing a rental property to help them more quickly get to the answer of "Is it worth more of my time".

Thank you to all who respond to this post! Your input is always very appreciated!

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Quote from @Nicholas L.:

@Thomas O'Donnell this is a very personal question, and so I am not going to tell you what to do. I'll just say this... real estate isn't going anywhere. So if you rent for a year or two... you'll be in a much stronger financial position, and you'll be much more familiar with the market. Renting is a fantastic deal in the short term. No closing costs, no interest! When your lease is up... you move out and on to the next thing. And it might take you 60 or 90 days or even longer to find your house hack. Good luck!

Thank you for the input! Definitely can be an option.

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San Antonio, Texas

Quote from @Jon Kelly:

@Thomas O'Donnell there's a lot going on here...

Your main question is stocks vs. real estate. Since this happens to be a real estate networking site, most people will suggest real estate over stocks. I agree.

You already answered the question. "I want more than anything to begin this journey..." Then you should use all means necessary to buy real estate. What is $9k in stocks going to get you? Not much. With an owner occupied property you can put 5%, so use $15k to purchase a $300k property.

I would continue to save as much as possible. You'll need some reserves when owning a property. Ideally you find a slightly distressed property and you can add some sweat equity to add value to the property. You'll need some cash to improve the property.

I wouldn't be too concerned about trying to time the market with rising rates or prices. You're at the beginning of your journey so this shouldn't be too much of a concern. Even if you overpay on your first deal, the experience and knowledge you'll gain is worth 10x more than an extra 1% on an interest rate.

Awesome take here! Thank you! I will most likely be selling my stock portfolio if needed, and only keeping about 20% of it (my Apple average/shares are too good to sell). I will also be getting a property with my partner, so she would most likely be going halves on the down payment as well.

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San Antonio, Texas

I currently do not have any properties, but I am planning on getting my first soon. However, have you thought about maybe investing in somewhere other than NY? and spreading that $300k accross multiple properties in the same market? Such as buying long distance where you buy in FL or TX and set up a team? For example, I currently live in CA where it is crazy expensive like NY but I know a couple people here that invest in Tampa, FL because it is way cheaper. Instead of using $300k for a down payment on one property I would suggest looking into multiple properties, or just buying one smaller one at first to learn the ropes of RE investing/property management, and once you feel you have that experience and knowledge, then go cash crazy into more properties. But like I said, I'm a newbie, this is just food for thought.

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New York City, New York

Quote from @Mya Toohey:

@Thomas O'Donnell

My Tampa Florida market is hot like Texas!!! If you have the ability to afford it. Why not. You only live once!!! I hear Austin is pretty amazing.

TRUE! We really only do live once. I need to stop worrying so much and like Nike, "JUST DO IT!". I know once I get a place and move in/start managing, it will be a lot better. It is just the whole getting started part that can be very intimidating when you have no previous experience. But you learn from mistakes and going through the process.

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San Jose, California

Quote from @Guy Gimenez:

You should seriously look at San Antonio, which in my opinion provides a greater value because Austin is so outrageously priced. I've invested in both San Antonio and Austin and my sights are still on San Antonio due to prices and growth potential.

Thank you for this insight! That's pretty much how I've been feeling. It seems that San Antonio is able to expand more than Austin geographically, and it is for sure a bit cheaper but still seeing that great population and job growth.

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San Jose, California

Quote from @Alecia Loveless:

@Thomas O'Donnell Hello. Personally I had a Crypto portfolio and a stock portfolio about the size you are talking about and I needed some money for an investment. The majority of my crypto was in really long term plays so I decided to sell that and hold the stocks.

If I were you I would keep the stocks and build up your cash with your job and overtime as you shouldn't need as much with an FHA loan.

Both the San Antonio and Austin markets are hot currently so perhaps if your situation allows for it when you move maybe you could rent something for 6 months in whichever place you decide upon and allow yourself to become more familiar with the neighborhoods to decide where you might like to live and find a good one that’s up and coming and less expensive.

Thanks for the response! I haven't really thought about living there first. I'm just worried that moving and then renting would push my time to get started out and then I'd be spending alot on rent so I would not be able to save up too much. I do plan to visit San Antonio/Austin this summer or fall though for a week to get a feel of both places. I've spoke to a couple awesome agents on BiggerPockets who would be willing to show me around a bit too so that helps!

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San Antonio, Texas

Hello all, I currently plan on house-hacking my first property within the next year or as soon as I can. I will be moving to either Austin or San Antonio, depending on which is a better fit. I am currently working overtime to try and save up capital needed to move and get started on a FHA loan. I have pretty good credit for my age (740+), and can transfer with my job if needed. The current problem I am facing is having the required capital. At the moment I have a stock portfolio worth $9k, and I have $2k in cash.

Question: Should I sell my stock portfolio when the time comes so I can use that money to put towards a down payment on FHA loan? Or should I keep my portfolio separate and just keep saving up cash?

My fear is I do not want to wait too long to get started, as rates keep rising as well as prices. I've spent the last year educating myself on real estate investing and how to use it to obtain financial freedom. I want more than anything to begin this journey and live the life we all deserve! Any advice or input is greatly appreciated! Thank you all!

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San Antonio, Texas

Quote from @Jordan Moorhead:

@Thomas O'Donnell we'd love to help! Typically a lender is ok with it as long as you're going to live in it. We have some lender referrals you could also talk to

Yes I do plan on living in it! I really want to get started, I'm just lacking a bit on capital for the down payment at the moment.

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San Jose, California

All Forum Posts by: Thomas O'Donnell

Thomas O'Donnell has started 92 posts and replied 230 times.

Post: Is the deal worth it, or not?

Post: Is the deal worth it, or not?

Post: Need Some Financial Advice for Starting!

Post: Need Some Financial Advice for Starting!

Post: Multifamily first deal goal advise

Post: Relocating for a House Hack!

Post: Relocating for a House Hack!

Post: Need Some Financial Advice for Starting!

Post: Need Some Financial Advice for Starting!

Post: Looking for Austin & San Antonio, TX Agents