All Forum Posts by: Tim Delaney

The restaurant going under is definitely the biggest risk. And it could take even longer than 6-12 months to find a replacement depending on the area.

The other things to look at carefully are major Capex or maintenance expenses - you didn't mention whether this was a NNN lease. If it's not then maintenance can easily eat away at your returns. Even if it is NNN, are their certain Capex items that you are responsible for? Not sure on the building size or whether it has a flat roof, but I paid over $80K to get a 10k sq ft flat roof done back in 2021, with quotes as hight as $120K.

Hope this helps, good luck!

The loans are not taxable, but first you need to build the equity in the homes in order to take out the loans. And yes, the income from renting is still taxable, but ideally you are offsetting a chunk of that with depreciation which is a non-cash expense.

You should read Amanda Han and Matt MacFarland's books as well which are available in the BP Bookstore. https://store.biggerpockets.com/products/tax-strategies-book...

Congrats on getting started! I'll share my thoughts on a few of your points:

1. The 1% "rule" is not a rule, it was a simple guideline that was supposed to help do a quick initial vetting of a deal. Before the 1% "rule" there was the 2% "rule" that then got reduced as the market changed. Focus on a market you like for those macro reasons then focus on finding a deal that works for you.

2. Boots on the ground is very valuable. I can't comment on either of those markets other than saying that.

3. I don't invest OOS, but if I did then convenience of getting there would be top on my list. Even comparing Provo to NC in terms of flight duration and cost even though both have direct flights would be a huge factor for me. I'd probably also look at markets that had multiple direct flights form SFO everyday for even more convenience. That shouldn't be your number one criteria though.

4. I think it depends on whether you have someone that you can trust in that market. PMs cost a lot so if you can find a way to do it without them then great. But there is some risk if you are not around. Also, keep in mind that some markets have a requirement that landlords have a locally registered agent (manager).

5. This is dependent on your personal situation and strategy. Personally I would not take a negative cash flow deal. I don't like to gamble on rent appreciation. Expenses are going up just as fast as rent anyway. And interest rates probably aren't coming back down anytime soon. I have done some deals that barely have a little positive cash flow in neighborhoods that I know very well and know that the house should appreciate well and that I will have no problem always finding great tenants.

Hope all this helps.

Rent is rent. I've never heard of a lender that wouldn't count Section 8 payments as income. If anything they are even more reliable. I've done refis with section 8 tenants in the units from traditional banks and dscr lenders.

Overall the best way to start learning is listening to podcasts and reading books. Then start analyzing deals so you get comfortable with that process. You should also pick a market - I think BP has a tool for that. I live in Buffalo, NY and invest here mostly in LTR BRRRRs and flips. NY isn’t the best state for landlords, but if you screen tenants well it isn’t all that bad.

Once you pick a market find a rockstar agent. They will be able to help you with estimating ARV and rents. Just make sure they know what they are doing. Find a contractor to help with repairs estimates or read J Scott's book on Estimating Rehab Expenses.

Good luck getting started! Hope this helps a little

The best way to get experience is to do the thing. For real estate just start analyzing as many deals as you can so you get more comfortable and confident. Listen to podcasts, read books, and if you plan to invest in the Netherlands find some resources that speak to that market specifically.

Listen to as many podcasts as you can and attend all of your local meetups to connect with other investors.

I think it’s definitely worth looking into. Is there a market you have anyone that you trust that would be willing to help you out in a pinch? You also may need to start with more capital so you are prepared for unexpected situations.

 Yes, as far as my non-lawyer understanding of the laws read, it doesn't matter that there is an end date in the lease, you still need to provide proper notice if you are not going to renew it. And the timing of that notice is important. You may actually have it worse in NYC as opposed to the rest of the state, make sure you look up the exact laws and/or speak with a lawyer. Maybe the section 8 person can help advise you, but I'm certain they will give a disclaimer with anything they say that you still need to consult your own lawyer or read the rules.

 You must have helpful Section 8 agencies - anytime I've talked to the tenant's caseworker about issues they just say "not my concern".