All Forum Posts by: Tim Youse

 
Financing costs depend on your loan, interest rate and how much you put down. If you want to avoid PMI, then you need to put 20% down, so $20k (plus closing costs) on a $100k property, then your mortgage will be your principle, interest, taxes and insurance - which depends on the property, so maybe around $500/mo for that. Most people will budget in 1 month of vacancy per year in their analysis, so that's 8% of your annual expenses.

I'm from Baltimore, but my wife grew up outside of Erie so I occasionally check out the RE market up there and the prices seem pretty reasonable. What property types seem to be the best for rentals up there? SFH or MF? I wouldn't mind getting a 4 unit, but I'd be afraid there would be more turnover in that type of property, making it a little tough to manage from out of town.

@Chris Mentch if you don't mind sharing, could you tell me how much you paid from the property and how much its renting for? I've checked asking rent rates on Zillow and hotpads, but those aren't always accurate

@Karl B. Are you self managing remotely or using a PM? 

@Robert Dartnell Good luck with your investment group. I checked facebook for one but the only one I found for Erie had just two members. The local Baltimore REI groups are pretty active. Part of the reason I'm considering Erie is due to the fact that SO many people are coming from out of town to invest in Baltimore that it's really driving up prices in desirable areas - and I don't really want to invest in the hood just for cashflow, although I have considered it.

Sam - if you join meetup.com and checkout the BWI group, you might want to go to their Monday Mixer event as it's basically a big happy hour with other investors. 

Welcome Sam. I checked out your website. Your projects look awesome!

Keep analyzing properties each day and you'll find it gets easier and easier and you'll get better at finding out which properties are actually deals based on the ROI.

Come out to the REIA meet-ups too. I had been reluctant, but I finally decided to go and have been to 3 in the last week. Highly recommend them. Once you sign up for the REIAs you'll be included on the wholesalers deals that get mailed out each day. I'd also recommend joining local REI groups on Facebook.

I'm still in the research phase like you, trying to decide which areas I'd like to invest in and trying to decide if I want to invest in areas with higher crime for greater cash flow. I'm also trying to decide if I want to start with a turnkey property or try out the BRRRR method.

My next goal is to attend a local auction to see if better deals can be found there vs buying distressed REO properties off the MLS.

Figured I'd bring this thread back from the dead and update it with some numbers:

Purchase price in 2006: 158k, 5% down ($5k of that was a 0% interest down payment assistance "loan")

House is located in Hillen off Loch Raven Blvd, south of Argonne (near Original Northwood)

Appraised in Nov 2016 for $133k. 

Remaining mortgage balance: $128k at 5.5% / $5K at 0% - this is a conventional loan, so no FHA refi or streamline refi has been possible

Monthly PITI: $314, $613, $220, $79

PMI: $26

Total monthly payment (PITI+PMI): $1252

I'm hoping to get market rent for around $1500/mo, which is typical for my area. I had to PMs check out the place and one recommended $1500 and the other $1450. 

The house does have a detached garage so I *could* explore renting that out separately for $100 - $150 mo.

The numbers for the P/I on the BP calculator are $100 off so the chart is misleading, so my $6 cash flow will be morel like (-$94) and that's with me self managing.

So my what are my possible exit strategies? I am in a position where I could take the financial hit of selling or holding, although looking to minimize the loses.

A) Hold on and rent - wait for the principle to come down in a few years and sell?

B) Sell now and take a hit? Probably look into a FSBO or flat fee listing agent.

C) Would a Lease Option make sense here? Are realtors needed for a LO?

Just to update a previous post. I did not close on the Catonsville house I put an offer in back Novermber, so I'm currently living in this property.

Still looking for my first deal as I learn the ropes, but have a question.

First a little background - I'm in the Baltimore market looking at 80 year old, 1300 sq/ft, 3/2/1 brick townhouses in an area where ARVs range from $150k - $200k. It seems that rehabbers are purchasing typically around $55k +/- $10k.

So in my search I've come across several homes "below $55k" (the reserve price is $10k) that are going to be auctioned and these houses are ones that someone has already started rehabbing. New HVAC/ducting, drywall, windows, walls removed, etc. I've also noticed that in several of these examples, there seems to be water damage in the basement from leaky walls - lower sections of drywall are removed, puddles, moldy insulation, etc...(this is typical for this area and I know many homes, including mine, have sump pumps and french drains to resolve the issues)

Are situations like these good buying opportunities, or ones to be avoided, and what would cause someone to walk away from a rehab - lack of funds? unexpected costs?

Get on emailing lists from local wholesalers. My inbox gets hit with dozens a day. Join local REIA groups on facebook and meetup and you'll have access to local wholesalers and if you're looking for specific property types in specific areas, let them know.

If you can pick up a set of refurbished SS appliances for a decent price, that might be the way to go.

I don't know the market in CA, but in Baltimore, I would pass on that deal since it's not too hard here to beat the 2% rule.

Definitely take advantage of the Rental Calculator here to analyze the deals so you can easily visualize the tweaks in the math (increase in rent, lower purchase price, self-manage etc)