All Forum Posts by: Tina Tsysh

Look into Inland Empire. Areas like Corona and Ontario still have homes that are affordable, they do require some work though. Are you comfortable with doing a rehab?

If you want to go a safer route, have you considered any turn key properties? You can get cash flows by buying something out of state. 

Be prepared to learn a lot and make sure you have a great team in place! Your first deal might not be a homerun but the knowledge you gain will be worth 100 times more. 

Pros of buying new construction

- if a good builder, you don't have to deal with maintenance and repairs as often

- lower monthly cap-ex reserves

- as a buyer you get a lot of confessions from the builder

- new construction can typically get higher rents (if in the same neighborhood as a privately owned property)

Cons of buying new construction

- you are paying a premium 

- typically cash flows less than doing a value-add

Pros of buying a privately owned home

- can purchase at a significant discount

- higher risk higher return 

- typically cash flows more 

- can refinance sooner because of forced appreciation and use the equity on the next purchase

- learn a ton from doing your own renovations 

Cons of buying a privately owned home 

- a good deal can be tough to find 

- have to deal with repairs and maintenance

- higher monthly reserves for cap-ex 

- don't really know what's "behind the wall" until you start the renovation process

Some of your options are:

- get a co-signer for your lease who has a better credit score

- pay rent upfront, I would say 6 or even 12 months ahead 

- it might sound weird, but offer a collateral. When my mom had a tenant with poor credit score, he offered her a very nice watch (which she had to get appraised) but after the appraisal came in, the tenant officially moved in and she never had any issues with him

Best of luck! 

@Javier Rosales is there anything specific you would like to know? Do you think there’s something they’re not telling you?

There have been multiple guests on the RE podcast who said that getting cold feet is normal. A useful tactic in these situations is to make a list of possible things that can go wrong and write out a solution for each one of them. Also if you know any investors who are more experienced than you, you can ask them to take a look at the property to see if anything stands out.

In addition, if a seller commits misrepresentation of any material facts, you are protected by law and can solve the dispute in court (worst case scenario).

@Will Gaston when I was renting a house with 4 other girls sophomore year of college, we never saw our landlord. It doesn't have to management intensive if you can find a group of students that want to live together and be on one lease. At least that's how my experience went. Plus it was easier for our landlord since we were all friends and all girls. As long as you do your due diligence on potential tenants and don't run into "party" students :)

@Joseph DeConto for that you would typically get an umbrella insurance policy. Is there anything specific that you want to be insured against?

@Daniel Luedtke what is appreciation like in your market? Remember to always think long term. What might be a $20k profit today can turn into $100k in appreciation in a few years. Have you considered refinancing it instead to get your money out?

@Robert Henley is the property that you’re looking to buy new construction as well? I would get an appraiser out to look at the property because you don’t want to be overpaying for something that’s worth less.

There is nothing wrong with investing for just cash flow. Some investors are focused on appreciation whereas others are focused on cash flow. It all depends on your personal goals.

Typically with leverage you get higher returns on your money. Do you eventually want to refinance the house?

Typically commercial loans don't require tax returns for 2 years however in order to get commercial financing, a property has to have 5+ units in it. 

Have you considered partnering with someone whose income you can use to qualify for the mortgage?

Is having a co signer / borrower a possibility in your case?