All Forum Posts by: Trevor Martin

Hi all, noob looking for a little advice:

I'm 20 years old, first truly got interested in real estate investing in January of this year, and made my first SFR purchase in late February. Since then, I have made two more SFR purchases under the wing of a mentor (details below). They have been all-cash purchases so far, and my reserves are getting low. I probably have enough to buy one more home outright before I'll have to look into financing.

My question is for you seasoned investors; should I continue pushing on and being aggressive? Or should I scale back a bit and see how things pan out over the next few months? I'm currently looking at a couple SFRs, as well as possible getting into a ~10 unit multifamily with my mentor.

I've always been one to be aggressive and go after a new passion to the best of my ability, but at the same time, it's scary to see all of this cash tied up into real estate, and possibly look at getting into debt (albeit good debt).

My current holdings:
Single Family Home #1 (owned outright)
Purchase Price: $73,000
Rent/mo: $950
50% rule monthly cash flow (15 yr @ 2.8%): $78/mo
*Purchased this home before I knew of the 50% rule. Also, it is very updated in terms of big-ticket items.

Single Family Home #2 (owned outright)
Purchase Price: $62,000
Immediate Reno: $4,000
Rent/mo: $950
50% rule monthly cash flow (15 yr @ 2.8%): $137/mo

Single Family Home #3 (owned outright)
Purchase Price: $79,000
Rent/mo $1100
50% rule monthly cash flow (15 yr @ 2.8%): $120/mo
*Furnace, Water Heater, Roof, Siding, Flooring are all new in this property.

Should I continue expansion and possibly look into borrowing since the market is right? Or would you advise slowing down a bit to make sure there are no major hiccups as a young/inexperienced investor?

Thanks for your input!

Additional income from sale commissions certainly won't hurt!

Also, the license will provide you with plenty of other benefits; access to the MLS, being able to make offers yourself, talk directly with sellers' agents, etc. etc.

Good luck!

Hi all,

I currently own three SFRs and I'm always looking to add more, but one of the most challenging aspects is determining how much rent a property will pull in. I wanted to share a site I've found very useful for quickly assessing rental rates; it's not mine, I am not affiliated in any way, I just use it a lot!

http://www.rentometer.com

Obviously you need to do more diligent research when looking at a rental, but this is a great tool to get a quick guesstimate when looking into a property.

Do any of you guys have special techniques in assessing potential rents?

Jim M. This is another big plus. I've had my eye on an apartment building over the past month or so, so I could sell this flip tax-free and use that $145k as a down payment if the seller will come down to my terms

Every area is different; it's hard to tell whether or not this is a worthwhile improvement in yours. Look at some comps in the neighborhood, both 4/1.5 and 3/2.5, and try to determine if the added value will surpass the remodeling costs.

Personally, I would prefer the 3/2.5, but it's your buyers/renters that matter :)

Thank you Ned Carey Bryan Hennen Brad Friesen Peter Moser Jerry W. Ryan Moses David Krulac Jon Klaus Alexander Stafford, all of your input is very appreciated.

I think I'm going to go with a flip and use that cash to purchase a couple buy-and-holds that cash flow a little better.. or maybe even another flip! While flipping is something I'm new to, it's good to diversify and get out of your comfort zone.

Thanks again!

Hi all, curious to see what you think I should do with this deal:

Price: $49,000
Renovations Est: $44,000
ARV: ~$145,000
Projected Rent: $1,000/mo

What would you do with this property? Fix and hold or fix and sell? Is there a way to evaluate what would be more beneficial?

As a note: I got started in RE investing three months ago and currently have three single family properties. I am always looking to add more to my portfolio, but I have also had an interest in getting into flipping. I'm leaning towards flipping this home in order to have quite a bit of cash for my next purchase, but don't want to pass up a super cash-flow positive property at the same time.

Thanks,
Trevor

Jon Holdman You're right, it would definitely be a better deal if I managed it myself, but that's not an option at the moment. I have a full-time job I need to focus on.

When that job dies off in a few years (as I expect it to), I plan on managing my properties full time. In the mean time, I'd like to build a small portfolio. My other two SFRs were paid in cash, as will this one. When I start to manage full time, I plan to refi on that equity and quickly expand.

Do you think it's worth picking up/holding on to for the time being?

Hi all,

I'm looking to add my third SFR to my portfolio. I'm looking for some help in my analysis to make sure it's a good deal:

Asking price: $85,000 (paying cash - may refi later to buy more properties)
Taxes (2012): $1690
Expected rent: $950/mo

Now it may not look like such a great deal there, but where a lot of the value in the home comes from is it's recent rehabbing. New roof (tear off), furnace, water heater, central air, siding, gutters, downspouts, waterline, driveway, and flooring/paint.

I wouldn't have to touch this home in terms of big-ticket maintenance in 20+ years, plus it cashflows positive:

$11,400 yearly income
-$1690 tax
-$840 insurance
-$912 property management
-$6336 30yr @ 3.5%
__________________________
$1622 net annual income

Is this a good deal? I realize there may be better cashflow deals out there, but with the included upgrades, I feel as if this is a go.

Thoughts? :)

EDIT: If you aren't keen on this deal as-is, what price do you think would make it a good deal? I believe the sellers are pretty motivated.

I didn't even consider all of those advantages- seems like a no-brainer.