All Forum Posts by: Tom Shepard

@Scott Weaner 

I'm in Nashville and everything here seems really expensive. I'm new to REI so maybe I just don't know where to find the good deals...YET, but I'm learning every day.

Most of what I find doesnt even meet the 1% rule, let alone the 2% rule!

@Kimberly T. 

 Good points to remember, thanks.

We currently have a condo near a local college and we include the utilities (water, electric and sewer) in the rent to keep the students from having to try getting the utilities put in their name.  We have a clause that they get billed for anything over the lease amount at the end of the lease, or it is withheld from the security deposit if the end the lease.  So I know what you are talking about to a degree...good to remember!

Thanks everyone!  Great info -- @Michael Seeker -- sounds like you've had tons of experience in the MFH...hope you don't mind me picking your brain some more if thats the route we go!

Thanks again to all!

Thanks @Michael Seeker !

Great info for consideration.  So you know would the MFH in this scenario likely require a larger down payment %?  I am thinking 25% but don't know if the apartment would require more?

Hey @Rob Foglia !

Welcome to BP!  Glad to see you on here!

Considering multi-family investments. Wondering if calculations for MFH Are the same or different than for SFH. Specifically are there things that you have to consider further with say a 16 unit small apartment building than a SFH or if you bought 16 SFH? I realize the numbers would be bigger/different but are there addition costs to consider with multi-family or would the same formulas apply?

@Jeff Trayer 

As others have said, check the market and know your potential tenant pool.

One plus I didn't see mentioned, with the 2/1 you are less likely to get families with kids or at least more than 1 kid.  Kids can be hard on rental property.

my daughter and 2 friends rent a small 3/1 at their college -- 3 girls one bathroom and they get along fine.  They just signed another years lease, unfortunately right before I found a deal on a 2/1 just down the street.  Fortunately, my next youngest also goes to school there and she and two friends are going to take the 2/1, so not only share a bathroom but also two of them in 1 BR.  Of course they are moving out of a 2/1 dorm situation with 4 girls in it!  I don't think you'll have a problem at all.  Especially near a state school.  Now if you were near some fancy private school, that could be troublesome.

Welcome @Aaron Hafer !

On BP they call that house hacking and from what I have heard and read MANY in the BP community got their start that way.

Best of luck!  You are getting a great start and make some fantastic decisions at a young age!  

Also don't forget about the depreciation!  Cash flow is certainly the meat, but depreciation is the cheese.  That is where the government assumes that over time the property deteriorate and become less valuable.  Everything I have seen depreciates in a straight line over 27.5 years.  (Just the value of the structure, not the land)  With that you end up not paying taxes on much or sometimes ANY of the cash flow you generate, so that cash is worth more than what you might get if you got a $300 a month paycheck!  And then, if you're lucky and chose the right property at the right time in the right location, you might also get the icing on the cake:  appreciation in the value of the property!