All Forum Posts by: Wes Franco

Hello! I've never purchased a home and have identified a few homes for sale in a market that I would like to start building a rental portfolio in. When I tour the properties/work with the realtor, what questions should I be asking to confirm that it's a deal worth going for? I've already looked at rents in the area for similar properties via Zillow, etc.. to determine a realistic revenue stream. I would imagine confirming the last time repairs were done to the roof, last time a new water heater was installed, if it's tenant occupied, what they're paying currently...

So far all I know is that the cap rate and COC return is favorable based on my rudimentary estimates, but I want to know what else it comes down to.

So, what questions should I be asking these realtors regarding rental properties?

Any insight is greatly appreciated!

Thank you all for the replies! It sounds like my best move might be to get a multi-unit or a large single family and rent out a room/the other unit. Investing out of town may work but I'm not sure that would be a good idea for my first time. The kicker is finding the right deal that makes sense. I know there are formulas out there and methods that different folks use.

Regardless of what I do the deal needs to be the right one. I'm going to look around the site and will be attending tomorrow's event on this topic. 

In the meantime, if anyone has any techniques they use that work well, I am all ears!!

Thank you all.

Hello! I joined BiggerPockets today and look forward to networking and finding my way to time, location and financial freedom! I HAVE NEVER OWNED A HOME. Primary or rental.

Here is my current situation:

I'm 27 years old and live in San Diego, CA. I am extremely eager to start building equity and constructing a real estate portfolio, however home prices, in California especially, are at an all-time high. The way I see it, here are my general options:

1. Purchase a duplex in San Diego and live in one unit - PROS: essentially get help paying my mortgage via rental income, proximity to rental property, maximizing FHA loan on a more expensive property (maximizing my down payment in a low interest rt environment) CONS: The market is so unbelievably expensive and rents are not comparatively high enough to really make most moves profitable, high Debt to Income ratio thereby limiting my ability to purchase again

2. Purchase a single family home and live in it in SD - PROS: lower debt to income ratio, potentially lower payment even without rental income. CONS: Market is high, No rental income, not maximizing the FHA loan dp requirement of 3.5%

3. Purchase an investment property in a more affordable market. PROS: invest in an area with a higher rent to home price ratio to maximize profitability CONS: No FHA loan as the creditor would know that it's not my primary (higher DP), greater expense associated with upkeep as I would need to fly and pay for lodging to work on property

4. Buy a foreclosure - PROS: cheaper CONS: seems risky

5. Wait - PROS: buy low CONS: Impossible to time (usually)

I greatly appreciate any advice that the community can give me. I know that any one of these could potentially work with the right deal, but I'd rather do some outreach than take a shot in the dark.

Gratefully,

Wes