All Forum Posts by: Walker Hinshaw

I definitely think it is 5 to 10 years out and the existing apartment buildings will have to struggle, but if you could pack a bunch of people into the same sq. ft. and charge them an amount they could actually afford, I think it could be a surprisingly good business model. Upkeep and general management would take a lot more work though.

@Scott Trench

It would be interesting to try your dorm style affordable housing idea if some of these new apartments fail and are forced to find a way out. The demand for affordable places to live is obviously high and there does not seem to be any help on the horizon, especially near downtown.

@Bill S.

 Do you have any ideas on how people could position themselves to take advantage of the overbuilding of apartments focused on young professionals that seem to be taking place downtown?

I was thinking that if rents drop on those buildings that renting a unit and turning it into a vacation rental may be an option but do you have any ideas on a bigger scale? What will happen if these apartments can't sustain themselves?

@Andrew Emery

 Congratulations on sticking with your principles. If the seller tried to hide this, who knows what else they are hiding. Good luck finding your next deal!

For those who have not read it already and are still looking for their first deal, I suggest reading @Scott Trench's article "An Easy, Slow, Low Risk, High Reward Way to Buy Your First Investment Property" which he wrote for Bigger Pockets and then got featured on Time.com

http://www.biggerpockets.com/renewsblog/2015/02/21...

In fact, I suggest you read his entire lineup of articles. Many of them are written specifically for young investors and may be extremely helpful for you in laying the groundwork if your main goal is to lay make lots of money.

I am 23 and purchased my first property, a duplex, at the end of 2013 with a business partner. My partner and I are currently house-hacking the duplex with hopes of buying more in the future. Because the market in my area is so hot right now, as it seems to be in most top 50 US cities, I am currently looking into alternate strategies besides my original plan of buy and holding in my area.

As a 20-something without a family, I believe my single best unfair advantage is to buy properties as an owner occupier from sites like hompath, homesteps, and hudhomestore that do not let investors bid on properties until owner occupiers have had a chance to bid on them without competition. I look at these websites every day with the hopes of finding another suitable property. The problem is, with prices headed up, the foreclosures that feed these websites inventory are rare.

In the meantime, I am looking into flipping or even doing a scrape and spec build due to some third party connections I have made with the expertise to help walk me through the process. I am also looking at investing outside of my local area in places where there is still cashflow in buy and hold property deals.

@Account Closed, if it were me I would go ahead and get it done because it doesn't cost much in the scheme of things and could save you thousands. 

For another way to look at your first investment if you are willing to house-hack, check out @Scott Trench's article on the subject. http://www.biggerpockets.com/renewsblog/2015/02/21...

It may help your confidence (and your experience) to buy your first property like this even if you are not going to cashflow on the deal.

Will I make it too difficult on myself having my first property out of town?

My main worry with buying a property out of town would be getting to know the area well enough to know the good deals from the bad ones. Sometimes just a couple blocks can make a big difference.

If you don't want to take care of a property that is further away, just factor in the cost of property management (usually between 7% and 12%) when running your numbers. In fact, I suggest you do this even if you plan on managing the property yourself so if circumstances change you can pay a property manager and still cashflow.

For another way to look at your first investment if you are willing to house-hack, check out @sco

I will make a personal visit to the property once every month. Would this be sufficient?

This should be more than sufficient if you have a decent property manager.

I have been receiving links to websites or memorandums showing gross rents and estimated expenses from the real estate agents. Can these number actually be trusted? How can I verify the rents and expenses they are telling me are honest and accurate?

Always verify the numbers for yourself. What websites are they sending you to? Some of the websites I have heard of people using to determine market rents include rentometer.com, rentrange.com, hotpads.com, zillow.com, and craigslist. As far as the expenses, use the BP buy & hold calculator (http://www.biggerpockets.com/buy-and-hold-calculat...) to make sure they are accounting for all of your possible expenses and run the numbers. Look in the forums for estimates of any costs you cannot estimate on your own. You may have to call a few people such as an insurance agent in order to get a true idea of what some of the expenses listed in the calculator will cost you because they are determined on an extremely case by case basis.

Once I make an offer and have a quadplex under contract, what is my way out if I look deeper into the property and determine this is not the investment for me?

You walk away and lose any money you put in escrow.

How difficult is it to sell a quadplex?

If it is not cashflowing then it could be pretty tough. If it is cashflowing, you will be able to find someone to take it off your hands.

@Janet Taylor

I personally think that of the options you presented, number 2 would be your safest long term strategy. It provides you with consistent, relatively safe cashflow for years to come and allows you to build up the capital to do your next deal while you improve your credit score.