WANT TO BUY OR SELL A PROPERTY?
We Answer Your Investing Questions!
BiggerPockets is a website and community of investors and agents to help each with investment strategies and give advice. BoiseTurnkey has an account on BiggerPockets, and we wanted to share the valuable information Corby has shared with investors when answering their investing questions.
Investing Questions About Multiple Properties
Question : Currently, I have 2 houses unimproved and one fully remodeled and ready for the market. What should my strategy be?
Answer:
“ I’d get a consult from a realtor doing lots of business in your area – they should have a solid handle on comps and what is, or is NOT, necessary for you to maximize your net.”
Question : “I was hoping to get some feedback on my goals to see if it is realistic and any changes you would recommend.
- Short term goal: I want to generate $600/month in cash flow by the end of 2022 in order to:
- work towards a longer-term goal of achieving financial freedom
- work towards a medium-term goal mentioned below
- Medium-term goal: I will generate $3000 cash flow by 2025 by being able to buy 10 rental properties in the $100-200K range in the Columbus and Tampa area.
Answer:
“ Welcome! I love the focus and how specific you are about your goals – you are much more organized than I have ever been!
You’ve asked a lot of questions, and you should, but I want to help you focus on a concept if you want to scale. Making the assumption that since you have $10-15K to start, you aren’t a high W2 wage earner. That gives you two options to start:
1. House hack locally with an FHA (MFH) or 5% conventional (SFH) – I know this is tough in Seattle, but it’s option #1, and you’ll get the best “jump start” by going this route.
2. Invest in higher cash flow areas like those you’ve mentioned above – BUT, the challenge is that unless you have the ability to save more down payments quickly, you won’t be able to scale in these markets. You’ll need to save another $20k or more every time you want to buy a new property.
People here on BP don’t really like hearing it, but if you don’t have a ton of cash and want to scale, you need to buy in growing areas that are rapidly appreciating. It’s the equity build-up that will help you buy more properties- cash flow won’t do it. If you find a market with reliable and aggressive appreciation and no rent controls, rents will rise aggressively, too – so excellent cash flow will follow, and you’ll be able to scale and ride the appreciation up as well.
Best of luck!”
Question : “I’m considering remotely self-managing 4 rentals and am seeking advice!”
Answer:
“Honestly- it’s not a good idea to try and manage remotely unless you have a full team set up of reliable contractors that know and trust you. Sure, the monthly savings is great until you have a problem. What if the tenant stops paying and doesn’t return your calls or emails? What if you get a call that the basement or crawl space is flooded? How do you vet contractors to know that they are actually doing the work that they are billing you for?
Search these pages, and they are full of people saving “big” money on property management, but they’re here begging for amatuer advice because they suddenly have a legal or financial problem that they have no idea how to handle (and most of the people on the boards here don’t either).
If you are local, you could probably make it work by getting referrals from friends and family for contractors, lawyers, etc. From a distance, a GOOD PM will be worth every penny when you actually need them.”
Investing Questions About Tenant
Question : I have a tenant who hasn’t paid rent, and the law in Oregon says if they applied for assistance, you can’t evict them for non-payment of rent. She has applied but hasn’t heard if it was approved or not. My dream home is available, and I got a pre-approval, and it’s under contract. Will the lending fall through because my tenant hasn’t paid, and the rental was factored into me qualifying for the new home?
Answer:
“You need to ask your lender – keep it hypothetical at first. Typically lenders want a copy of your lease and recent bank account statements – underwriters may or may not try to match up deposits with your leases.
That said – here in Idaho, we have applied for assistance on behalf of our tenants on more than one occasion, and the process has been really swift and simple. You might reach out to whoever is distributing those funds locally and ask about your tenant’s application. I don’t see why they wouldn’t share details and the timeline with you.”
Investing Questions About Buying Property
Question : “Are you buying off of the MLS?”
Answer:
“Absolutely. Deals come from all kinds of places. It’s silly for people to say that you HAVE to buy off-market; that shuts new investors down immediately. I’ve bought most of my portfolio off of the MLS.
95% of transactions happen on the MLS. It’s ridiculous to think every one of those is a bad deal.”
Question : “How would you recommend finding/marketing to the right buyer in this situation?”
Answer :
“Great question! I am sure your market has a few investor pages – you can start by just posting there and saying that you are working on bird-dogging and want contact for anyone interested in off-market deals – you’ll get lots of responses, mostly tire kickers, but some legit buyers.
The page in my market has tons of real investors and wholesalers selling their deals on the FB page pretty regularly.
Don’t forget to get out to some REI meetings and network!
That said, learn your market and negotiate good deals – if you do that, they’ll sell, no problem.”
Question : “How to gain traction in real estate?”
Answer : “Focus on one specific thing – investors or first-time home buyers, 1031 exchanges- market yourself and become an expert in that one thing. Every realtor loves to say they’re an expert in everything, and then they don’t do any transactions.”
Question : “Finding a great deal or building a cash buyers list?”
Answer : “This is a common concern for new wholesalers. The reality is, you don’t need a buyers list if you find GREAT deals. They’ll be knocking on your door, begging for more. Most wholesalers try to sell crappy deals, and they think the problem is their list – it’s not. Great deals sell themselves, and you’ll build relationships from there.”
If you need help investing in the Boise area, don’t hesitate to reach out to us and read our resources for investors here ! Read more of Corby’s responses here.
