We bought our current primary (making our old primary into a rental) right when interest rates were starting to climb (Mar 2022) in Austin. We paid close to $800k at 4% for a 50 year old cottage with solid bones in a walkable sought-after area, 1000 sq ft, 3/2.

It appraised for $680k, we paid the difference in cash (bid over by $130k, and only won the bid by $1k against 15 offers, some were cash), and if we sold today we would probably get right around $680k.

Our plan is to buy a new primary and turn this into a rental in about a year, maybe 18 months.

We obviously aren’t thrilled it’s worth 100k less than it was - but I’ve been thinking lately, this could actually work out better!

Whenever we sell, we will owe less in capital gains since we bought in higher, and we paid the premium to get the house while rates were low (we got outbid many times and saw them go from 3.5-4 in a couple weeks) - so we will save overall in operating costs since we got such a low rate compared to today.

Obviously rates could drop, and I hope they do for others (and us as we look for our next deal), and that would erode the opportunity cost of buying today for less and refi’ing.

Curious if anyone else thinks about their property the same way - or thinks about this differently …

ETA 2: Just looked at total payment over 30 years for my situation vs 100k less in purchase price at 7% - and my situation will cost $250k less overall

So pretty clear this will work in my favor assuming I hold the home 20+ years which we planned for before we even submitted the offer

Hi there! I wanted to give a rough outline of my rental plan and see if it makes sense to the experts here. I don't want to step on any landmines.

Last year I bought my first house (4 bed, 2 bath) for 350k at 6.99 percent. I've been throwing money at it to pay it down like the house is on fire and the only thing that puts out flames is cash. Next year I'll have the loan down to 150k owed, where I plan to recast (unless refinance rates come down. Am not counting on that, though).

That should bring the monthly payment to 997 per month with about 300 added for property tax + insurance.

From there, I plan to rent out my first house, buy a second home to live in, and repeat the process. There may be a year delay while I gather up a healthy down payment for a second house + start an emergency fund for the rental house in case of vacancies.

Rental comps in my area are 2100-2400, and I plan to use a property management place, which I estimate at 10% of the rent.

According to my numbers, bare minimum I'll be getting 600 dollars a month in profit for the rental.

It feels... a little too simple? Is there anything that I'm missing? Also, how much do people usually have put aside for house emergencies like vacancies and such?

Hello everyone,

I recently found a property that I think would make a really good flip. Except it is located on the edge of the developmental and in flood zone AE.

Originally I thought being on the outskirts with no visable back yard neighbor would actually make the home more valuable, however I likely have to subtract for this turning away some buyers. No signs of the property ever experiencing flood damage.

How would you factor this in when comping properties?

Edit: my realitor is suggesting I take the monthy flood insurance cost $200, and subtract the cost from their potential buying power. E.g. that is about $30k in purchasing power. So take off $30k from what I would expect to get.

With properties appreciating heavily over the past 5+ years, I find myself with a large amount of equity that I am not leveraging. I can 1031 the property, increase my leverage, and raise my annual depreciation, but the current interest rate environment is unfavorable. At the same time, I must compare my present cash-on-cash return and ROI against outright selling and investing in stocks if buying again isn't worthwhile.

• Do you regularly review your present CoC, ROI, CAP rate etc.. by inputting current values of your property?
• What are some thresholds that make you want to sell?
• Are you going to wait until rates are lower to refinance or pull lines of credit?

For my identical properties combined, my CoC is 6.66%, ROI is 9.15%, CAP rate is 6.19%, and LTV is 53%. If I sold today, after closing costs, capital gains, and income taxes, I would need almost a 13% ROI from the new investment. My ROI assumes inflation and appreciation are a wash in the short term. I have 10 years before I need to refinance these properties that average to a low 3.375% interest rate.

I'm going to sit on these properties for now but I am curious how others approach this. Any other angles I am missing?

Looking for someone to settle the debate. Should one try to involve a RE attorney for unearthing liens on a foreclosure or can a title companies supply all this information? Is there added value in hiring an attorney BEFORE having purchased a foreclosed property?

From time to time I like looking at cities rent vs house prices. This time I did KC. I was very surprised to see that it would be a good investment, even with the current interest rates, and having a property management, I would still make a profit every month.

Am I overlooking something?

Are there markets where you can buy a move in ready SFH for 300k and rent it out for 3k? Rents have risen rapidly in my area people seem pretty squeezed at ~2k for a townhome that would sell for 350 - 400. From what I’ve read here it seems more out of balance in H/VHCOL areas where monthly rents are significantly cheaper than PITI on an equivalent place.

What kind of markets and what type of structures are renting out for 1% of purchase price ?

We found a 5 acre wooded property near us that we love. It contains an abandoned, unsalvageable, crumbling house. The owner left about 10 years ago. She has over $10,000 in unpaid taxes, and her property just officially went into default with foreclosure pending. The neighbor has sent her countless letters, unanswered. The county has sent her numerous certified letters, which she has signed, but never responded to.

This is as much a psychology question as a real estate question. Would it be worth driving to her current home 6 hours away to present her an in person offer to buy her house? The property will be auctioned off in 3-4 months, leaving her with no profit. I could offer to pay her approximately $15K in back taxes and court fees and maybe another $10K on top of that just to have her sign the property over to me. The property would be worth $50K+, though there will be demolition and trash hauling costs to me before building a new home.

I don't understand her backstory or current condition, but she is alive and has just last month signed, (but ignored), a certified letter. She may be embarrassed or ashamed of abandoning the property and not paying taxes, but why would she turn down a chance to have someone come in and make it easy to pay it all off and remove the problem from her shoulders? Does anyone think that it's worth a shot? If I wait for it to go into foreclosure, I fear I may lose the auction if it becomes too expensive.

Selling a property that I have flipped. Comps are in the 330-360k range and we have the nicest one in the neighborhood. Redfin agent wants to list it for $335k because she thinks the house is too small to command the $350k that we want. Her reason for the low price: “the market will drive the price up if it’s actually worth more. You can’t underprice homes anymore” - thoughts?

Purchased 2 separate condos last year and both advertised a community swimming pool with photos in the listings. The first unit's pool was already permanently closed for 3 years before the unit was listed. The second unit's pool was opened when I bought it last summer, but was not opened this year because the HOA decided it was too expensive.

Do I have any recourse or is it an "oh well" situation? The pool was a big selling point for my tenants and they are obviously disappointed they can't use them now.

We are about to put an offer in on our 2nd SFH. Normally, I am very sure about the numbers I offer as I grew up with a contractor so understand the cost and time requirements for repairs and I do a ton of research regarding the local markets. When we got started with our first rental, we offered what I would concern reasonable offers. We had some back and forth but ultimately a deal could not be reached. I kept my eye on the properties and they sold for my original offer price or less.

Finally we got a good deal on a SFH, rehabbed it, and got it rented. Now we are on to the second one and I can't seem to get a number on it.

Here are the details: 2 bedroom/1bathroom SFH in a very desirable neighborhood. Rehab estimation is 30k - floors, counters, doors, paint, gutters, plus odds and ends; there are some concerns with an addition as the floor is really high at one end. Current price is 235k with 2 price drops in the 7 days it has been on the market and the owner is motivated to sell quickly. Big fenced in yard with a HUGE shop in the back.

With this list, I would normally offer 195k, due to size and repairs but it almost seems like an insult for the localtion as I have seen house on this block go for almost 300k. Im willing to negotiate up to 210 but that is as high as I can go and still make it cash flow.

What would you offer?

Is it just the same as far as getting a conventional, FHA, basic loans available? Or is there anything different when off market?

I’m familiar with hard money loans, but don’t know what other financing opting there are for private sales. Basically there’s a flip I’d like to pursue as I have come across someone looking to make an off market sale and want to be aware of what that process may look like.

Hi all,

I am about to put a house on the market that I have run as a successful STR in a vacation area for 4 years. I have found a number of Facebook groups where people list STR businesses. Where have people found success advertising these kinds of sales, if they do not want to engage a realtor?

The house is turnkey. I might be feeling a little sentimental about it, but I think we have done well because we used it as a true family home, but self-managed it with care and an eye towards a well-designed and thoughtful experience. It would make me happy to find a buyer who would also actually use the house.

I'm ready to buy my 2nd rental property having had great luck with my 1st in Las Vegas. In 2015, I bought a 2bd in Spring Valley for $150k and it's doubled. Beautiful gated community, responsible tenants and excellent property manager and $1500/mth. I'm not bothered by anything and that's exactly what I want to duplicate. I'm worried that I've been spoiled and getting anxious. Any recs where?

I apologize if this question has been beaten to death on this sub.

My basic questions-

1. Is 50k enough to get started? I live in LCOL area in the midwest. There are SFH for 100-150k. Duplexes for 150-200k, etc.

2. Is bigger pockets pro worth the cost? Their calculators seem helpful, along with lawyer approved lease agreements, etc.

3. My concern is never taking the leap to get into real estate. It seems like the market is moving faster than I can save money

For reference, I have a very stable 100k job, early 30s with well funded retirement accounts. No debt outside of my primary residence. Downside is I don't know much about real estate other than listening to podcasts (How to Money, ChooseFI, BiggerPockets). Everyone says the first deal is the hardest/most stressful but half the posts on this sub say "the market is terrible, don't do it".

I work full time and was looking for a low barrier of entry into re investment. I was able to buy 2 condos in the last 5 years that I’m currently breaking even on each month. New builds, low effort, minor maintenance here and there.

In this market it seems cash flowing is not possible unless you want to rehab, invest a good amount of time and cash, etc.

Are the glory days gone? What strategies are some of you executing on?

Like the title says, should we be protesting our property taxes every year even if we somewhat agree with the appraised value? There also seems to be companies that would protest for you and their fee is a portion of the taxes they could potentially save, so seems like a risk-free opportunity.

Hey everyone,

My partner and I are thrilled about the prospect of diving into real estate investing, and we're open to various opportunities beyond just condos. Whether it's a renovation project, a foreclosure, an apartment, or a house, we're eager to explore all avenues.

We have a substantial lump sum of money, exceeding $90K, which would cover not only our down payment but also associated costs for the property. We're keen on exploring joint options and would deeply appreciate your guidance on navigating this process, particularly considering our credit situations. My partner has little to no credit history, while my credit score sits in the 550s.

We're also open to any other financing options or strategies that could help us get our foot in the door with real estate investing. Your expertise and insights would be immensely valuable to us as we embark on this exciting journey. Looking forward to hearing your thoughts and advice.

Couldn’t find any posts like this so I was wondering for those of you who have been through the process what are some things you could have done to save time and money. Or anything you would recommend someone getting started should do?

I have a tenant who came in through a program and required them to pay weekly. They are off the program and I want to switch to monthly. I would prefer that as well, but I am having trouble figuring out a payment plan to switch. Any advice?

In another subeditor, a real estate agent said Fully depreciated asset means investors will need to divest.

Full comment

" Former Realtor here.
The market is not going to crash; the crash that happened in '09 came from more or less the exact opposite of the factors we're seeing in play now. I can break it down if you'd like, but without getting too far into it, the market will eventually hit its limits and swing the other way (there's only so much buying power available in a given market), but such things take time. Maximally, we've got 10 years before the first major wave of the generation holding the most real estate will... no longer have earthly need of it. More urgently, rental investments made pre-quarantine will fully depreciate in 2027, which means that a lot of investors will need to divest by then; it'll only be about a 10% boost to inventory, but anything is better than what we've got now, and that might be all that the market needs to encourage people to relocate. In the interim, new home construction is slowly picking up now that supply lines are straightening themselves out, and NJ recently passed some legislation to further incentivize affordable housing. It's going to be slow, but it will get better. "

I asked what they meant by that and they said:

Federal deductions for rental income are designed to encourage residential landlords to only hold on to their properties for eight years; certain incentives and write-offs expire after that point.

The idea is that the landlord keeps the property until the write-offs are no longer any good, at which point they sell off the property (preferably to an owner occupant) and then, in order to avoid capital gains tax, use the proceeds to buy another house, fix it up, and then rent that one out. It’s eight years because that’s the average time for a relocation cycle in the US.
So if a rental property was bought in 2019, the (not insignificant) write-offs for depreciation of the property will expire in 2027, at which point, it will be wiser from a tax and income standpoint to divest of the property and reinvest the money in other properties (yes, even with the fees involved) than to hold on to it.

Is this true?

Hi everyone I’m a new inventory and finally landed a property and a tenant; however not really sure what to do with profits now and as we grow profits then, should I put them in the market? We don’t need the profits for the foresable future

Hello, I am in the process of potentially purchasing a mixed-use property that I have been renting (business unit) for a long time. Long story short, I had given the owner an offer to purchase the property and was told that the offer was very good (accurate) for current rental rates however their family realtor told them that the current rents are too low and should be much higher.

The property is currently generating around $5400 per month in gross rental income. They countered with a much higher 37.5%~ price on the potential listing based on a PROJECTED gross rental income of $7100 ~ per month.

My main questions are as follows:

1. Is it SOP to list a property based on potential rental income or only current rental income? If it is not SOP, then is there anyway I can use this information to counter offer?

2. As the property is a mixed use (business + 2 residential units above) how would you go about valuing the property? Is it comp based or income based?

3. The property would most likely need some renovations to bring it up to current market rental rates. Would that be a potential way to counter offer?

Lastly, my main concern is if the property goes to market rather than privately sold to me that there would/could be a bidding war. I have a first right of refusal baked into the lease but I am afraid that the listing would potentially generate a lot of bidding and be priced out of the purchase. How best to protect my business in the event that I can not purchase the property?

Any additional information would be greatly appreciated. Thank you for your help!

I am a part time real estate investor (own a triplex I rent) with a W-2 job. I basically hate everything about my W-2 job except Mentoring employees.

I’d like to go into real estate full time in some capacity and wondering if there is a way I could leverage mentoring/coaching to pivot my career full time into real estate? Thoughts?

I have a good friend that is getting amicably divorced.

He bought a home 3 years ago with his wife near Pittsburgh.

Home was worth $250k at time of purchase and is now worth $350k. He put down 10% and paid for all closing costs, made the mortgage payments, his wife only wants $15k to buy her out.

Most importantly he is the only person on the loan.

He has left his higher paying job making 6 figures since buying the place to work at a lower paying job. He doesn’t have the cash to buy her out. I recommended he look into a HELOC.

I also would be open to buy out 25%-50% of his existing equity to become a part owner, primarily because he has a sweet low interest rate.

After this, he would rent out one of the rooms in the house. Or he would move into his parents and we’d rent the entire home.

With mortgage payments being around $1500, we could rent it out for $2300-2400 and cash flow 800-900 a month.

I already own two rental properties solo, and like the idea of getting another property without:

-closing costs

-low interest loan & leverage without being named on the loan, just would be added to the title

-I have a high household income and networth, so can afford risk and buy the home with cash if situation ever arose where I needed to do so

Any thoughts on this? Good move or bad? What would you recommend on designing the partnership docs since this would be my first joint ownership? Particularly curious if anyone recommends paperwork templates for a minority ownership

Many years ago I purchased a vacant lot in rural California with an ex-gf for speculative purposes. We used both of our money to pay cash but only I was on title. We are civil with one another and though we have broken up, I always agreed to pay her out half of the proceeds.

We are thinking about selling it next year, and though I will speak to an attorney/tax advisor before then, how would we handle the capital gains taxes due at sale?

Would I pay her at close from the proceeds and would the title company give us each an equal 1099? Or do I need to declare all the income myself and pay taxes on it (since it is only in my name) and then give her half of my post-tax proceeds? We have never had a mortgage on the property and I pay nominal taxes/she pays about an equal amount for landscaping upkeep every year.

Thanks for any insight.

We are moving up to a larger house. Current one we bought for 350k in 2016, could sell for 550k. Currently owe 270k at 2.625 for 28.5 more years. We pay 2300 a mont and can rent for 3200 a month. Big hesitation is we have a pool. Pool/yard maintenance puts us at about 2400k all in for the year. Is it worth it to keep for the 800 monthly cash flow versus the liability of having a renter with pool? In case we are underestimating potentially rent, what cash flow would you find worth while for this added liability?

I have acquired some land just outside of Indianapolis and am looking at different options for it. Seeking some expertise from any fellow Hoosiers here. What cost per SF should I be assuming on a 4 unit apartment building? 12 unit apartment building? A 20 unit apartment building?

What is a good source to get a good estimate for something like this? Reddit gotta be as good a place as any!

Thank you in advance!

So here’s the story. It’s time for me to buy my first home. I am able to pull the full 50k loan out of my 401k and I am able to pull an additional 11k out of my pension for part of a down payment. I have 27k in a savings. Meaning I have 88k to put down without pulling from my main account.

Doing the home search for multi family, there really isn’t much within a reasonable drive from my work and in a decent area. There are a few small multi family for sale that I am going to look at this weekend with a realtor, who is also the lender. I have also found a 6 unit property that is for sale by owner because he is retiring for only 450k.

My question is what are the primary difference I would face between a residential loan and a commercial loan.

And what route would you choose if this were you?

I could pay the mortgage on both the commercial loan and the Res loan with just my W2 job. Let’s say all of the properties break even at the end of the day. Would you choose the 6 unit or a small multi family.

A general 30,000 ft overview.

Primary SFH appraised at $2.5M Bought for $1.8M 3.0% mortgage, 1.4M remaining Meets 2/5 rule

Mortgage/taxes/insurance are about $9500 monthly.

Currently makes $15k/mo as an Airbnb in a regulated area (aka I don’t anticipate rules changing much). Probably could make 12-13k as a LTR, but it’s a more transient area.

It’s generally an appreciating market, but I have some worries about the surrounding area and dealing with crime.

What does the crowd think? The goal would be to free up money to purchase and renovate a larger home. Thanks!