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Real Estate Advice - Rental apartments
Posted on 9/3/22 at 7:11 pm
Posted on 9/3/22 at 7:11 pm
I have never done any real estate. I have been thinking about buying apartments in BR. I want to rent them through property management.
For a newbie, what advice would you give? I'm not good with fixing things. What are somethings I need to consider?
I'm very timid when it comes to taking risks
For a newbie, what advice would you give? I'm not good with fixing things. What are somethings I need to consider?
I'm very timid when it comes to taking risks
This post was edited on 9/3/22 at 7:22 pm
7
Posted on 9/3/22 at 7:35 pm to glorymanutdtiger
Bro...start with SFHs. You will lose your arse if you've never owned rentals before
Posted on 9/3/22 at 7:48 pm to TheOcean
quote:
Bro...start with SFHs. You will lose your arse if you've never owned rentals before
If he has the capital to buy a complex vs a SFH I see that as less risk. I would much rather have 10 rentals than 1 rental to spread out the risk of any one property being a drain on resources.
Posted on 9/3/22 at 8:05 pm to glorymanutdtiger
From first hand experience my condo in BR cash flows better than any SFH I have. Granted it will never appreciate like a SFH
Posted on 9/3/22 at 8:31 pm to PolarPop5
I'm not talking whole complex but apartment condo. May be 1 or 2 to start with. It's scary since I never did it.
This post was edited on 9/3/22 at 8:34 pm
Posted on 9/3/22 at 8:32 pm to PolarPop5
Partner up with someone. Yes, you will get half the return, but half the risk. A mentor and partner on your first true commercial deal with make a huge difference. SFH and multi fam are two different beasts. Happy to answer any questions or give advice as I’ve been a commercial lender for 25 yrs. Lnobles@redstickcapital.com
Posted on 9/3/22 at 8:35 pm to glorymanutdtiger
quote:
I'm not talking whole complex but apartment condo
I am going to be looking at a duplex or 4 plex when we move. I want to take the cash out of my current home as a down payment for a new house and rental properties. What I don't want to start with is a SFH without a renter that I am paying all the expenses on, you spread out the risk of downtime the more properties you have.
Posted on 9/3/22 at 9:40 pm to glorymanutdtiger
Me and a buddy started with SFHs in Baker after the 2016 flood in 2017. You could buy them for $40k, put $15k into them and rent them for $900-$1k a month. Got 5 of those and 1 in Gardere area. Then bought 3 quads someone bought and let fall to shite off Brightside. Rent the 12 units for about $850. Bought an old SFH in Prairieville rent for $1300 and 2 DSLD new builds in Prairieville rent for $1500. Bought 2 triplexes near Sherwood. Rent for $850. Tenants in the Sherwood area were giving our property manager hell. Sold them for @$80k more than we bought them for to an investor from California. Seems to be a lot of out of state investors in BR market now. Sold Baker houses for @$500k also to an out of state investor. Couldn’t take advantage of equity without flood policies which were over $2k. Bought trailer park in Prairieville. Renovating and renting 30 trailers for @$900-$1k each. The SFHs in Baker definitely made us the best cash on cash return. But, the flood risk and inability to access our equity made us pull the plug and use the profits for down payment on the trailer park. The trailer park should be even better return-wise than the Baker SFHs. Will probably take us a year to get it fully cleaned up. Selling one of the DSLD new builds for $40k more than we paid for it a few years ago to have some more capital for fixing up the trailer park.
My partner deals with contractors and I deal with bookkeeping. We have a property manager we know and trust. If you’re timid, plan to outsource the management piece and find a manager with good contractor connections or else you’ll get eaten alive on both the income and expenses. It’s all math in the end. Don’t buy something that doesn’t cash flow based on dreams of appreciation or increasing rents. Multi family is good to smooth out the risk of having a shitty tenant which you will inevitably get.
My partner deals with contractors and I deal with bookkeeping. We have a property manager we know and trust. If you’re timid, plan to outsource the management piece and find a manager with good contractor connections or else you’ll get eaten alive on both the income and expenses. It’s all math in the end. Don’t buy something that doesn’t cash flow based on dreams of appreciation or increasing rents. Multi family is good to smooth out the risk of having a shitty tenant which you will inevitably get.
Posted on 9/3/22 at 10:56 pm to JABRO
Looks like finding a partner to start with is the way to go from the advices I received so far. That way we share the risk and reward. Also keep each other in check.
Posted on 9/4/22 at 8:29 am to glorymanutdtiger
Figure out your financing first or you might be chasing something you can't obtain.
Posted on 9/4/22 at 9:56 am to TheOcean
quote:
Bro...start with SFHs. You will lose your arse if you've never owned rentals before
Terrible advice. Multi family is the way to go. I never owned a SFH when I started and went straight to MF. Better margins, easier to scale, less time vacant, cheaper per door
Posted on 9/4/22 at 10:34 am to nugget
Terrible? I own many SFH and MFH. Easy to lose your arse in MHF when you don't know what you're doing like OP. We make a killing on both.
Posted on 9/4/22 at 1:48 pm to TheOcean
Posted on 9/4/22 at 2:32 pm to TheOcean
I can see no reason to own SFH unless you’re BRRR it and have none of your own money in it. If you think you’re killing it with SFH then you’re probably not really killing it with MFHs either.
Posted on 9/4/22 at 2:45 pm to Im4datigers
quote:
Happy to answer any questions or give advice as I’ve been a commercial lender for 25 yrs. Lnobles@redstickcapital.com
Do you do any type of $0 down 80% LTV loans. With additional collateral put up of course
Posted on 9/4/22 at 3:09 pm to BayouBengal23
quote:
Do you do any type of $0 down 80% LTV loans. With additional collateral put up of course
I mostly broker, but Depending on the collateral, the location and other things it’s possible that one of my local community banks would do it. Shoot me an email with the scenario and I’ll let you know what I think.
Posted on 9/5/22 at 10:23 am to glorymanutdtiger
Location...property inspection...rental history
Posted on 9/5/22 at 2:08 pm to JABRO
quote:
Bought trailer park in Prairieville
Wanna sell?
Posted on 9/7/22 at 10:07 am to BayouBengal23
BayouBengal23
I am community banker and I could definitely look at something like this and use other collateral to get something down with nothing down.
Let me know if you have any questions.
I am community banker and I could definitely look at something like this and use other collateral to get something down with nothing down.
Let me know if you have any questions.
Posted on 9/7/22 at 10:15 am to soupboy10
Email?
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