Real Estate Investing/Development

Mofongo

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Biggerpockets.com
It's a forum full of real estate professionals and investors. There's so many different angles to this game.

Me personally, I buy multifamily houses and rent them. I also go to sheriff sales and try to look for forclosures as well. It largely depends on how much access to capital you have whether that's your savings, a loan/mortgage or investors.
If you're looking for immediate cashflow,real estate isn't the business for you.
Real estate is about building a portfolio of properties that appreciate in value while providing an income after investing a sizable amount of $$
I occasionally do flips but you have to be able to "carry the nut" until you find a buyer.

My advice would be to buy a duplex and rent 1 of the units while living in the other. You get the experience and headaches of being a landlord while living cheaply cause your rental income will largely take care of the mortgage.
That's how I got started. I bought a triplex,lived in 1, rented the other 2. The 2 units took care of the mortgage and most of the property tax. I started paying double payments after I got a raise at work and paid the mortgage off early. I refinanced and pulled out $100k and bought a foreclosure and rented that out as well and I've been building that as a side business ever since.
It takes a lot of $$ to get started but it's easy once you get rolling

Thats the path I want to take. BUT the big issue im having is figuring out the numbers and what would seem like a good investment as far as monthly/ yearly cash flow. Im looking at a property which after I ran the numbers its roughly $3000 cash flow a year after all expenses etc is paid, would that be considered a good rental property?
 

JBone4eva

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Thats the path I want to take. BUT the big issue im having is figuring out the numbers and what would seem like a good investment as far as monthly/ yearly cash flow. Im looking at a property which after I ran the numbers its roughly $3000 cash flow a year after all expenses etc is paid, would that be considered a good rental property?
This is where you're going to have to do some work and learn your market to find out what is a normal cash on cash return/yield. For the next 30-60 days I would look up duplexes (in your price range) in your area on the MLS and analyze a couple of them a day until you find out what the average return is for your asset class/price point.

You can either find what the cash on cash return percentage is, or make it simple like I did and just measure the difference between what the mortgage will be and what your expectant rent would be.

That's what I did when I was looking for my duplex, I analyzed duplexes in the market for a few months and found that the expected rents on average were $500-$800 more than the mortgage, which after taking out expenses like water/trash and savings like repairs/capital expenditures and vacancy the average cash on cash return/yield was about 4%-5% so I decided to look for an 8%-10% return. I ended finding a spot where the difference between mortgage and rent was about $1800 which was well above the avg. I liked the house so I made an offer. I ended up getting in a bidding war and paid over asking, but the difference after paying above asking was still a little over $1400 which was still well above the average in the area and gave an 8.5% yield first year so I jumped on it. That also included an inherited tenant that paid well under market avg rent so it should go up to about 12% which is what I was looking for.

I use rentometer.com to find what area average rents are for an area. You just type in the address and the bedroom/bathroom count and they'll give you the average rental rate within whatever radius you choose.

My situation was a bit different than yours because I bought the duplex as an investment property and not as an owner occupant house hack, but I honestly still analyze properties I plan on house hacking as investment properties (using 25% down, slightly higher interest rate etc.) because I know even if I house hack I will eventually move out and rent both units out.

Sorry for all the info, but I just want to illustrate where my head was at when I was analyzing, and what I think you should do.
 
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