Looking to get my first rental property this year, very helpful advice. Great tips on how you built your portfolio and managed your self. Been interested in real estate investing for a while and so glad I found Bigger Pockets.
Very interesting podcast. This is my first time hearing about bigger pockets. Interested in the 1% rule that was mentioned earlier on in the podcast. That's a new concept for me. Living in Southern California I was trying to run the numbers in my head and don't see how it could work (in this market). So if I buy a condo for 365k, am I supposed to get collect rent of 3,650/month for the 1% to work? I would be lucky to get 2,200 in this market. Or is the 1% on the loan amount and not the total purchase price? I'm wondering if this is a concept more suitable for the suburbs of Dallas than beach communities in Southern California?
+NaProbablyNot In ANY market, you can find opportunities within an hour or so drive that should meet the 1% - 2% rule. We know that to be true in San Francisco, NY, and Los Angeles. Listen to other episodes of our podcast - www.biggerpockets.com/podcast and you'll hear investors in these markets doing cashflow deals. Thanks for the message.
+NaProbablyNot You need to understand that the 1% and 2% rule are good rules of thumb, but it really depends upon your price point and other factors. The main reason you hear many people saying they need 2% is because they're purchasing very low cost properties (below $100,000) and since the cost of "bricks and sticks" as Ben Leybovich would say is the same all across the U.S. you need to have a higher amount of rent to cover the same costs on making repairs regardless of the cost of purchase. The higher you go in your purchase price I think the 1% rule is something you should try to figure out how you can achieve, either from the get go or from adding value. And yes that means if you purchase for $300,000 you're getting $3,000 per month in rent. Regardless of your mortgage. This can be done in any large market, but you have to figure out a way to make it happen.
This depressed me. It pointed out that real estate is all about timing. A year of hunting for deals and nothing comes close to 1%. I have two duplexes and 1 sfh. Prices keep going up and rents do not. What’s the answer? Save money and hope for economic tragedy?
Great info. You guys can also go to *OnlineNetCareer .Com* if you're trying to make money online. This is what I've been doing and I'm happy with my results......
So for a owner occupant multi unit property do you literally live for free and loose the income or is there a way to pay yourself rent and have some creative way to write it off at the close of the tax year????
A lot of good points here but some bad ones too. You should never have tenants fix anything. Let's say they "fix" a faulty electrical socket and your building burns down. What do you think they're going to say? The landlord told me to fix the small stuff! Also, what if the tenant has work done and never pays the contractor and he puts a mechanic's lien on your property? A mechanic's lien takes number one position on your property, not a mortgage. How will your bank like that? Never mind the time you'll spend in court to prevent the contractor from foreclosing on the property! You'll just end up paying the contractor anyway and the price might not be what you'll want to pay. Also, never have the tenants pay your water/sewer bill, a bill your responsible for. Instead, just raise the rent to cover it. Finally, how do you not know what happens if a tenant dies on your property? You should be prepared for anything as a landlord.
+CTLawInfo My lease covers how and which repairs can be taken care of, as well as who can do them. Any repairs necessary must be reported to the landlord and if you think we don't follow up on making sure things were done the right way , as well as making sure any vendors are paid (so no mechanic's liens are filed) you're mistaken. Even if we do have to pay the bill the lease specifies that this will be considered additional rent, therefore making it the tenant's responsibility. The point of making a tenant responsible for repairs it to make them actually understand their actions have consequences. As for the water bill, it may be a landlord's responsibility to provide that in your state however it other's not so much. Every state is different. If your units are separately metered, like I have, the tenants set up the accounts directly with the water company. I'm very glad that's the case because I've seen other landlords with water bills on a single unit in the hundreds of dollars. When they passed the bill onto their tenant that water usage sure did drop more than 75%. Guess they were glad they listened to me. The tenant not so much because now suddenly they had to be responsible. The sewer bill comes from the local municipality of which we pay and then get reimbursed from the tenant. And lastly, since the podcast aired I now have an entire section in my lease on what should happen in case a tenant dies. Fortunately it's never happened to me, but I'm sure it has for others and yes best to be prepared just in case.
+BiggerPockets I have been a multi family land lord since 1986. I too had a big learning curve. Learned everything hands on. Plumbing Heating and contractors. Everthing you stated is me.Just got to do it
Towards the end, one of you made a remark about "it getting darker" and you couldn't see him anymore, but I never had a video feed. What's up with that?
+bestofnewmexico the sun was setting at my location on the East Coast, and only had my small light on my desk on. The sun went down and it was very hard for them to see me. Guess that's why they never shared the video!
Very interesting about the living in the house for 2 years while you fixing it. So is it some loan you can get "5000 if u are married" on fix it? I didn't quite understand that part
+Anastasiia Greca So this strategy is called "House-Hacking". Go to biggerpockets.com and search for house-hacking. It's a GREAT strategy. Also check out FHA and 203K loans. This may be what you're referring to.
![How to Get a Developer Job - Even in This Economy [Full Course]](/img/1.gif)
One of the greatest shows you’ve produced!
I buy and hold in Bergen County and in Long Branch and manage myself. Really enjoyed him. Thank you
Looking to get my first rental property this year, very helpful advice. Great tips on how you built your portfolio and managed your self. Been interested in real estate investing for a while and so glad I found Bigger Pockets.
wow, these protection plans for repairs are game changers, thanks for the tip!
Very interesting podcast. This is my first time hearing about bigger pockets. Interested in the 1% rule that was mentioned earlier on in the podcast. That's a new concept for me.
Living in Southern California I was trying to run the numbers in my head and don't see how it could work (in this market). So if I buy a condo for 365k, am I supposed to get collect rent of 3,650/month for the 1% to work? I would be lucky to get 2,200 in this market. Or is the 1% on the loan amount and not the total purchase price? I'm wondering if this is a concept more suitable for the suburbs of Dallas than beach communities in Southern California?
+NaProbablyNot In ANY market, you can find opportunities within an hour or so drive that should meet the 1% - 2% rule. We know that to be true in San Francisco, NY, and Los Angeles.
Listen to other episodes of our podcast - www.biggerpockets.com/podcast and you'll hear investors in these markets doing cashflow deals. Thanks for the message.
+NaProbablyNot You need to understand that the 1% and 2% rule are good rules of thumb, but it really depends upon your price point and other factors. The main reason you hear many people saying they need 2% is because they're purchasing very low cost properties (below $100,000) and since the cost of "bricks and sticks" as Ben Leybovich would say is the same all across the U.S. you need to have a higher amount of rent to cover the same costs on making repairs regardless of the cost of purchase. The higher you go in your purchase price I think the 1% rule is something you should try to figure out how you can achieve, either from the get go or from adding value. And yes that means if you purchase for $300,000 you're getting $3,000 per month in rent. Regardless of your mortgage. This can be done in any large market, but you have to figure out a way to make it happen.
I REALLY like this guy!!! My favorite so far!!
Always wondered if you’re paying more in interest for the second loan than for PMI.
Hosting this podcast has come a long way
Darren can you please share a sample copy of your lease contract 20 pages . Pls.
Thank you for such an in-depth knowledge sharing podcast. You should know you are truly helping a lot of first time rental investors :-). THANK YOU!
One of the best podcasts I've heard thus far.
35:18 lease info
This depressed me. It pointed out that real estate is all about timing. A year of hunting for deals and nothing comes close to 1%. I have two duplexes and 1 sfh. Prices keep going up and rents do not. What’s the answer? Save money and hope for economic tragedy?
What state are you in?
Love this. Very helpful for this noob duplex owner. Thanks a bunch.
Great info. You guys can also go to *OnlineNetCareer .Com* if you're trying to make money online. This is what I've been doing and I'm happy with my results......
Happy to hear you enjoyed it.
Hi Maria congratulations ! I AM looking for a duplex also!
LOVE this one! Answered so many of my questions. Thank you all!
Art williams rags to riches book is a classic...great interview.
So for a owner occupant multi unit property do you literally live for free and loose the income or is there a way to pay yourself rent and have some creative way to write it off at the close of the tax year????
A lot of good points here but some bad ones too. You should never have tenants fix anything. Let's say they "fix" a faulty electrical socket and your building burns down. What do you think they're going to say? The landlord told me to fix the small stuff! Also, what if the tenant has work done and never pays the contractor and he puts a mechanic's lien on your property? A mechanic's lien takes number one position on your property, not a mortgage. How will your bank like that? Never mind the time you'll spend in court to prevent the contractor from foreclosing on the property! You'll just end up paying the contractor anyway and the price might not be what you'll want to pay. Also, never have the tenants pay your water/sewer bill, a bill your responsible for. Instead, just raise the rent to cover it. Finally, how do you not know what happens if a tenant dies on your property? You should be prepared for anything as a landlord.
+CTLawInfo My lease covers how and which repairs can be taken care of, as well as who can do them. Any repairs necessary must be reported to the landlord and if you think we don't follow up on making sure things were done the right way , as well as making sure any vendors are paid (so no mechanic's liens are filed) you're mistaken. Even if we do have to pay the bill the lease specifies that this will be considered additional rent, therefore making it the tenant's responsibility. The point of making a tenant responsible for repairs it to make them actually understand their actions have consequences. As for the water bill, it may be a landlord's responsibility to provide that in your state however it other's not so much. Every state is different. If your units are separately metered, like I have, the tenants set up the accounts directly with the water company. I'm very glad that's the case because I've seen other landlords with water bills on a single unit in the hundreds of dollars. When they passed the bill onto their tenant that water usage sure did drop more than 75%. Guess they were glad they listened to me. The tenant not so much because now suddenly they had to be responsible. The sewer bill comes from the local municipality of which we pay and then get reimbursed from the tenant. And lastly, since the podcast aired I now have an entire section in my lease on what should happen in case a tenant dies. Fortunately it's never happened to me, but I'm sure it has for others and yes best to be prepared just in case.
+Darren Sager Basically to sum up what Darren said... Make sure your lease is bullet proof! Thanks, Darren :)
+BiggerPockets I have been a multi family land lord since 1986. I too had a big learning curve. Learned everything hands on. Plumbing Heating and contractors. Everthing you stated is me.Just got to do it
Hi CTLawInfo,
Do you have any recomondations about what to do when a tenant dies in your property?
Darren Sager Would you happen to have a copy of your lease. Sure would like to take a look at it.
love this show !! thank you all
Awesome Podcast!!! This was my second one and I have over 4 pages of notes! You guys rock!
4 Pages of notes, wow!
Towards the end, one of you made a remark about "it getting darker" and you couldn't see him anymore, but I never had a video feed. What's up with that?
+bestofnewmexico the sun was setting at my location on the East Coast, and only had my small light on my desk on. The sun went down and it was very hard for them to see me. Guess that's why they never shared the video!
Very encouraging. Successful people fail the most..... I am super successful.
Very interesting about the living in the house for 2 years while you fixing it. So is it some loan you can get "5000 if u are married" on fix it? I didn't quite understand that part
+Anastasiia Greca So this strategy is called "House-Hacking". Go to biggerpockets.com and search for house-hacking. It's a GREAT strategy. Also check out FHA and 203K loans. This may be what you're referring to.
Thanks, already on it!
It's up to $500K tax free for married couples. $250K for singles.
I got a 10.5% rental so i guess im on track
Way to go!
Im all in at $10,500 and renting for $625 owned free and clear
Darren Sager I would love to see what your lease form looks like! :)
dang that's great
Great math!
;)
art Williams book is great bp is awesome thank you guys .
God bigger pockets is so much better since this episode
Awesome! Great job guys!
AWESOME THANK Y'ALL😊😙
You're welcome!
this one is actually loyal!!!!!
35:25
29:40 abuse proof materials
How in the hell are you supposed to buy a place for 100k and get 2k in rent for it? that's ridiculous
good info for sure
Thanks!
It's all about cash flow!!!
Art Williams!! 🔥🔥👍🏽
Too much talking, get on with it!
What do you mean too much talking??... it's a podcast...
Beat it nerd.
@RealestRealist Kiki is our nerd.
7:42
Figure out where your bullies are, they're probably not anywhere close to where you are in life lol