(07-02-2019, 01:30 PM)GTBrandon Wrote: I am looking around at prices and homes, and thinking maybe buying in the Alexandria, Arlington, or Falls Church area would be the right move. I want a property Ashburn-esque, meaning the neighborhoods, schools, etc will keep expanding even if that's not for another 5 to 10 years out. I have no real price in mind yet, but I wanted to get your advice.
1) Going in on this with someone else. Finding someone who can also put down money on a downpayment means we can pay less interest, potentially get a more expensive property, split costs of any repairs, and split monthly mortgage. But it also means splitting the profits, and the decision making for repairs, tenants, etc.. We already briefly talked about buying with a high downpayment (30% of value), but I'm sure there might be a lot of headaches when doing this with another person.
2) Buying a fixer-upper or getting something that's already in good condition. I've had my fair share of binging HGTV, and seeing what's possible with renovations. But I don't have the knowledge to look at a house and estimate the cost to renovate a certain part of it. Do any of you have experience with this, and can speak to whether it makes more sense to buy a house that is already good to go for the most part, or getting one that needs a little TLC.
3) Getting my VA real estate license. This seems fairly quick, easy, and cheap. For a summer's worth of spare time, and around $300 I could have my license to buy/sell, seemingly eliminating the fees on my end at least. This 2% could be $8k saved, so I don't see why not. The only thing brought up by Jay was that the real estate agents can help you from buying a mistake house, something I couldn't necessarily do but would hope to do with ample research and inspections.
4) What to expect in monthly costs. Are there any good programs/websites you use to estimate the monthly costs of buying a house. I'm quickly realizing there is a lot more to consider other than the purchase price and percentage rate. Things like HOA, property taxes, etc that will be billed monthly. What is your rule of thumb? Not to have all of these costs combined go over 30% of your gross monthly income?
5) How did you decide on where you wanted to buy a house? Did you look at city plans for the next 10-15 years of highways, shopping centers, zoning plans, etc? What are some key considerations for your neighborhood and proximity to certain landmarks like metros, beltways, etc.
6) Tax heavens to look into for home ownership as well as mortgage payments. I'm sure there are things for first time home buyers, and many little ways to save money here and there.
1) do not buy a house with a friend unless you form a real business partnership/LLC to own the houses. Even then I would not recommend it.
2) every home project costs at least twice as much and takes twice as long as you think it should. And labor rates for trades people are through the roof in northern VA - plumbers get $200-250/hr, electricians even more. Dont even ask about structural engineers. Yes you can DIY stuff, but are you going to do this while working a day job while paying the mortgage and taxes on an empty house? The TV stuff really romanticizes home renovation and its totally bullshit - the guys on the show are working 3 shifts to get it done and zero fucks given about real quality of the work. I just contracted out a gut & remodel of my whole main level, buy me a beer and i'll convince you never to do this for a rental property.
3) if you want this to be your career, then sure, get the license. You can make flips work in this area but you need to be buying at short sale/auctions and be your own GC on projects and have the license.
4) you gonna pay county property tax, HOA fees, sometimes city tax (falls church, herndon, alexandria). Then there's maintenance. And exploding hot water heaters. And property management fees if you go that route. It adds up.
5) you gotta decide whats important to you - location, amenities, activities, commute, services, etc... that said you can rent just about anything anywhere thats a desirable location. The going rate for military reimbursement is $2700/mo, FWIW.
6) your points and your interest are deductible on your personal taxes for your primary home. once you get into rentals and if you are forming an LLC to protect your ass then the equation changes. There are lots of first time buyer programs where you can get in with 3-5% down payment but these are for your primary home. If you are looking at multiple properties then those things arent available and you're going to need more money down.
General rule of thumb for real estate investment is that you want to be getting 1% of your purchase price in rent every month if you want it to be an income generating property, which is going to be a really tough stretch in the northern va area to find something that fits.
If you want to live in a van and roam around with some properties generating some income for food & internet bills then great but you'll still need capital to buy in and get them rented. If your plan is to just have a day job and you have the capital to put in, then run some math on what the long term index fund investment of your capital and see what it looks like in 30 years, and you dont have to be its landlord. May or may not be a better use of your money.
My $.02.