All Forum Posts by: Ryan Arth

@Itay Heled One thing to consider is that the demand for that program may be down right now. A large apartment building that predominantly catered to Clinic people and international students at CSU just went bankrupt, as they lost nearly half of their tenants in Q4 of last year. Immigration concerns were the stated cause. 

It was run by some of the most capable operators in the region. 

Congratulations @Nathan Fisher. That is no small feat. Here is to five more.

@David Pimentel I use and refer Shoreway home inspections (Brett Bracey) and InspectionTech (Aaron Westerburg). 

Quote from @Luka Jozic:

Quote from @Min Zhang:

Hi Luka !  Totally hear you—went through the same early on. Even with full rehabs, older homes in C areas can bleed cash with repairs and tough tenants. Switching PMs helped me a lot too—vendor pricing and screening make a huge difference.

You're not alone in this. Curious if you're thinking of shifting strategy or just exploring new markets?

My goal was always cashflow, and what I've realized is that since like 2020, real estate is a terrible vehicle for cashflow and if you look at the avg rent vs avg home price trends, you can see its only getting worse. The only markets left with any type of cashflow are markets like Cleveland, that for the most part have old home with lots of issues, and a very unstable tenant base. With the minimal cashflow available, capex, repairs of old homes, and tenant issues and how expensive turnovers are in areas like Cleveland, I think the odds of actually having a successful rental these days are extremely low UNLESS you have been doing this for years and have access to amazing deals that others dont, with systems in place. 

Additionally, to reach any meaningful income you'd need 30-50 units. Even with a PM, thats a lot of work. If Im gonna deal with all that headache, I might as well buy a blue collar business. With SBA leverage goes further, and a business cashflows 10-20x more than a rental does. For $100K you can buy 3-4 properties in Cleveland and cashflow maybe $5-10K a year best case. For the same money, you can buy an $800K business and cashflow $200K a year. Its a no brainer for me. 

Unless you are buying a company and putting a GM in place, it isn't directly comparable to real estate with a PM. And I am a big proponent of buying small businesses. 

Buying lower end rentals is definitely a weak short-medium term cashflow play, and not even a great play long term, when compared with other asset categories. And generalizing this market based on your experience is a bit of a stretch. Your plan didn't quite work, I get that. "Passive" real estate investing strategies are more for storing wealth, not generating it. 

Lots of investors locally have better access to deals than out of towners. And many don't invest in the City at all, and if so, in very limited areas. 

The data on ETA business purchases show IRRs of low 30's over time, but that is far from a passive play backed by an asset. Your property value shouldn't go to zero, a business purchase absolutely can. 

If you bought that 800K business that cashflowed 200K a year, with your 100K down, the SBA debt would take half of that 200K (standard rule of thumb). So you would be left with 100K to pay the GM (to make it semi passive), leaving no return on your investment or cash to fuel growth. 

I agree with your thoughts on buying a business, and I am part of a local group here that supports those efforts, but it is hard to directly compare it to your real estate endeavors. Check bizbuysell, axial, etc, and connect with local brokers, and see if you find something compelling. Good luck. 

Cheers.

@Richard Wang you should contact @Nathan Fisher

@Steven Cathcart Bravo. Direct mail still works!

@Darko Bozic We are shopping financing on a MF build now, DM me and I can provide some contacts locally.

@Peter Peter Joshua made a fine suggestion. If you can provide some more detail around what you need I might be able to recommend others. 

Quote from @Gerrell King:

@Robert Ellis I'm a new developer with a background in working for home builders and I'd like to focus on new construction of 2-4 units for rent.  At the moment, I'm limited on cash and am not in a position to cover all of the costs to start however I can cover some.  

Any advice on how to navigate this challenge of funding deposits, construction loan draws, permits, etc?

2 sellers I speaking with are open to owner financing and I'm considering offering them a fixed or preferred return and full payment when I refi. 

 That sounds like its worth a shot. Or find a straight capital partner to come along on the deal. Or find clients and build for them with their bank loan to fund the construction. 

Quote from @Jay Hinrichs:

Quote from @James Hamling:

Quote from @Paul Azad:

SUPPLY 

"About 2.6 million Baby Boomers die each year, but that number is expected to increase to nearly 4 million by 2037." And a total of about 3.3 million Americans in total die each year. Likely most are over 40 and more likely to be homeowners than younger people percentage wise. Boomers are largest demographic co-hort in US history. Also a buddy of mine lives in a mythical city called Austin, where he swears while sober, said he saw guys 3-D printing houses, well foundation/walls etc. I have not looked into this but, if process ramps up, could cut construction costs, time to market and massively increase supply, too. 

DEMAND

America is decreasing it's previously Laissez-faire approach to immigration.  

So population decline either with Celestial deportation or with a more southerly route may not be good long term for housing market?

3-D printing for homes has LOOOOng been around and being fiddled with. Literally decades now. Have you seen any huge impact from 3-D home printing yet? No. It's an interesting idea that still hasn't landed any significant changes. 

SW is about the only place we can do it so that's where all the R&D is located by the daisy-chain of those trying to evolve the tech to something of viability. 

For now it's still a novelty more than anything. 

The recent leaps in pre-fab builds is the spear head of things. BOXABL is a standout leader in this segment. That is where your most likely to see any significant disruptions come from for any radical shift in how housing is built. 

been following boxabl  but I have yet to see them in the wild.. they are located in Vegas ( factory) and its a very limited product mainly an ADU from what I see.

 I also followed Boxabl and 3D printing for housing, but settled on SIP panels and modular as more effective solutions at this time.