All Forum Posts by: Ryan Arth

Thank you for the case study. We are working on a similar development that has many elements that are novel to it, but it won't be zero energy. 

Given the outcome, would you do it again, and if so what would you have done differently?

 I had a client considering a building on that edge that you mentioned just yesterday. I made the same recommendation, if they were to dip into EC from OOS, that would be the only place that would potentially fit their buy box.

Quote from @Rereloluwa Fatunmbi:

Thanks a lot, everyone, for your advice! Instead of lowering my standards on background checks, I waited a bit longer for the right tenants just like you suggested. After about 2 months of waiting (and paying mortgage), I finally rented it out for $1000! This means I cash flow $462. One thing I did differently, was not just depend on my realtor to get the house rented. I also advertised on facebook market and got a lot of interest. But I have a new concern.

Interestingly, this original question and your responses were featured in David Greene's BiggerPockets episode #969 at 20.33 min mark (https://www.youtube.com/watch?v=5yLr4ktCtqY&t=1807s).

David and Rob advised that since I'm in a bad location, I should consider selling the house and buying in a better area judging by the long time it took to get a tenant. I purchased the property in March for $81,500, and the appraisal value is $87,000. My PITI (total monthly expenses) is $537, and it is now rented for $1000. Cash-on-cash return for this home is 20.50% and the estimated time to recover original cash invested will be 4.88 years if rent remains the same and no major expenses occur. The numbers still look good to me (especially since I have not even factored in possible rent increase by renting to section 8).

But David and Rob are experts, so I don't want to dismiss their advice. What do you guys think? Should I sell this property?

More details:

Location zipcode: Akron, 44306

 Do not take general statements as gospel. People invest in all classes of neighborhoods and do just fine, as long as they know what they are getting into and have proper expectations. 

Your COC is 20% if you have no other repairs, vacancy, etc, which over time you will. So the long term average will be more important, but you will not know that for awhile. If the new tenant is gone in a year and you have two months before you get it turned back around (with additional repair costs), then that is a different story.

If you are satisfied with the current state of that investment, no need to sell just because you heard it on a podcast. 

If you are investing for cash flow long term, you would benefit from paying off the loan sooner (eliminating interest). 

If you are investing for a return on capital, the more you pay it down the lower your return on equity will become, as you have more cash tied up in an investment that brings in a fixed income. 

Come meet your fellow investors, service providers, and lenders in a casual, no-pitch, environment. Your network is your net worth.We meet the last Thursday of every month. We should be near the outside bar. It's our ninth year.

 Well I was there with my antenna up, so just know that there may always be at least one in the crowd. And no, I do not have any relatives by that name in FL.

Yes you were. You spoke on a panel about home building, and I asked you a question from the crowd. That discussion pushed me towards ground up construction, where I finally find myself today. So thank you.

 Why thank you Sir. I originally found BP to help myself nagivate the waters of RE. Now I am here to help others, though I do still learn daily. 

I remember studying your business model early on through your posts and early podcast episodes. We also met at the speaker's dinner at J. Martin's RE Summit in Oakland in ~2018. If I remember you left your family in Vegas at a birthday celebration to come speak. Now that is service! Cheers to you.

@Nick Garton If I help with your Akron expansion plans just reach out. 

 There is an old saying that might apply here. "The market can remain irrational longer than you can remain solvent."

Assuming that this market will rise to the level of "everywhere else" and not inflate in relative lockstep with other markets may turn out not to be an accurate assumption.