All Forum Posts by: Andrew Taylor

Thanks, @Santos Collantesfor the Pub Fiction heads-up. I'm headed to the BBQ Cook-off at the rodeo tomorrow night, but I'll contact @Charles Nguyen about joining the group.

Something else to consider is that Katy, Sugarland, Cypress are all flat as a pancake and just about as interesting to look at. Coming from Colorado, you might want something more scenic.

Problem with Cypress area is that you really want to avoid 290 like the plague. That is going to be the most miserable commute, followed by anything on the 59 corridor (Sugarland, southern part of Katy / Cinco Ranch etc.), followed by I-10.

Have you considered The Woodlands / Tomball areas? Much prettier, and your $300k likely goes farther. Toll roads to downtown, so traffic (while still sucking pretty badly) isn't suicide-inducing.

There's lots of growth down south (288, NASA area) but, again, not all that scenic. Avoid anything east of downtown.

Re: your "maybe-get-a-realtor-license" idea... I just met with a brokerage this morning (long story), so this information is fresh on my mind. Getting your license is going to cost you about $1,000 up-front. Figure $400-600 for online realty school, plus another $400 or so for application, testing, and licensing fees.

I don't have any other input on your plan (being a new guy around these parts myself), but I wish you the best of luck.

Thanks for the warm welcome, everybody. I'm currently going through some of the eBooks and webinars, and will start in on the Podcasts soon.

For practical education, I've been trying to analyze potential deals that fit into my preferred category (small, multi-family units within an hour or so of home). I'm pretty good at tracking down tax info, but I really need to find a good insurance broker to get a handle on what kind of insurance I need and what it'll cost. A quick feeler I sent out a few days ago came back with a ballpark figure of $200 on a $125k property in a very rural area, which seems high to me - but maybe it's not. No way to know for sure until I take him a specific deal and sit with him to crunch the numbers. Might try to do that tomorrow.

Something else I'm planning on doing in the next couple of days is visiting a local banker or two to introduce myself and interrogate them on what they'll require to make a loan on these kinds of properties - i.e. how much down, what % of rents count toward income, closing costs, etc.

Any other recommendations for my to-do list?

Hello, all. My name is Andy Taylor (don't say it) and I am a new wanna-be investor from the Houston area (Magnolia, actually, which is 40 or so miles north of Houston proper).

I stumbled onto BiggerPockets.com after a late-night Half-Price Books run that saw me come home with an armload of discounted Rich Dad books while on a recent out-of-town trip. With nothing else to do at the hotel, I plowed through several of the books and am now motivated to fix what ails my financial life.

I started building homes in 2001, and did that full-time until the market here crashed in 2008. I got into the oil & gas industry as a technical writer, and did that full-time until the market crashed in early 2015. (Oddly, I got into home building when I got laid off from the telecommunications industry in 2000 because the market crashed. Clearly if you want to destroy an entire industry, you should hire me right now and then practice your evil laugh until the market, inevitably, crashes.)

After more than a year without full-time work, I'm in no position financially to start investing in real estate...but I'm planning ahead. My plan is to get us out of our current funk, then slowly start investing in small, multi-family units within an hour or so of home. I'd like to own 1 within a year, 3 within 2 years, and 10 within 5 years (disclaimer: that's a first pass at setting some goals, so I reserve the right to modify). I'd like to have enough passive income for both my wife and I to quit our jobs within 10 years (assuming I can get a job in the next 10 years).

My biggest hurdle is going to be convincing my wife, who is very risk-averse, to go along with this. She's a teacher and eligible to retire next year. She's planning to take her pension and then go back to work doing something she's not sick and tired of. Other than her pension, we've got nothing set aside for retirement. I'm playing catch-up now, but I think REI might be a good way to make up some ground.

I love watching these bozos flip houses on TV. Some of the ridiculous stuff they get into makes me feel like a genius. I'm stunned that they are successful enough times to fill their airtime. Would LOVE to know how many times they screw the pooch instead of making a profit.

I'm new to this, but I'd say you're pretty close. It's a small town (Navasota, TX), and (without knowing anything about the tenants) I'd guess it's a "C" on your scale. Could be "D" but unlikely that it's "A" or "B".

Local insurance guy just ballparked me $200/mo for insurance, although in his words "that's likely on the high side."

Property is right on the main street of the town, sort of down near one end. There's commercial stuff across the street on two sides (this is a corner lot). I don't know that the town is growing, but it's certainly not stagnating, either. There's some cool old historic buildings down the street. It's the kind of place I wouldn't mind moving my family to, if I had work there (or better yet, if I owned a bunch of rental properties and didn't have to work:) )

Okay, so, some of those I have and some I need input on. Remember, I'm a new guy.

Purchase - I'd have to finance. Maybe home equity loan to come up with down payment funds. I will not be living in the unit.

Insurance - not sure what this expense will be; what's reasonable?

Vacancy - unit is near (but not in) a college town. Currently fully-rented.

Capital Expenditures - I did a drive-by, and there are some things that I'd want to spruce up, like broken shutters and a leaning fence. Not sure about the inside.

Debt Service - based on best-guess of 10% down and mid-5% interest, loan payment would be $645.

Property management - not sure. What's reasonable?

Utilities - I believe these are paid-for by tenants.

Deferred maintenance - not sure. What am I look for here?

Okay, apparently my first post was disqualified for some reason. Not sure why - can't get anyone at BP to answer my question. I'm reposting below, removing the links from the original. That's the only thing I can think of that might be a flag-raiser.

Hiya, folks - I'm new around here but would like to jump in and ask for some opinions on a couple of properties I've located. One of them is far too large for me to actually pull off, but mostly I'm interested in "did I run these numbers correctly?" analysis. Both deals look pretty good to me, but I've been accused of wearing rose-colored glasses before.

[Link to Deal 1 removed]

[Link to Deal 2 removed]

Based on my understanding of the "evaluating a potential deal" posts and my spreadsheet based on those posts, Deal 1 has a 12% cap and a 64% COC. Deal 2 has an 11% cap and 51% COC.

Am I doing those calculations correctly? (Hard to verify without posting links to original deals.) Do those numbers seem right to the rest of you? What's your take on these two properties? (Ditto.)

Finally - and this may be a dumb question, so apologies in advance if it is - but why would someone sell a property making as much money as these seem to be making? That's the question my wife is going to ask me when I try to sell her on this plan. "If it's such a money-maker, why is it for sale?"

Thanks in advance for helping a new guy out.

[Edit: Deal 1 is a small tri-plex, offered at $129k, with rents of $1700/mo. Property taxes about $2k. I don't know what to figure for insurance, but pre-insurance cash flow is nearly $700/month.

Deal 2 is a large (6 or 8 duplexes) property offered at $650k, with rents of $8200/mo. Property taxes are about $14.5k, and again, I have no idea what insurance costs would be. Pre-insurance cash flow is roughly $2,700/mo.]