All Forum Posts by: Allen B.

I can't speak for New York, but the tax roll here in Memphis is sometimes twice what a property is really worth. The state guidelines state foreclosures can not be used. Many of the zip codes we concentrate on have no retail comps in the past 6 months.

One house we acquired 4 months ago for $22,000 just was assessed for $79,000. Since no one that wants to be a homeowner in that area can get a loan right now it is hard to tell the true value.

Back hen I was flipping properties I loved to advertise the tax value, but that was before I became a broker.

It is OK to only have one tool in your toolbox for now. Focus on getting the sellers to work with you, but any that can't or won't work with you are opportunities for others.

Instead of not going to the courthouse find someone that is interested and bird dog or sell the lead to them. That way you can get some return on your time and efforts.

Rich it is just simple diversification. If you have all of your properties in one market, then you are subject to any downturns in the local market that range from a simple loss of employer to major natural disasters such as earthquakes or hurricanes.

Diversification is a conservative approach, but if you have everything in one market and disaster strikes, then it can be a problem.

I am in Memphis and believe it or not this is an earthquake zone. What happens if I own 70 houses in Memphis and the New Madrid fault has a quake like happened in the 1800s?

If that happens I would rather only lose a percentage of my real estate portfolio than all of it and possibly my regular source of income as well.

Now if nothing happens in your area, then there was no need to diversify, but I can't predict the future. Hopefully everything works out in your area, but I am probably more conservative in my investment strategy.

Diversification is a huge consideration in stock/mutual fund investing, but hardly given any consideration in real estate investing. I personally hadn't given it much thought, but I did after talking to Katrina refugees who were landlords in New Orleans.

So then are we saying that by my going to the courthouse and looking up NOD's, th emost I could hope for is a short sale?

No, I was just saying that in today's market that you have to do a lot of searching to find the house that has a huge amount of equity in my market, but they do exist.

In my opinion, you should start diversifying geographically when you hit 15-20 properties. The US is large enough that there is no need to diversify internationally. Unless your city is totally dependent upon one employer, then I think this is a good number. Having all your houses in one market is akin to having all your money in one specific stock.

One example I use often is the investors that had over 50 properties in New Orleans a few years ago. Right now we can help people with the Memphis/NW Mississippi area, but it is my goal to provide our investors opportunities in St Louis and Oklahoma City in the next two years.

It is possible, but a small percentage of foreclosures have equity. I have seen $100,000 houses go to the courthouse steps over $26,000 mortgages. I have seen free and clear houses sold a tax sales for a few thousand. It is the proverbial needle in the haystack.

Sometimes you can work them pre-foreclosure, but sometimes it is an estate situation and the heirs are fighting and you can't. Usually when there is a situation like this it is because the homeowner died or some other tragedy.

This is an interesting article from the Lexingotn Herald Leader. Interesting to us, becasue we have rented to some illegals who gave us bogus ssn cards in the past, but have always paid on time:

http://www.kentucky.com/181/story/444941.html

My goal in our management business is to reach the point where we manage every aspect of the real estate investments for our clients. Right now they are still deciding which properties to buy and where.

Obviously, that is not for several of the people on the board here. But, there are a number of people that want to invest in real estate. Not all of them have the time or the ability to be in our market.

The hardest properties to manage are the ones where the owner still wants to be involved in the management. We had people that want to do the repairs as they don't want to pay the fees, but they would take too long and we would have upset tenants.

Well it is important to keep new tenants happy. Although I spent 270 on groceries last weekend, I know not all of that went in the fridge or would be ruined if the fridge died. Milk and meat and frozen yes, but soft drinks, beer and other fridge items would still be ok.

If you think this is a big deal have them submit the receipt for the groceries and add up the items that would have gone bad. I bet it is less than $100 unless they stocked up on frozen meat. Plus they probably had eaten some of it anyway.

Our guidelines are based on the Memphis Marketplace and may not be appropriate for you. The Memphis Area ranks last for personal savings and is where the Chapter 13 bankruptcy was invented.

You can legally discriminate against smokers or attorneys for example. A lot of landlords refuse to rent to attorneys as they are so prone to sue. Smoking or being an attorney is not a protected class.

As for the no shows, I always call an hour before the appointment and if they don't answer I don't go. I also like to group people together as much as possible so I have 4-5 people show up at same time.

PM me your e-mail and I will send you a pdf of our application.