All Forum Posts by: Account Closed

Do what you want but dont be a bird dogger masquerading as a wholesaler! A real wholesaler understands market values (ARV), has a good way to estimate rehab costs and knows what investors will pay. Plus he needs to be able to get the home under contract, do the right kind of closing etc. He may also have to put up earnest money which he loses if the deal falls through.
None of this is easy or obvious. A bird dogger on the other hand just throws out leads he gets from driving around or some small marketing effort. No risk on his end nor is he expected to have the specialized knowledge.

I have seen too many bird doggers who think they are wholesalers and it gives the whole business a bad reputation amongst investors. Inflated ARVs, understated rehab costs and no understanding of whats a good ROI for an investor seems to be rampant.

I have looked into the same thing for the same reasons. In the Bay Area the community colleges offer a reasonably priced course.

I am also pretty conservative with money. I never buy anything on credit that I could not pay cash for. With the exception of my home. But I will take a car loan at 0.9% and keep my money invested in higher returns. The way I see it, the government and the Fed is making it foolhardy to do anything but borrow your way to prosperity. The fed has pushed interest rates to zero so there is no risk free place to keep your cash. On the other hand they have made it possible to borrow money at 3.5% for 30 years on property. Now, we all know inflation will come as a result of this reckless fed spending. How should we protect ourselves? If I borrow money today at a very low interest rate that is fixed (this is the key), I will pay it back in the future are a highly discounted rate due to inflation. Inflation reduces the debt. At the same time, the asset purchased with debt goes up due to inflation. So you win both ways. Meanwhile the income produced more than offsets the debt payment (the other key). These low interest rates cannot last forever. It is effectively a government subsidy, one of the few that I am eligible for! I'd be crazy to not take it.

Ramsey preaches to the generally financially illiterate. Those that use 18% credit cards to pay for shoes are not investors. Investors have to think differently.

Every successful business in the world uses debt. Apple is raising billions in a bond offering. Corporate and govt bond markets are trillions of dollars. Anyone who categorically says debt is bad is just plain wrong. Debt when used to purchase appreciating or income producing assets (like a business would) is good. As long as the rate you borrow at is much less than your earnings on the investment its good to borrow. Only thing to study carefully is the risk. I wouldnt borrow money and go play craps or invest in the stock market. I have no control there. Real estate is a different story all together. Much more manageable risk profile. At todays rate, I am happy to borrow as much money as a bank will give me!

I buy turnkey. If you do your diligence you can avoid the scams. And its about having the right team in the market. I cannot stress that enough. My view of turnkey is rehabbed with renter in place with lease. Now I know I am paying a premium for this. If the numbers on ROI still make sense, I have no problem paying a premium. I dont care if someone made a profit or even how much. I look at each deal on its own merits. I know many here are aghast that I am leaving money on the table and if only I bought at auction, did my own rehab and found my own tenants I could make so much more money. I dont care. I have a very high paying day job that I would rather spend my time on!

Anna Z.

As Michael Lauther said, personal contact is essential. It starts with the source of your inventory. Knowing who rehabbed the home and to what standard it was rehabbed is important. Before my first purchase I visited and met the people who were rehabbing and selling and looked at the rehabs and talked with them. Then I had to get a reputable inspector because being remote, they are your eyes on the property before the purchase. I asked the inspector to take a lot of pictures and asked him a lot of questions. Then there is the property manager. Thats the most important piece. Again, I believe in personal contact so I met a couple in person. Again, ask a LOT of questions. Other pieces of the puzzle was a mortgage broker. I got one through a referral that has worked great. Now this is lot of work. Not worth it for one or two homes. But my plan is for multiple properties so now the network is set up, I leverage for more purchases. There is a lot more to this than I can post here but if you want, I can talk to you in more detail about what questions to ask, how to do the diligence etc. You can connect with me as a colleague and we can discuss it offline. Hope that helps.

I live in the Bay Area but all my investment properties to date are in Indianapolis. I would like to diversify more so currently looking at other attractive markets. I dont care about the distance from California. I look for two things: the market (numbers) and the team ( a set of people I can trust). If I have those two, I will invest in a city.

I would be a little wary. No receipts means no rent history. I am not sure how things would look in a court if it comes to eviction with no lease and no tenancy proof. Also 7 people in a two bedroom sounds like an awful amount of wear and tear. Also many cities have limits on how many unrelated people can be in an apartment or house. If a neighbor complains could be trouble. It could still be worth it for exceptional returns but I would be cautious.

Hi Julia

Welcome. The realtor market in the Bay Area is really competitive since many exiles from the corporate world have got licenses and are trying to change careers.The attraction is the high home prices and matching high commissions. It would help if you picked out a niche and then developed it. For example, focus on investors, or first time buyers or people moving in from out of state etc. Also ethnic groups in the Bay Area have a strong referral network, so getting plugged into any of those may also help.

If you have funds outside an IRA use those first for rentals. You can deduct depreciation, mortgage interest, and expenses. So your effective tax on the income will be reduced anyway. You can use the IRA funds for notes or other high yielding passive investments that would be taxes at high rates in a taxable account.