All Forum Posts by: Account Closed

Originally posted by @Jason V.:

@Account Closed - No sweat there buddy, maybe you should take it as a compliment that your deals are so good that people have a hard time believing they're real! :-)

For the record, if you had just told me you're a VP with Wells Fargo and run a website that charges people $2,000 to join a "group" in their area also looking to invest, it probably would have saved a lot of time. The more I look into you (and 'Income Properties Portfolio') the more I would be turned off as a potential student/investor. 

You and your partners could be the most upfront, honest, stand-up, legitimate company in the world - but nothing in this post, your website, or the public records for Goldschneider Property, LLC have made me anything other than more concerned. Take it as friendly advice that you may want to work on your marketing or message :-)

Good luck!

 Thank you.

But I'm not here to self promote any of my business ventures. At all. BP guidelines strictly say no self promotion and I'm respecting the community. Nothing wrong with that.

I'm just interested in connecting with others in the community in the New England area. Look forward to meeting with those interested.

As for my properties, I will be posting a video tour of one of my properties in a bit. It's a cool little video I had filmed that walks through the work I have done and rewards I'm reaping from it.

Originally posted by @Jason V.:

Originally posted by @Account Closed:

Ronovations were financed based on pro forma rent numbers and construction loans (down payment from cash out refinances or HELOCs). When the market is good you can cash out your equity and roll it into the next one.

I'm really not trying to be a jerk here bud, but as someone who hasn't been around BP for all that long, you should understand that there are a lot of folks who come on the forums with posts like this (which are, frankly, a little hard to believe, especially with your claimed expense ratios, funky spreadsheet, and 'every deal is a grand slam' numbers, without talking purchase prices, etc.) You may just be the next Real Estate Superstar and be running a giant REIT in a couple of months - I really have no idea, but I think other folks on the forums should be a little cautious before using your examples for their own investment strategy.

I'm familiar with how to do a cash-out refi, but I'm curious who your lender is that you're able to do HELOCs on properties you're not occupying. I'd definitely be interested in working with them. Same thing about any lender who's willing to do traditional mortgages on uninhabitable properties. And BRRRR is a great strategy - it's getting the first one rolling that can be tough, especially if you bought your first property in 2007, right before the market took a nosedive. How'd you finance your first property? If you've got a lender that'll work on stuff like that, I'd love to get their contact info, if you're willing to share. Were you able to refi to get your cash out of the first right before the crash? Because that would've put you in an awesome situation: sitting on cash to spend when the sky was falling all around the mortgage industry. I wish I could've done exactly that - but hindsight is 20/20 and all that.

You say it's a 7 million dollar portfolio, or roughly $538k per unit, meaning one of your triplexes is worth ~1.6 million (which is probably about right) and it's in Cambridge which has a property tax rate of $7.82 per $1,000 - your taxes on that Triplex should be more than twice what you have shown on your spreadsheet. So either your spreadsheet is wrong, your tax assessment is wrong (and you're going to spend another $7,000 a year on that property in taxes) or you're overestimating the value of your property. My guess is that your tax assessment hasn't caught up yet, and your tax bill is going to wind up being closer to $15,000 than the $5,000 you're showing (but hey, not really my market - that's just how I'd evaluate it if I were going to buy it.)

Like I said - this may all very well be 100% true and accurate, but when you slide in that "I'm working on something bigger and looking for investors" line a couple of posts in, the alarm bells start going off in my head. So forgive my skepticism, if it's misplaced - but there have been a lot of posts on BP lately about new people getting suckered on deals that had a setup very similar to this one. And I would much rather risk offending someone than watch other folks get played on their first "deal."

 Yes, your assumptions are all wrong. I shared that just to show people what I've done and what some guts/determination and chutzpah can do. My partners are I are focusing on 150+ unit properties in Texas and Arizona. I've done well and I'm going to share my story. Thank you.

It's purely a relationship based business. Don't expect them to cater to you when you simply call them. It's a lot of networking. But if you have pre-existing relationships, you should leverage those.

Ronovations were financed based on pro forma rent numbers and construction loans (down payment from cash out refinances or HELOCs). When the market is good you can cash out your equity and roll it into the next one.

Originally posted by @Javier C.:

@Ari Goldschneider just as Ashley mentioned, you are where several of us want to be in  the future as well. It is interesting to see the other side of the coin. As an Architect we always see the transformation of old properties but don't get to see the investors perspective. Whether that be 5 or 10 years down the road I am glad to see such great returns/results.

 Thank you. I see you are in Houston. Actually my financing partner currently is a partner in ~1,400 units all in Houston. One is a 288 unit building while the other is 1,094 units. Houston's a great market.

Ashley Owens My four buildings were all on MLS. They were ugly pieces of garbage that just didn't get the attention of the broader market. Perfect for me. The uglier the better, mold, rats, knob and tube electrical, plumbing out of Code. Bring it on! With the exception of some investment from my parents, I've done this all without partners. Bank debt is awesome. Aside from the initial investment in Cambridge, no additional cash has been contributed to this portfolio.

That is pocket cash flow. I do the management myself which is very do-able with 13 units. Vacancy doesn't happen (at least for me) in the Boston area so allocating for vacancy would be overly punative. I have some repairs budgeted there ($1500 per unit per year) but I don't look at cash flow allocating for future major repairs. Many of the up front repairs are performed when the initial purchase is made and as such are capitalized.

Gotta buy right and make improvements the generate a clear return on investment. The uglier the better!

You will need at least $250,000 not including closing costs at that asking price. That's the truth. And with those numbers, I would not offer more than $800,000. 

Originally posted by @Michael Fratalia:

@Account Closed, looks great!  Very impressive. 

 Thank you sir.

If you want stability in any market environment, stick to B & C. Amateurs often look for Class A, shiny new buildings that look pretty. But during economic downturns, Class B & C experience very little volatility in market values and market rents. Let me explain.

For ex. the decline in oil prices and resultant job losses in the Houston market caused many Class A tenants to downgrade to Class B, maybe even C. The rents for my partners Class B & C assets remained steady. And they own many 300+ unit buildings, lot's of them. They reported no change or drop in rents, but an actually uptick in occupancy levels and a large waiting list for tenants looking to move in. The Texas market also saw lot of new construction, many of them have lost some value and have had to lower rents and offer more concessions.

As an investor, you will always find value-add opportunities in Class, B, C and even D. I know it sounds bad when one thinks about class C & D, but it works. A article recently published in Biz Journal about a friend of a friend who purchased a 160 unit Class D- with $65k/month in rents brought it up to $90k/month. Fact is, most investors get discouraged when they tour Class C & D properties. They see the type of asset it is, the type of people that live in them and the overall condition and get discouraged. Most wannabe investors want to see granite counter tops, wooden flooring and nice appliances, all with a discount so they can get a good deal! That's impossible. Not going to happen. I brought many crappy buildings in MA to compete and I'm not going to sell that to you at a discount. You will find value in buildings that are kind of falling apart cosmetically or maybe even boarded up. Sure, location is critical, but the condition of the property is even more important. I know what I'm saying is counter intuitive. My partners own 1,400 units and they executed the same strategy. I use the same strategy as well. I just posted in the success story yesterday about one of my properties. Look at the before pictures. It looks bleak, but I see value.

So my take, focus on Class B & C for stability without having to worry about the impact the next recession will have on your properties and rent collections.