All Forum Posts by: Axel Norvell

@Dennis M. I think you are right. The property wasn't really as good as I thought it could be.

I re-checked the rental comps in the area, and getting $2500 for the property would of been a stretch.

What the property had going for it was the potential to convert it into 2-units. 1 main house, and a back-side apartment that would be good for a business/office rental.

The location was also very good and exactly where I'd like my first investment to ideally be.

I was considering offering $150,000k cash for the property which would of be $70k below asking price. All in I would been at $200k with a ~$300k ARV (based on comps in the area).

For these types of deals, do you guys typically find the purchase price that makes sense, and make the offer (even if it's ridiculously below their asking price)? I'm assuming if you do this 100 times and you get at least 1 person to accept the offer, the strategy would be worth it?

Not a problem. Glad to help in any way I can :) 

@Mark Sewell @Kevin Wood for you guys who invest in the Channeview/Baytown and areas closer to the coast, what are your thoughts on potential flooding and hurricane damage?

I know that these areas were devastated by Hurricane Harvey. Is flood insurance even enough to protect you from another disaster? Assuming we have another Harvey, potentially all of your investments in the area would be uninhabitable which means you experience huge loses due to vacancy (and damages if the insurance doesn't come through).

How do you mitigate risk in case of another disaster?

@Kevin Wood looking forward to your meetup. I listened to your BP podcast episode and it was great!

@Brian Alfaro - Originally I was trying to cut costs by doing the majority of the rehab myself. But you are right, that will take a lot more time and effort, and the time saved by having a contractor I could be searching for another deal.

This would be my first deal though, so I'm not 100% confident I'd be trying to close another deal in tandem.

I also wanted to get my hands dirty with the rehab as I absolutely love fixing things and making them nice again. I also thought it'd be good to get first-hand experience of how much effort certain things were to do.

I've already done a few things in the past like:
- Tearing out carpet and replacing the entire floor with wood laminate
- Painting an entire interior
- Painting kitchen cabinets
- Resurfacing a laminate countertop with concrete
- Replaced a toilet

I'd like to learn a bit more, like:
- laying tile
- replacing a window
- replacing a light fixture / switch
- potentially retiling a portion of a roof

While I don't see myself doing all these things for future investments, I think that having a good understanding of what it takes to do each one gives me good leverage and experience when negotiating with contractors.

I think for me as a buy-and-hold investor, it doesn't sit with me well that the wholesaler would do a double-close deal, and keep the Mineral Rights.

If I was flipping the property, I probably wouldn't care.

Hi @Mark Gilford! I'm a beginner as well looking to build a buy & hold rental portfolio.

I've learned a ton so far from books, BiggerPockets, and meetups.

So far I've been to a few local real estate meetups in the area, and here's my thoughts on each:

1. Wholesale Nation:
https://www.meetup.com/HPP-Wholesalers-Network/events/
This is a wholesalers meetup, but I personally found it pretty valuable. They gave me a lot of insights into the working of a deal, how to find deals, how wholesalers think of different types of investors (flippers, landlords etc). They also didn't try to sell me anything which is a huge bonus.

There was also a lot of people from a variety of backgrounds. I have a great conversation with one guy who has been landlording for over 10 years. He actually finds all of his deals himself by browsing facebook, craigslist and other websites.

Overall would recommend.

2. Quest Trust Meetup:
https://www.biggerpockets.com/forums/521/topics/740282-texas-real-estate-educational-physical-meetup-for-beginners

This meetup was just ok in my opinion. To be fair, I arrived a few minutes late, but from what I saw there wasn't much of a meet and greet component to it, more of just a presentation on a platform they were selling.

I did get good learning and insights from the speakers who had an open QA where anyone could ask questions. After the presentation, a few of us had a good long conversation with the speaker.

I got the overall vibe and feeling that they were only there to sell you on using their platform which seemed to be built around the more passive investor who just wants to put money in and get money out.

With that said, I still met a few people from this meetup who I intend on keeping in touch with. That alone is worth going.

3. The Event in Katy
https://www.eventbrite.com/e/the-event-in-katy-tickets-69013458111

This was a great event that combined both meet and greet with a talk from an experienced local investor. There was also a good mix of wholesalers, investors and hard-money lenders.

4. Jet Lending Event (I'm planning on going to this):
https://jetlending.com/real-estate-investing/

A hard-money lender and investor I met with referred me to this event, so I'm going to check it out

I hope that helps highlight some good REI meetups for you!

This is great advice guys, thank you!

@Vijaianand Thirunageswaram Thanks for your motivation :) Being consistent in searching for a deal is definitely key. It's just a numbers game, and the more deals I come across and put offers where I feel comfortable with, the higher the chances I land one.

I think right now I feel some hesitancy because the market is super hot right now, and I don't want to be in a situation where I've tied up most of my money into a deal, and the market declines.

I've talked with a couple multi-millionaire investors who suggested waiting for the next market correction to begin acquiring properties because I'd be able to find them at a better deal. I know these people experienced 2008 and were unprepared, but are now reading signs that it's time to get liquid to capitalize on the next downturn (which could be 2-3 years).

I'd be interested to hear what you guys think on this. How do you guys minimize your downside and make sure that you're prepared for a market correction? 

@Mark Sewell I'd definitely love to take you up on that brewed beverage sometime.

I think my biggest concern with looking way outside of my area is the long-distance management. This would be my first investment property, and I want it to be a more of hands-on experience, not something I pass onto a property management company right away.

I work a full-time job too, so if something does come up, driving out to Baytown doesn't seem ideal, unless it's on the weekend.

Maybe these are just excuses I'm coming up with that have good solutions to them. I think the biggest challenge I'm facing right now is just finding a deal, but I think a big part of that is because I don't have my buying criteria well defined so I don't know if what I'm looking at (for the Houston area) is good enough or not.

The criteria that @Rusha Jayasuriya posted is exactly the details I'm interested in! What metrics are you looking for in a deal that makes it worthwhile for you to pull the trigger?

I'm looking to buy cash-flowing rentals in the Houston area, and I'd love to hear what target numbers and buying criteria others in this area are shooting for when deciding to purchase a rental.

For example:

- Rent should be no less than 1% of the all-in purchase price (1% rule)
- Property should cashflow at least $200 / month after all expenses
- Property should be located in North-West Houston area, or an area I'd be comfortable living in
- All in cost should be no more than 75% ARV
- Rehab must be medium to light, no tearing down to the studs.

What is your buying criteria, and are you meeting it in today's market?