All Forum Posts by: Bart H.

Before I write about my specific situation - I really appreciate any replies, thoughts, or comments in advance. It's a pleasure learning from everyone here. Please feel free to be as critical/constructive as possible, I down to learn.

I'm currently seeking an investment method that suits my goals, but am really having a hard time making a decision on how to start my investment portfolio. My goal is like most others posting here, to be financially free and generating a high income (min 250k/year) within the next five years or so. I will do this via buy and hold properties, and will work my way up to large multi-family investments. Eventually, I will flip some properties but I'd like to start with buy and holds.

I currently have around 125k to comfortably invest without draining my savings and will be keeping up with a decent savings rate each year (50k+). Here's the deal - I want to be as efficient as possible without skipping any steps that are crucial to my education in real estate. I've been studying and analyzing deals for about two years and am finally able to get pre-approval; I'm self-employed so it's taken a decent amount of tax prep to have my records looking good.

I'm having a difficult time determining what my first investment should be. Locally, I've been running numbers and MLS deals aren't fitting my criteria. I've spoken with other investors and it seems that off-market deals are best. I can't help but think about turn-key investments (specifically Rent to Retirement), but also know that I have enough saved to contribute to a syndication deal or have a more hands-on experience. I'm ready to dive in, but I'm nervous that I'll pass up a better opportunity - such a vicious cycle.

At this point, I could buy a property in cash, do a little bit of rehab (nothing too major for my first investment), and refinance it for a lower rate than I would have gotten with a traditional loan right away. Eventually, I'd like to work my way up to the BRRRR method at the @David Greene level. I want to start off strong, and while I know it's impossible to avoid mistakes, I want to do as much as possible to mitigate any poor decisions (anything within my personal control).

I would LOVE to start big and be a part of a syndication deal, but I want to be a partner, not the person running the show. For members who have participated in syndications, what was your experience and how did you become a part of the syndication? While being an accredited investor is one of my goals, I'm not there yet so it limits some of the investments that I'd like to be a part of.

Knowing what you know now, what would you have done if you started off in my shoes? My mind feels like it's hitting a wall. Logically, I know I should relax a little bit with this, but efficiency is incredibly important to me.

I am a month late to the party, but I will say this, get some experience as an investor in your home turf. Its really really difficult to invest out of state. Its also really difficult to do rehabs if you don't have experience in construction.

I kinda think your best bet is to start with a rental that is mostly move in ready within 30min or a hour from where you live/work. Learn what it means to be a landlord, set up your systems. Who is your accountant, who is your handyman. Who do you call for plumbing or electrical problems?

Use David greens method of finding a dream team. Identify a great realtor, then use them to help build out a team.

Don't be overly infatuated with "off market deals". Yes there are some out there, but you know what, most realtors who have them, have already shopped that property at that price to their volume buyers. If the deal is still there, its a high likelihood that its not a deal.

Some of the worst at the hype game are the big boiler room wholesalers that advertise they have 20-30 "deals" monthly.

IMO pick a neighborhood, drive it, go to every single open house. Have a realtor set you up on an inbox search of every listing. (or do it yourself on a platform like Zillow) That way you know the market better than the best computer program or realtor.

From baseball terminology focus on hitting a single with your first property. (I think investing locally is the least risky for most first time investors)

Then worry about things like rehabs, or out of state investing, or multi family etc.

Getting started is really important, getting a fantastic deal on your first property is less important.

1 Vote

Originally posted by @Ivan Loza:

@Tom Makinen But in a scenario in which a home’s value goes down to 5k would you rather foreclosure and loose your 20% equity? Or all of the funds poured into an all cash deal?

And well since my strategy is to hold regardless of the market, I’m not too concerned with rents decreasing in my city of Dallas, the fastest growing metroplex in America.

I do want to continue learning though, so if you have a list of risks involve with multiple mortgages that aren’t also present with cash offers please do share.

I know a lot of folks on this board push hard on the concept of OPM, or leveraging up as much as possible.

IMO leverage increases risks AND it increases losses. Its not just an always positive tool.

From reading thru the posts around here, the long timers who have made it thru a few cycles all seem to use modest to no leverage, and that allows them to either survive or to buy/make a killing during the downturns.

If you lose a house to foreclosure, and its not your primary residence, then the banks will come after you for the shortage. You might find your whole portfolio being pulled down if things get rough in the next recession.

We typically have been trying to buy about one or two properties a year. Get them stabilized (we typically do some rehab) and move on to the next deal. Now I will say we aren't finding anything we like at the moment in Dallas. But we are also content to sit on our hands until we find a deal we like.

I would rather go nice and easy and live another day if (when) we make a mistake, than to push all of our chips on the table on every deal we do.

Best of luck to you!!!

1 Vote

Originally posted by @Alan Zee:

I always list my rentals on Craigslist. In NYC, I see a lot of rentals asking tenants to pay the 1 month broker fee. Is this the same in Dallas Texas ?

This agent I met told me it’s more common for owners to pay broker fee than Tenant. My property is in a Class A neighborhood north of Dallas suburb. Just want to ask other RE professionals.

In Dallas the owner will pay realtors fees.

Prospective tenant would be charge an application fee for credit check/background check etc.

But typically a realtor will charge you 1 month rent for leasing out a place.

1 Vote

Originally posted by :

see image below

My property management company had to do an inspection from the city of Mesquite for it to be rented out.
I'm so surprised that the city is making me do all of these things. There was a crack in the window, so I'm replacing it. There's also minor things, some of which like trip hazard, etc. The biggest shocker is that the city is asking me to provide permits for work that was previously done on the property. Huge huge waste of my time and money on this property.

Lesson learned, always get an inspection from the city before you buy the property so as to understand what is going to be the cost of rehabbing it. Are other cities this strict

cc @Account Closed

We haven't ever done anything in Mesquite, but it has a reputation for being difficult to deal with. We avoid Mesquite for just that reason.

@Account Closed

0 Votes

Dallas, Texas

Originally posted by @Yash Ranadive:

Thanks Jonathan. I just got hit with more bad news that my inspection didn't pass. So I have to spend more money on this property :(

I don't know Mesquite as well as Dallas, but it seems a little on the small side. I might clean up the front a little, get rid of the weeds in the drive and maybe put in a little bit of landscaping.

Just out of curiosity, what didn't pass on the inspection?

0 Votes

Dallas, Texas

Originally posted by @John Collins:

I get that there are an abundance of people willing to pay high rent ($4,000 or more per unit) in places like NY, SF, LA, Miami etc. But what about midwestern cities like Chicago, Dallas, Houston and Phoenix/Tempe etc.? If the economy has some slight shocks, are those places going to be filled out a couple years down the road with all the cheaper options available in these places?

Any general opinions on high rental properties? The ROI compared to multiple lower rent properties as far as 10, 15, 20 year periods?

I think once you get much over 2,000-2,500 in Dallas you are pushing the envelope, because you get into territory where its cheaper to buy a large house.

I mean, yes there would be mansions, or super trendy areas that might command a higher price. We have a rental where groups of students have chipped in and leased a large house. and that goes for more, and has been reasonably easy to lease. But that's a location play (close to the school), and its laid out well for students.

But I think it gets tough to find renters much above that.

1 Vote

Originally posted by @Account Closed:

@David Olson

As an educational researcher, I always remember to not be data driven but data informed. Let the numbers educate you/give you insight but not control your decision 100% because you’d be amazed at how data can be controlled to spit out the info folks want to see. I have read so many real estate reports and charts but I know at the end of the day there is money to be made where there are opportunities (which is anywhere.)

Side note, check out ULI reports those are fun to read :)

Bree, fantastic insight.

I agree with you, I think there are opportunities in almost every market. Some might be more difficult to find, but there are always opportunities.

1 Vote

Originally posted by @Tommy Brownell:

@Robert Steele How tight is an otters pocket? LOL

Good quick read, considering I am a noob and doing my research on real estate investing and also live in the DFW area. I've had these same thoughts when running numbers on deals I have found thus far and it's a bummer!! Time to finish @David Greene book on out of state investing and see how she goes!!!!!!!!!!

If you are a noob, I would not make your first deal out of state. I know David Green and others are able to successfully do it. But almost everyone who successfully goes out of state has some real estate experience.

When you are brand new your biggest advantage is knowing the neighborhoods. You can physically spend more time than anyone else to know a 5 by 5 or 10 by 10 square block area.

There are 3 or 4 neighborhoods we know as well or better than anyone. IF a house comes on the market, we know to buy it.

I will also say right now, our biggest bog of a property is the first one we did out of state. Its a college rental that we bought thinking a family member would live there as one of many roommates. A year and a half later, we are looking for roommates.

3 Votes

Dallas, Texas

Originally posted by @Jay Hinrichs:

Originally posted by @Michael Lewis Lee:

Hello Elliot! I was in construction for about 30 years as a construction manager around Dallas Texas. You can spend $40 to $100 per square foot depending on your finish quality. You did not mention what area your in but I would concentrate what is in demand in that area. A general contractor in that area should know because pricing can be different in different parts of the country and the finish quality you want and depending if your goal is to rent or sell. Just do what is average in that area and in demand and not what you think. Use a G.C. or subs that are close and familiar with that area and the Building Inspector (how strict they are). Good luck to you!

it always blows me away that you can build for 40 bucks a foot in texas or 50.. simply don't know how you do that.

lumber Is lumber concrete is concrete electrical and plumbing.. permits.. I know permits vary wildly.. we pay 10 to 15 a foot just for permits. and a lumber pack on a 2000 sq foot home would be 25k or there abouts not including framing it LOL

our markets are low of 100 and high of 350 a foot.

We have been looking into it, I have been told its $110-$150/sqft.

I think our permitting is a lot less than what you are seeing.

0 Votes

Originally posted by @Marco G.:

Have multiple vacancies that need all new kitchen appliances. Home Depot comes out to about $1100 per set without refrigerator for stainless (range, hood, and dishwasher.

Anyone finding better deals?

Depending on the price point of your rentals.

We have had good luck at the Sears outlets. Typically can find some scratch and dent appliances. We don't necessarily try and keep them in sets, at least for rentals.

Sometimes you can find decent deals on home depot and Lowes returns.

We also have bought a few at Best Buy, but mostly for new.

I have recently heard, although never gone, that there is a Best Buy outlet in the area, might check that out.

There are also a couple of places that specialized in used appliances in the Oak Cliff area, but I don't have any direct experience with them either.

1 Vote

All Forum Posts by: Bart H.

Bart H. has started 11 posts and replied 1129 times.

Post: The Opposite Problem - Have cash to invest but can't decide where

Post: Retired in my early 30s! 🏝

Post: Who pays broker fee in Dallas Texas

Post: Class C Neighborhood - Should i rent to this tenant?

Post: Class C Neighborhood - Should i rent to this tenant?

Post: High rental values ($4k+) in non coastal cities

Post: Out of state investing = paralysis by analysis

Post: Dallas/Fort Worth REI. What happened?

Post: Spec House: Ballpark, What’s it cost to build a 2000 SF house?

Post: Best Deal on Kitchen Appliances in Dallas?