All Forum Posts by: Becca F.

 I'm a property owner on BP and a W2 employee (nothing involved with real estate). I've only been on BP a little over 2 years but my understanding is that when Josh Dorkin, the founder, sold BP, it started to change. I watch a lot of David Greene's YT videos and have messaged him directly and he gave me solid advice - if I'm going to buy outside of California, to go for appreciation states and look at the asset. That's come full circle because that's what I should have done  (no offense to anyone investing in the Midwest but I'm doing the slow exit out of Indiana, already sold one property).  I've watched very few of Brandon Turner's videos so I don't have an opinion of him. 

James, I watched your YouTube video referencing this post. I've spent a lot of time posting on the forums as in hours. I don't receive a dollar for any advice or for any referrals I give to agents, contractors, etc. I started to scale back on my comments, partially because real estate for me has gotten very stressful and I'm taking a break from buying anything. I get a lot of messages from investors in the Bay Area and I'm happy to talk to someone for an hour but as far as ongoing advice, I don't think I'm the best person to advise them since my properties fell into my lap pre-2013 (California and one Indiana property). I don't have time to mentor someone unless they want to compensate me, which I don't feel right about. 

Quote from @Jay Hinrichs:

or the opposite they don't really know the terms.. Like they want to file a Quiet deed

RE is becoming over run with OOS BRRR ROI COC etc etc.

This type of thing is very common though in Aviation there is an abbreviation for nearly everything you do in Aviation. TOD FMS VOR VLOC LOC etc etc.

To be honest I find newer investors come up with abbreviations I have never heard of and I have to query them as to what they mean.. 

 I didn't know what quiet deed or quiet title, had to Google that. 

I agree with that real estate is overrun by acronyms. When I first started posting on here I had to look up the definitions of Return on Equity (ROE), Cash on Cash Return (COC) and Internal Rate of Return (IRR). My investing journey literally started with properties falling into my lap pre-2013 so when I started hearing all these terms I was confused. Then I've seen more experienced investors on BP explain things using finance terminology and I'm not a finance major or work in any part of finance, trading etc - maybe I'm just dumb and am sharing two brain cells with my cat LOL

I am guilty of using LTR (Long Term Rentals), MTR (Mid Term Rentals) and STR (Short Term Rentals). From now on I will not use acronyms especially when responding to new investors. I try to post or comment in a way that a 6th grader can understand what I'm talking about.

Quote from @Mike Dymski:

Does that type of marketing actually work?  It's obvious and a big turn off to smart people (for them, it's anti-marketing).  It's all over the forums; so, it must work or it is just a waste of time for the poster and readers.

I think this type of marketing does work, sort of like the old school telemarketers. For every 100 hang ups or no answers, they might get one person who will listen to them and be able to sell them something. 

All the DMs from agents, licensed real estate and a few from disposition (something involving wholesaling??) agents, that I've received, they are always the ones to initiate the contact with me on BP. A few of the more "out in left field"  messages include someone double messaging me within a 24 hour time period asking if I'm interesting in investing in STRs - my answer is no and I think that's a bit aggressive, not even giving me a day or two to reply to the first DM. A more recent one is asking if I want to buy on the East Coast...no again. For the areas I may be interested in investing (Nevada, Arizona, and Sacramento) I have talked to a few agents. 

 I try to look past the sales pitches. I've learned very valuable information from the experienced investors on BP - some of whom I've talked to by phone or gotten on Zoom calls and they have saved me from making offers on anymore bad deals. 

@Samuel Koekkoek

I agree with the comments above on Option 1 or buy a single family home and add an ADU.

Option 2 with buying an townhome with monthly HOA fees and a high special assessment doesn't seem like a good option. HOAs can also put restrictions on rentals such as the percent of rentals vs. owner occupied. Most communities with HOAs such as townhomes or condos (also single family homes which have HOAs) or don't allow any type of STR, if you were considering that as a future option. If you lived in it as your primary home then wanted moved out and buy a new, you would be stuck if wanted to rent out this townhome.

Option #3 to move and pay even higher rent doesn't sound a great option. 

Good luck with your decision. 

Quote from @Priscilla Chin:

 Thanks Becca. In your experience,  what were the issues with class C?

The short version: looks like it will cash flow on paper but in reality with repairs and potential tenant issues it won't, very affordable purchase prices (Indianapolis range is $120,000 to low $200,000 depending on the Class C area or distressed properties under $100,000, many times older homes with sewer line and foundation issues, stolen AC units (get a cage for the unit), 

Class C is volatile. If you look through some of the posts on BP, you'll read many stories, specifically of investors from California and NYC buying cheap properties, frequently in the Midwest and South who have lost money. I asked a property manager in Indy how owners of Class C make money - he saidif they buy in volume, the good properties offset the bad ones. The question is will these properties appreciate enough to offset all the repairs and issues in the future? My opinion is that it's better to own 4 appreciating homes in good areas instead of 20 cheap properties. 

You can read some of my previous posts and I go into detail about my experience. A quick test is if you drove around the neighborhood, would you live there? Would you feel safe walking around? Are the schools good? If you're going to buy OOS, look at Class A or B and get to know those areas on a detailed level (fly or drive there multiple times). 

@Priscilla Chin

I invest in the Indianapolis metro area but I used to live there so I didn't just pick a random city. I rented out my primary home instead of selling it. It's in a Class A suburb (great schools, low crime) and has appreciated but I feel that property taxes are a big high relative to home value. I bought it in 2013 and it's doubled in value from 2013 to 2021. I bought Class C in Indy - I won't be doing that again. 

I don't know anything about Oklahoma City except that a few California investors I know are buying there. They're experienced investors and some of them buy sight unseen in multiple states - they have a high risk tolerance. 

Can you buy within a 2 to 3 hour drive of NYC? 

More scary things: sewer line and foundation issues. Get a sewer line scope and use that as a point of negotiation if you're the buyer. 

Horror story #2: while selling off one of the Class C Indianapolis properties, buyer asked me to pay replace the sewer line before closing... absolutely not...here's a partial credit (check to written out to contractor from closing proceeds so buyers don't pocket the money) 

That's crazy. I don't remember what Proposition numbers Prop. 33 was in 2018 and 2020. The way Prop. 33 is presented ("rent is too high") I could see people voting yes on it. As a general rule, I tend to vote against anything that favors rent control and will increase property taxes. I have 25 special assessments on my property tax bill, which I think is insanely high. 

Quote from @Jonathan Greene:

Here is the recording of me and @Remington Lyman discussing the issue like two fully grown adults.

https://fathom.video/share/MNscSw4vQsx65fmzexEsuTDk7CJB5QLU?...

 After watching that recording, I'd add that I have a lot more  respect for Remington than I did before.  I previously grouped him into the Columbus agents who seem to comment on every new investor post, especially the California investors. I get DMs from these new CA investors who don't post on the forums - I feel that they could get much better advice from many of the more experienced investors on here.  Maybe they're afraid of sales pitched which is why they don't want to post publicly or just don't want their names on a public forum?? I try to help them the best that I could. 

I agree with the comments about how the gurus keep pushing the 1% cash flow narrative which is why new investors gravitate towards this. I don't run a real estate brokerage and I'm not an agent so I don't know enough to comment about that industry and who should be fired, etc. 

Wow this thread has gotten heated. 

Quote from @Scott Allen:

@Becca F. You should visit Columbus if you're interested in the market (you should visit any market first prior to investing there if you can make a weekend for it). I always recommend clients to come here first and see neighborhoods in person if they can prior to making offers. You get a better sense of where you're investing and what all is going on in the city in general. A main thing that everyone should always do during their inspection period on a property is connect with at least 2-3 different property managers so they can get a better rent range/run numbers more other than listening to an agent that might not be as conservative in their numbers on projected rents. 

In Columbus, C Class properties are typically the 1% Rule and can cashflow more but it's highly recommended to not try and self manage them - use a property manager that is well versed in getting those units filled or kept on tract, post notice if necessary to prep for an eviction. In a gentrifying area, you can also find BRRRR's and flips - if the value is there, it can be worth pursuing. A Class properties - you usually don't need a property manager, you just need a leasing agent and contacts to call if something needs fixed/as well as the ability to be cashflow negative for 2-5 years. B Class properties - they usually can breakeven on paper, don't necessarily need a PM but if the deal can still work with them, then they're beneficial to keep on.

Are you self managing a C Class property in Indianapolis or did you need to find a property manager/leasing agent afterwards? Prior to investing where you did in Indianapolis, were you able to visit the market first or did you go based off of neighborhood graded maps and opinions from agents/property managers. I've heard it's a really good market for cashflow but don't personally own anything there. All the best!

I used to live in the Indianapolis metro area then moved back to California so I knew the area but not on a detailed level. The Class A home is in a great suburb and I rented it out instead of selling it. It's done well with appreciation over 10 years and is still cash flow positive but my property taxes are a little high relative to home value.

I went off neighborhood maps and opinions from agents and other investors (one local and the others were in CA) for the Class C homes. I flew out there and did drive around the neighborhoods - they look much different in person than in photos and video tours (I do know a few CA investors who buy sight unseen in multiple states but I think their risk tolerance is higher than mine). I interviewed PMs after I went into escrow on Class C#1. I don't self manage any Indy properties - it was going to too much work screening tenants, showing the property and coordinating repairs from 2000 miles away with a demanding W2 job. I self manage one local SFH (Class A) here that I'm about 15 miles away from - that's enough self management for me.