All Forum Posts by: Bill Florence

@Michael Noto Welcome advice. Thanks

@David S. Good advice. This is the kind of thing I need to hear. 

I have seen were the AC units are bolted down into concrete pads and copper water pipes replaced with plastic lines.

@Doug H. Good insights and much appreciated. For whatever reason I am trying to find a silver lining in C/D's or a model that can work. I started interviewing PM's who manage these things and have gotten some education. I think the biggest drawback is the high probability the properties will always be C/D and when it comes time to sell, the buyer pool will be limited to investors at little to negative appreciation. 

You are correct, C/D investing is not the same model as I run for A/B. It is a whole new ballgame.

I have to say the super cheap class D cash flow turnkeys I see companies marketing such as 2/1 30k homes with tenants and PM in place generating 15% ROI's are intriguing and even tempting. I know some investors go heavy into this market. I also know very well the unique and additional risks involved with these neighborhoods and what are typically vintage homes. But aside from obvious risks like the potentially higher vacancy rates and maintenance, I think a larger concern is years down the road when it is time to sell, where is the property value going to be and who is your buyer ? It seems to me the buyer pool will probably be limited to just other investors and recouping equity could be a problem. I would like to hear from others who have had experience owning (remotely or locally) and bought, held and resold properties in these types of turnkey programs. Would you do it again ?

@Mindy Jensen

Well I am signed in and all I see is the signup for the Jan 20th webinar for "generating 5k a month in SFH". That is all I see when clicking the link - a bug ?

@@Mindy Jensen the apartment link you provided goes to next weeks SFH webinar. Please provide link to the apartment webinar. Thanks

I understand the concern to not offend and politically stay in the good graces of the seller but I hear this not wanting to offend concern a lot and I don't agree it should ever be initially a worry - unless the buyer has an expressively shown (based on previous behavior, past transaction experience, etc) they are hard or impossible to negotiate with.  Some sellers will be offended at full price because they are expecting a bidding war and some sellers will be offended if you offer a dollar less because they don't like to negotiate. On the other you can offer some sellers pennies on the dollar, and they might shake on it. But I personally never worry about what someone else might think if I believe I am being fair and sincere. Many times the seller will know they are artificially high on ask and will respect a fair negotiation.

@Darren Eady@Charlie Fitzgerald

@Charlie Fitzgerald

Thanks. Was not aware of Delayed Financing option. Sounds like I need to find another lender, easy enough.

So I purchase properties for cash. I call my lender and ask to do cash out financing - no problem, lots of products available. But then I am told I have to season for 6 months. I know about seasoning for financed properties (eg first mortgage) but never expected to hear I have to season non-financed properties. I ask why ? Lender answer - "I dunno just the rules". Whose rules ? Why ? 

I personally follow the location x3 rule in that I only look for locations that have a history of stability and/or are positive transitioning. Investing in class C/D areas is your choice but you need to grapple with the risk/reward balance. Some risks being - buying cheap rental houses in questionable areas might mean when you sell in a few years your buyer market could be limited to other investors (not a neighborhood owners want to live in) and the ability of the property to maintain it's value, could be weak.