All Forum Posts by: Brian Briscoe

@Stacy Adams

So, like most people, I started with no property...  I decided I wanted to get into real estate in 2005-ish when I was still 20-something.  Drove to a bookstore, bought books about renting SF rentals, saved some money up, and a few years later bought my first investment property.  Second one came right on the heels of the first.  Lending dried up, and I paused for a bit...

Fast forward several years, I decided that SF rentals weren't creating wealth and income at the rate that I wanted, so I decided to do multifamily.  I had mistakenly thought a few rentals would magically make me wealthy and financially free...  By the time I was 40, I realized that SF didn't scale well and the idea that retirement was a long long way away kind of disappeared...  So, I bought books on Amazon, listened to podcasts, bought more books, listened to more podcasts, started going to REIAs, meeting people, participating in forums, coaching, etc.  Sold my SF homes to jump into multifamily.

Really, my goals didn't change much...  I wanted financial freedom from the beginning, I just didn't call it that.  My timeline changed and I finally realized I wasn't moving towards it fast enough.

Portfolio went from 0 -> 1 -> 2 -> 1 -> 0 -> 55 -> 88 -> 168.

My net worth has gone up more in the last 12 months than it had in the previous 12 years.

What are your plans and goals?  

If you're going to live there forever, look at the 3 other units. Whatever you contribute as rent will not affect your net income/expense... essentially, if you charge yourself $1000/month rent, it increases your bottom line by exactly $1000: out one pocket and in the other. What I don't know is what the tax implications are if you charge yourself rent. If you're using an LLC to hold the property and you're paying into the LLC... May be worth looking in to. I've never lived at one of my rentals so haven't put much thought into that.

I'm assuming that you're not going to live there forever... in that case, I'd run numbers both directions.  You'll want to know what upside to expect when you move out, but you'll also want to know whether or not you'll have to contribute any money every month to keep afloat.  Maybe you end up living rent free, maybe you pay some rent. 

@Phil Wells

People have been leaving the cities for years... looking at general trends. It’s not only from city to suburb, but it’s also from regions.

Can’t post the pic from my phone... but check out my favorite site for how populations are moving based on annual IRS data. Zoom in around DC where I live, and the migration trend is outward. Now, this is aggregate data, so if someone with $1m salary moves away from DC and someone with a $500k salary replaces them, it’s a net loss.

https://www.howmoneywalks.com/irs-tax-migration/

Pretty easy to see why I’m bullish on apartment investing in the Southeastern US. Money and people are GENERALLY moving from high to low cost of living areas.

On the micro level, most people are making shorter moves... it’s like someone else posted, from Manhattan to Brooklyn...

I'm a Utah grad and didn't get into the Carolina game until mid-20s when I met my wife.  I thought USC was a school in Los Angeles and I kinda snickered the first time I heard: "Go Cocks!" (wonder if this'll get through the filters)  Many years later, we have plenty of USC swag in the house... I'll even wear a Carolina hat.  My kids all side with Clemson because they always stay with my wife's cousin and she's a Clemson grad. 

@Zoltan Kalu @Kayce Tackett @Kenneth Mooney @Andrew R. Lucas - my company is also very active in South Carolina so it'd be great to connect with you guys.  My wife was born/raised in Lexington and still has family all around Columbia.  One of my partners is from Columbia and now lives in Wilmington; other partner was raised in the Triad and is now in Myrtle Beach...  

Areas around Columbia -- West Columbia to Lexington are growing fast.  Shandon, Five Points, or USC/downtown.  Harbison...  Ft Jackson also has a steady stream of renters....

@Zoltan Kalu - if you're OOS, you may want to consider upstate SC.  We have 2 apartments in Spartanburg and should close on an 80-unit in Pickens County soon too.

Most important question for anyone investing in SC:  Clemson or USC?

@Phillip Vera - we're also interested in connecting with investors in Georgia.  We've looked at a handful of multifamily in Augusta too.  We are also bullish on that city.

@Cody Smith - I didn't look at all the replies, so may not be the only one to point this out. You're military right? $20k and a VA loan gets you a lot of property with the reserves you need. You can get a VA for very little down payment, live there for a while, and then rent it out.

I bought my first investment property using a VA loan for $3k out-of-pocket. Sold it 12 years later and netted 6-figures. Not a bad return. Next duty station, I used an FHA loan to buy my second investment property - lived there a few years and then rented it out. This one took about $15k out-of-pocket and I walked away with 10x that amount 8 years later.

You can use a VA loan for a small multifamily too - so if you can find a 2- or 3- or 4-plex, go for it.

Typically, for an owner-occupant loan, you have to live there about a year.  PCS orders will reset your clock every time.

So, your COA now becomes: use VA loan to purchase a property with low out-of-pocket costs; keep money in reserve; pay off 1 of your 2 debts. Best of both worlds.

@Terrell Garren  thanks for your kind words.  Looks like you're also a vet, so I'm just following in your footsteps... maybe a year or two behind.

@Nathan Gesner

Just curious -- are the articles specifically multifamily?  Also, what are their cut-offs for reporting?  Our rent collections to be on par with prior months over 88 units in SC.  We're in secondary markets with B and C class assets.

Oh, one more point.... there were two separate contracts.  One for the master lease and one for the option.  

We got really close to signing a contract with a master lease with purchase option.  Our attorney had drafted up a contract and we had started to pitch it back and forth with the owner...  Halfway through the process, the owner asked: "How big of a discount do I need to give you to buy it now?"  Coincidentally, we should close on that property in a few days...  It's an 80-unit multifamily...

That's the sum of my experience with master leases.

Here's the outline of our agreement:

-We lease the property for 24 months. Our monthly payment would be equal to the average 12-month NOI.

-We had the option to purchase the property for a pre-agreed price anytime between 12-24 months.

-We would put a lump sum in an escrow account (the option price) which we could use to improve the property (property had 8 unrentable units - our plan was to immediately repair and lease those units).  If we chose not to purchase the property, he kept the remaining balance.

-Owner agreed to keep a certain dollar amount in escrow for potential capital expenses (this was the one point we were still negotiating).

-With the property improvements, we expected to raise the NOI by several thousand dollars per month, which in turn significantly raised the property value.

That particular owner was very willing to negotiate and actually prized himself at being able to negotiate creative solutions....