All Forum Posts by: Brian Turnbough

I used to get the same reaction from friends and family. The people that bring up the simple problems like plunging toilets or bad tenants are typically the people who do not like confrontation. It's easier for them to do what is expected of them. Even a CEO of a fortune 100, 500, or thousand company can have that fear. Your friends that earn a good living and have all of the toys, do it because that's what they enjoy. When I used to talk to a group of friends or family about real estate only about 1 in 10 would listen or ask questions. Now that I have proved to them that I know what I'm doing, most of them listen and ask how they can join in on a deal.

I think of a new real estate investor like a:

New christian, now that they have found Jesus and learning a lot of, new to them, things about that religion everyone that doesn't join in is going straight to hell tomorrow.

Newly wed, trying to teach a couple that's been married for 20 years how they should treat each other.

My point is you have to prove yourself to them that you know what your doing before you can get anyone else to join in the fun.

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That is a great book. I have read it about three times now and have picked up different things to try each time. The one thing you need to ask yourself is why do you need their money? Real estate is about checks and balances. You can't convince someone to give you their money until they know you can control yours.

With that said, you are in a great market to make a lot of money. I am from Houston myself and know the potential there. Try doing the flip and rental calculators on BP. They are good tools to see if you can make a deal work on paper. The Southwest side of Houston is a good place to start looking. If you can get one done and show them how well you did, they will be throwing their money at you.

Good luck!

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One thing to think about is, that property is going to bring down the value of your property. So if you can get it and rehab and sell around 150k you will improve the value of your property. When determining what you can get always look at the lower estimated value. But hope for the higher value.

If the house is condemned and has to be torn down then, I would tear down and sell the land at improved land value.

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I am looking for the suggestions on the best financing solutions with the seller financing 50% of the loan.

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I'm in a similar situation. My wife's grandmother is 86 and needs to move over to assisted living. She wants to sale her home and I think it would make a good rental for us.

She has about 50% equity in the house. My plan is to finance conventional through bank to cover her 50% and plus about 20k cash and she will take back a note for the rest of her equity. The rents will cover both payments plus cash flow after capex about $200 a month.

1 Vote

You probably wanted to see the property anyway, right? Now you have a good excuse.

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Originally posted by @Daryl Askew:

I would leverage that 1million and buy a 3 or 4 million dollar apartment complex rehab it and bring the value of it up and rent/ and or sale complex once the rehab is complete and tenants numbers are higher

Wash, rinse, repeat. Sounds good to me, where would you get the leveraged money from?

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At least she is letting you know. If you wanted to make it hard on her and yourself for that matter, you could prorate the rent. Charge her for the days she will be in the property. She probably won't pay though.

1 Vote

Originally posted by @Shane Hedeen:

If I had a million dollars (think we are all assuming these are already post-tax dollars for the hypothetical...) - I would first clear myself of my student loan debt. I would then want to take care of my brother's student loan debt as well, as we both are products of the overpriced, high-interest era of young college grads. After that, like most folks on here I would invest a chunk into RE. Buy myself and my soon to be (knock on wood) fiance a modest, but nice place free and clear. I would then begin the BRRR method in my region with some buy and hold properties, to use bank leverage at a modest level while building equity and cash flow through long term rentals.

A subsequent question I am trying to set goals and plan for, similar to this one @Brian Turnboughbrings up would be -

What would you do if you could build your annual net income (post taxes) to $1,000,000? Awesome to think about. Thanks for opening up the post Brian!

Shane, sounds like a good plan. Gotta take care of family.

One mil income, probably move over to @Jay Hinrich side and be a lender.

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Originally posted by @George Gammon:

Originally posted by @Brian Turnbough:

Originally posted by @George Gammon:

Originally posted by @Russell Brazil:

@George Gammon is DC still viewed as dangerous outside of our area? I very rarely feel unsafe anywhere I go in the metro area,

Hey Russell, I'm not sure? I'm basing that on statistics from a few years ago, in the actual district crime was very high. I also lived in Rockville for a while and when I went into DC there were places that you just didn't want to go (things may have changed)?

That said, I had an office in King Farm and in Tysons Corner and both those area were awesome.

The take away for me is whether it's the US, Colombia or xyz real estate is local, not just on a city level but a neighborhood level.

George, I like the info. You must be an Investor Without Borders

I just allocate capital where ever I feel I can get the best return Brian. When I was in the business world I made a lot of money overseas so I don't see international investing from a base of fear (like most americans), I see the opportunity. I've also lived in Australia and Singapore so investing in foreign real estate was much more natural than "outside the box" for me.

Finally, my primary reason for investing in real estate is rarely real estate. Typically it's a way to take a hedged investment in commodities or currency. Using my current investment in Medellin, Colombia from above as an example...Just like a flip in the US, I look to be all in (purchase and rehab) at 70% ARV. That gives me about a 30% return (I'm all cash but theres closing costs) if I flip, and about 10%-12% cash on cash return if I rent it out. These are numbers we all understand. But what's a little different about what I do is that return is my buffer, or hedge, against my primary investment thesis going against me.

My primary investment thesis in Colombia is oil increasing in price over the next 2 years not real estate. The Colombian peso has a strong tie to oil and my real estate is denominated in pesos. If I'm right and oil increases in value over the next 2 years I'll make money off the equity from the rehab, cash flow from the rental and the currency appreciating. If I'm wrong and oil goes down, I have the gain in equity and cash flow to cancel out my loses in currency. Right = home run...Wrong = break even. And also remember oil's at $30 and it can't go to zero but it can go to $150, so your downside is very limited and your upside is huge. It's a very common asymmetrical trade hedge fund managers look for but it's expressed through real estate.

The reason I've explained this at length is I strongly suggest other real estate investors look at their investment from a non traditional approach. Not necessarily by investing overseas (that's not a good idea for most) but right in your back yard, where ever it is you invest, it's a principle that I believe can be utilized to increase risk adjusted returns anywhere... Maybe that makes me an investor w/o borders, I'm not sure?

George

Thanks George, the more information that you give, the better the choice we beginning investors can make.

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All Forum Posts by: Brian Turnbough

Brian Turnbough has started 7 posts and replied 139 times.

Post: Is it a waste of time talking to others about investments?

Post: What would you do with 10K?

Post: Buy Neighbor's House and Tear Down?

Post: Best financing with seller financing 50%

Post: Hard Money loan for Rental

Post: Tenant Leaving 3 days after the end of the month

Post: If you had $1,000,000 in cash, what would you do?

Post: Tenant Leaving 3 days after the end of the month

Post: If you had $1,000,000 in cash, what would you do?

Post: If you had $1,000,000 in cash, what would you do?