All Forum Posts by: Ben McMahon

I've been helping Real Estate Investors get started for years.  My current time commitments allow me to take on a few more people that love real estate investing and want to build a successful business.  Helping people grow their business is what I love doing which is why I am currently doing it at no charge.  If you are interested in getting serious about growing your business and making money in this industry I am here for 3 more people.  

Please only reply if you are committed and truly want to make this happen.  

@Shevon Coorey I agree with the others.  I would also add that areas with higher volatility tend to yield bigger gains and losses as the market moves.  For example, my wife is from Fargo ND.  Had I bought a house in 2006 for 100k and lost 30% of the value when the market crashed I would have lost 30k in equity.  If you bought a house in Santa Clara for a cool 1mil in 2006 and lost 30% than you are looking at a 300k loss in equity.  The converse is true on the gains.  

Obviously theres markets and neighborhoods that are in decline and ones that are on the rise.  Talking to locals you can figure that out very quickly.  Find what you are comfortable with, build your team, do your homework and you will be fine.

You should be able to get it priced out pretty easily in your area.  I had a duplex once with separate electrical, but shared water and sewer.  It wasn't overly complicated to ask the town for the average cost and just split it in two.  I would def make sure you pass the cost on to the tenants though.  

Thats a very lawyerly question to ask Laura! 

Hey Sharon, 

     Very exciting that you want to get things going.  I have a few thoughts.   

1) Make sure you really know what your goals are getting in.  If your goal is to acquire rental properties and hold them for 30 years and retire on the cashflow than I wouldn't worry too much about any crash.  If your goal is to buy and flip it in 3 years than you will have a far different strategy.  

2)  Real estate is the same in Kansas City as it is in the Bay Area.  A 3 bed 2bath still has 4 walls and a roof.  The only real difference is the perception of value.  Its actually more similar to stocks than people think.  Its the perception of value that dictates the stock value of a house in the bay area vs a house in the suburbs of Kansas City.  Housing Stock prices are going to go up and down depending on the markets. 

 So look to minimize your downsides and maximize your upside.  Figure out what your risk tolerance is.  If you are a high risk, high reward investor, than flipping houses in the bay area might be right for you.  I would even go so far as to label difference areas of the country on a risk reward scale after you soul search your risk tolerance level.

3)  Out of state investing - Theres no reason to think that out of state investing can't work.  What you will need are systems and procedures to insure that you are not getting yourself into trouble.  Personally I have never bought a property without looking at it with my own eyes.  I dont know that its necessary to do that if you are buying a ton of property, but if you are only buying one, than thats going to be your baby and you want to know everything about it so you can learn as much as possible.  

You are also going to need that team, and a face to face with some property managers and contractors is going to be the best way to do that.  Again, its not a necessity, but it will minimize your risk of getting screwed.  

Side note- I was in Kansas City a few months ago, and I was shocked at the amount of derelict property.  Be careful where you buy.  Getting a lemon on the first one is a drag

Sorry, I am just getting back to you on this.  Somehow got missed.  @Ricky Sabogal

What I mean is there is a lot of gray area in some of these rehabs, and unless something is specifically mentioned in the contract, it becomes a matter of "whats industry standard".   Your expectation might be different than the contractor.

Generally both parties have insurance and all that, but there is shared liability in the project.  If you decide not to pay him, thats a liability.  If his carpenter slips off a ladder thats a liability, etc.