All Forum Posts by: Mike Landry

gotcha. nothing wrong with that. I think a lot of CPAs probably see people who buy one house at retail and don't take it very seriously. if anything you'd think they would like another schedule e for another fee. I had the experience of trying to use a new CPA who owned a title company, was an attorney, and a CPA. guess what? she completely screwed up my taxes on my real estate. fortunately I found someone and switched before filling.

Maybe if an accountant sees a crappy investment.... it's a crappy investment. And they are trying to prevent you from buying another crappy investment at the top of the market. There is a reason people market to"absentee owners". Not saying you are but I see a lot of people buying some pretty bad deals justifying it with " tax benefit, loan payoff, and appreciation.

@Kevin Itima that not really the point. I've been very successful finding off market properties for %70 Arv. I'm really trying to find market tends and see what others have been noticing. The point is that even buying at 70% Arv less repairs doesn't really make that great of a rental because the Arv has gone up without the corresponding rent increase. The true profit on these deals is when you sell it and capture your equity (hopefully at %15 capital gains). rent increases are probably limited in the next few years. As landlords get squeezed with higher taxes and lower rents will that add to market correction? landlords selling adding more inventory, lowering values? just something to think about.

Curious to what others think about this market as it relates to SFR rentals. I've bolded my concerns. Basically sales prices are going up while inventory is increasing and rent is decreasing. Property taxes are going up without the ability to pass the cost on to renters. While the sale side of the market appears healthy it makes me question the long term trends and where we are in the cycle. On top of that interest rates have increased and added pressure on new rental purchases. My own numbers are telling me that I have to purchase a house at %70 ARV to even consider it for a rental. But then I ask myself why make $200 - $300 per month(net all costs) when I could make $20,000 to $30,000 just flipping it instead.

What are you guys seeing in your local areas: sugarland, Conroe, katy, clear lake, kingwood, willis, Houston, spring and surrounding areas. 

May 2017

Single-family home sales rose 11.5 percent year-over-year with 8,156 units sold;

Total property sales increased 12.3 percent with 9,744 units sold;

Total dollar volume jumped 17.4 percent to $2.8 billion;

The single-family home median price rose 4.4 percent to a record high of $235,000;

The single-family home average price climbed 4.3 percent to $302,362, which was the second highest level of all time (highest was $302,629 in June 2015);

Single-family homes months of inventory grew to a 4.1-months supply, the highest level since November 2012;

Townhome/condominium sales surged 16.5 percent, with the average price up 3.1 percent to $206,363 and the median price up 0.9 percent to $163,500;

Leases of single-family homes soared 31.0 percent with average rent down 4.2 percent to $1,779;

Volume of townhome/condominium leases rocketed 46.2 percent with average rent down 6.7 percent to $1,565.

@Jay Hinrichs  I haven't flown GA in probably 10 years.  I'm sure I'd flare at 50 ft and scare the daylights out of myself.  Thanks for the note tips.

@Patrick Desjardins Understand and I apologize for my "attitude". I honestly bought it after seeing multiple recommendations here and the words "How to buy" in the title. I did appreciate the sections on bankruptcy and how it can affect your notes. I am all for paying $$$ for education. It's just hard to figure out in the REI environment which programs are truly worthwhile and which ones are just some guru regurgitating a bunch of junk.

@Chris Seveney which programs do you recomend?  $500 seems reasonable.  

@Jordan P.  I don't blame people for hoarding their secrets.  Just don't try to capitalize on a vague book without much content.  I have heard this book "advertised" by friends multiple times on this website.  Yeah, I was duped.  

Funny how no one here hoards information on direct mailing lists, wholesaling, flipping, multifamily numbers, ect.  They actually compare what works and help people get started most of the time.  Why are you guys a bunch of note snobs? Are you afraid its too easy and the market would swing with too many buyers? lol

@Jay Hinrichs Thanks Jay. As a self motivator I am really just trying to learn this side of the business. I like the idea of diversifying and would buy a note if the right deal came by. But as an Airline Pilot with a career I enjoy and a great w2 I don't have to buy anything and only buy great deals. I checked out Chris above's website and he want to JV on deals that you supply ALL the capital for or just pay you a flat interest rate(not sure the %). Not something too appealing. He must have paid some guru to get the secrets.

@Patrick Desjardins  Proprietary data???  Now we are talking! More power to your buddy if he can sell a $2997 course.  In a book on HOW to buy notes I would expect at least one resource on HOW to actually buy a note.  Is that too much to ask?  Good for him for being successful.  That is truly great and I'm sure he busted his *** to get there.  Your profile says to just reach out if you have any questions on buying notes.  Ok.  Where do you buy your notes from?   Can you give one tip or advice for someone that is educated in real estate, knows and buys from the local foreclosures, and is intimately familiar with direct mail marketing.  Unfortunately the only value I can bring you is if you are interested in an aviation career.  Most of the real estate stuff I know isn't really top secret.  

Originally posted by @Justin DeCamp:

Zachary Taylor - I'm new to note investing as well, but as part of my research, I ran across Paper Profits by Joshua Andrews, which I found to be a good introduction to note investing. He includes a good deal of concrete metrics and advice that should answer a lot of your questions. It can be found on Amazon here: https://www.amazon.com/dp/B06Y4C7X6Y/ref=pe_385040.... PPR's introductory PDF is a decent starting guide as well.

  bought the book and thought is was pretty....basic.  Good for a beginner but I really didn't need a recap on stock market vs rentals vs notes vs ect.  It seems to say if you want to buy notes you should partner with someone that does it....but if I do that why do I need to buy the book?  What I was hoping for is that it would dive into how to FIND the notes.  NO one here or in the book really talks about how to FIND the notes.  As stated above the websites aren't a good place to actually buy a good deal.  I'm only assuming but if I were to take an educated guess on how to find good deals on notes you have to:

1.  Direct mail to private note holders.  Listsource data??  Out of state note holders? distressed?

2.  Pool other peoples capital to buy multiple notes from banks.  Making it worth the banks time.  maybe "wholesaling" the notes individually to investors, making a small split, and keeping the one/ones you want.

How are you finding NOTES to BUY!  That is some substance that I would expect to find in a book called Paper Profits: How to BUY and profit from notes.

Ehlert law. He is an investor too. Located in Katy. 

try ez floors on 105. It's a store but I always get my carpet there and they are professionals. 1.39 sqft installed. They have hard wood for 3.79 installed. 

i think in your example your true cap rate is much lower than 8. As mentioned above cap rate should include property management expenses. Maybe even capital expense allowances? Not sure about that one though. 

This is why I think the market is due for a correction. People are paying too much for properties and self managing to get a %10 return on their cash.  Or taking on the JOB of stabilizing a distressed property to get a %15 return.  No thanks. Not worth my time or money. But I'm keeping an eye on the market for when it does make sense to me personally. Those people that bought at those high caps will be in trouble when their loan is up or if they can't maintain their dscr. If they paid cash or put a significant amount down they'll be ok, but what an inefficient use of capital if you ask me.