All Forum Posts by: Christopher Labonte

Good morning fellow BP members!

I've written a few posts, so I figured I'd catch anyone who cares up, and maybe get some other points of view on what I have going on right now.

ReCap- I bought my first rental property, a 4plex about 2 months ago.  Its finally at break even with 3 units filled.  I'm not too worried about the last one yet, I still have plenty of time to fill it.  I still have a bit of downpayment money left over so I'm gonna buy another 1 or 2 (depending on the deal and leverage).  

All that being said, I was in Colorado at a festival a few weeks back.  I stopped in Denver and was talking to a friend about what I'm doing and hes told me hes interested in throwing some money my way.  Once we parted ways and I was at the festival, he had a wedding to go to.  There, he was talking about what I told him to someone, who turns out to be an investor out there with a large amount of money available.  Obviously once he called, I became very excited.  I went into overdrive the last 2 weeks.  I became even more serious about locking down some properties so that I could demonstrate what I'm doing, as well as get the groundwork laid for the process.

Unfortunately, I'm having some problems.  For one, my friend/potential partner is nearly impossible to get on the phone, and I have to constantly bug him about the big investor and setting up a time for us all together.  I even had a property that we were suppose to buy together.  We ended up deciding not to, however it was 1002994889% more stressful because I couldn't get any of the information I needed from him to include him.  Now, I understand he has to work and is in the middle of buying his own house, but as far as I'm concerned if you want to be included in this stuff then you need to pick up the phone.  For that reason, even if when hes finally "settled" I'm not sure I'm interested in having him be a part of anything I'm doing.  Just doesn't seem like a good fit.  

This creates another problem- I'll loose contact with the potential investor.  The research path I followed to get ready for the investor wasn't wasted though- I now have the ground work of an actual business, and I can see the way to create it.  I'm in the middle of creating a business plan and researching funding options to replace the potential investor so I don't loose my momentum.  I'm currently looking at a small business administration loan of some such.

I was wondering if anyone had any experience with what I'm trying to do and if there are any tips or things I should avoid.  As always, I'm also looking for any input on my situation or decisions thus far.  I love having a discussion, so please don't hesitate!

Hey all!

Man am I excited, I wont get into the details on here though.  For that youll have to check out my page and see what I've written about!

So for all you with 0 experience to the pro's, I have a really basic question.  

I'm in the middle of creating a business model, defining my business, and doing all the leg work to secure financing for it and what not.  I've caught the bug, and I'm starting to get real creative with getting funding.  Not only that but my network is expanding quite a bit and I need an organization to catch up.  The thing that I'm struggling with is the name.  I know, pretty lame.  However it is the face of the company that everyone see's.  Ive got 2 on my mind, but I'm open to opinions.

1) Frontier Real Estate Services

2) Frontier Investments

I'm sure everyone has similar ideas on how and what the organization will do, but so we are on the same page ultimately Id like to be a one stop shop (not necessarily a brokerage though).  I want to buy houses, sell houses, and once it gets big enough and automated enough I'd like to manage the properties in the "company portfolio".  If any one has suggestions or anything, that would be great!  Thanks everyone!

@Claire H.

I’m so glad you think so! I really believe and have a pretty good grasp on the philosophy behind investing, especially in real estate. I have A LOT more to learn though. 

You wouldn’t happen to have any suggestions based on my last post would you?

@Erica Shaunta Thompson 

Closing was a little rough. They didn’t make all the repairs agreed on in the  contract and the ones the did were...shoddy to say it nicely. Here it is over a month in and and work just got done and took my realtor theatening them with small claims court to get then to do it.  The sellers realtor was very lazy. 

Positive note- property management in place and 1 new tenant placed bringing occupancy to 50%

Unfortunately it still is 50% vacant. My question I would lose to the inter webs is should I be worried? The current rent covers the bare essentials. Mortgage, insurance and taxes or all covered as well as management. But there there is a small utility cost, and that doesn’t allot money to vacency or maintenance. What should I do? My manager tells me that around school starting the market lulls and picks back up after. But what should I be doing to ensure my manager is doing what they’re suppose to as well?

@Stevie Delacruz The principals I’m talkin about are fundamental thing everybody tend to end up doing to be successful. For example a lot people specifically talk about times and amounts of money to say and when to spend it. I’d say that’s a pretty easy thing to understand any apply. Same goes for levels of income to save. But it’s also all subjective to what levels you set things at. But while your in college you have a lot of wiggle room to make mistakes and bounce back, like I was saying in my original post. So if while your in college along the way you pracrice the principals I was talking about above (fiscally responsible, reasonable rational decisions) then when it comes time to actually starting to invest you have good decision making skills

@Ben Payano Now I’m not very experienced, but my first impression is—just do the simple math. How many months of negative cash flow does it take to absorb that appreciation. I would then look and see if I can project what it will appreciate to over the course of the negative cash flow holding period. This will give you a somewhat accurte view of what I would a “viability period” where you know how long you have until this property has not made you any money. Depending on the rates of rental increase and appreciation, it could eventually turn into a profitable investment. But there are a lot of what if’s and how longs’ I don’t know anything about that market, but generally speaking if it costs money every month, every month you hold on to it you loose equity that could be used todayfor a better investment. Couple with with the time value of money, depending on your specific situation of coarse (I don’t have all the details) I would cut my losses and move to greener pastures. Again, there are a lot of variables. Maybe the area will turn around, is it just in a lull, is population increasing, what do the demographics look like, what are he cap rate trends (market growing or shrinking(aka supply and demand)). Just food for though, hope it helps. And of coarse if I’m wrong about anything please correct me

@Stevie Delacruz Hey buddy! I’m Chris and I’ve pondered that question quite a bit. And I’ll tell you what I tell everyone. There’s no better time then now. I don’t wanna get too into the weeds into the post with my limited experience, but from what I have read and experienced there really is no better time then now. You are only goIng to set yourself up earlier then everyone else. I’m 27 and just getting started. That means that by the one your my age you have a huge potential. Even if you can buy just 1 door a year, you’ll have 6 by the time your my afar and I just got my first. I’d also say yes because although you have limited finances, you also have the least amount of personal expenses you’ll likely ever have in your life. Cell phone, car insurance, and maybe a budget for gas and food. So, if you can learn and practice solid principles and small scale, then later you’ll just be able to scale up. On top of that, have to work harder to find deals that works for your number as well as finding money instead of having a big bank account will only have you put together bigger deals faster. Just my thoughts though. Feel free to message me, I can talk investing and real estate all day.

@Justin Cory I tried tagging you in my initial post but it wouldn't let me.  Your the "shadowy figure" I was referring to in my original post.  Talking to you helped me so much, making me feel more comfortable and confident.  Thank you, so much for helping me.  I wouldn't be here without you, or BP.  

@Bryce Stclair I'm interested in doing stuff like that, but I gotta start small and get this one off the ground.  Maybe do 1 or 2 more multi families before I can start branching out and doing that kind of stuff.  

I certainly try to have the principals down.  I spend a lot of time reading and listening to develop them.  Lots of little things to keep in mind, as well as having a confidence factor. 

I did decide on a property manager.  Although my realtor was mediocre, she did give a great insurance recommendation.  I had 2 property managers in mind.  1 was "Real Property Management", and they were squared away.  Very professional.  Only problem was they wanted 10% to manage and 1/2 first months rent to lease.  A little steeper then my research down near Clarksville TN had shown me what was the "going" rate.  Now I know that goes with the market.  My realtor did recommend a company "Property Pros" and they were 8% to manage and 70 bucks max to lease.  Much better from a cost perspective.  Im gonna give them a shot.  They have good reviews so we'll see. 

And the property is a 4 unit-- 3 bed, 1 bath.  The layout is definantly strange but hey they say 795 is fair and seem pretty confident about filling the units at that price.  worst case the numbers still work at the 675 the one rented unit is paying.

Good Morning everyone!

I'm a huge fan of networking, BP, and comradery so I thought I might be able to help someone by posting my journey thus far. 

In my new member intro I went into my backstory and goals a little bit so I wont waste time on that.  Since about March I had been looking in the Clarksville/Nashville TN area for any sort of multi family home.  It just made the most sense to me, and the best way to achieve cashflow.  I ended up connecting with a BP member on the forums who was local and we ended up meeting for a couple hours.  Hes been an investor/real estate agent for 10 years, and now had his own brokerage and property management company.  Definitely goals to strive for.  But he gave me great tools and information, as well as taking a lot of time to let me pick his brain.  There are so many little things about this that are not complicated, but so numerous its mind boggling.  

Through him I offering on properties, but every one that I offered on had multiple offers and I always lost.  The numbers barely made sense at asking price.  So even when I wanted to get my feet wet and offered full price, I'd still loose out.   I kept looking and kept offering, but still nothing.  So I could take a break or hope that something happens, or I can attack the problem a little different.  I've attended the webinars for BP and they always look at properties in random places.  So I figured why not do that, but do it for places only an hour or 2 away.  I started my research and that first night I found 3 properties in Evansville IN.

2 were more attractive on price, but not in the best shape.  They needed some work to bring them back up to their former glory.  Only one problem; even though they needed 10-12k work the sellers weren't budging on price.  They were both 150k, and it didn't look like after the work that was a price that would really give me a return I was interested in.  Now the other property was 240k, however all major items were 6 years old.  Now I have no problem getting my hands dirty and I'm not afraid of having to fix a property.  But for me, numbers are everything.  The effort I'd have to put in the 2 properties just wasn't anything worth while compared to the 240k property.  Maybe for a second or third investment, but not the first.  I need some practice with something "easier" before I go full bore.

If you've read "The richest man in Babylon", it says that a good investment is one where your principal is safe. During my research stage I got lucky and the property price got reduced to 229k! I was pumped, I didn't even have to negotiate and bam the deal was already better. After running the numbers, looking up rents for the area, census data, and calling property managers to confirm my findings it looks like best case it could rent 800 per unit, and worst case 700. Best case cashflow is about 800 dollars and a 17% COC return. Worst case it cashflows 600 dollars and returns 13%. My benchmark for COC return is -- better then the stock market average. So looking at that, it looks to me like a pretty decent first investment. With the principal is safe and major items fairly new, along with cashflow I'm pretty please.

I close on it Wednesday the 18th as of now, and even though this was a long process I really feel like this is going to rocket me onto the path of financing independence and a better quality of life!