All Forum Posts by: Corey Conklin

My first question is why did a cash flowing asset lose it's cash flow? You haven't provided enough information on that to allow specific advice.

If you purchased the property in 2020 you should still be at a good interest rate (assuming a 5 year balloon ARM). I know taxes and insurance have gone up a lot in that time so I understand that problem but the solid rent increases in that time have been able to cover most of that (at least for me it has worked out). Have you not increased rent?

Have you had larger Cap Ex projects that you didn't anticipate? Roof, HVAC, sewer, etc.

Has the property been poorly managed? i.e. longer than normal vacancy, bad tenant screening, poor maintenance, skipped rent payments, etc.

There could be a handful of reasons why it lost it's ability to cash flow. Instead of dumping a property that isn't cash flowing I would understand why it isn't cash flowing. If it's something that you have caused then it needs to be corrected. If not you'll just 1031 into another property to fall into the same trap.

Quote from @Jared Leggett:

Quote from @Corey Conklin:

I know that moving away from home isn't what anyone really wants to do but in your situation it would absolutely change your life, financially (and for the better) if you left.

Again, I don't know your situation but I can tell you that a sanitation worker in a small town in Kansas (town of about 12,000 people) makes more money than you do living in NYC. The cost of living is probably 1/10 that if NYC too. I'm not saying you need to move to small town America but I wanted to give you a comparison.

The only way I can see you staying in NYC and looking to invest in real estate is to find a way to make more money. Learn a valuable skill set that will allow you to make more money, therefore have more financial flexibility. This will cost time and money and can be just as difficult as moving away from home.

If you want to make it you'll need to do some hard things and make some hard decisions. It's up to you to decide what "Hard" you are going to choose.

 yes I definitely see that I'm going to have to make some difficult decisions, just not sure what I'm willing to sacrifice. There are so many different routes to real estate that I can take but I cannot tell which would be the best for me. Thank you for the insight Corey, definitely gave me some things to think about!

 @Jared Leggett Also remember you're still really young. Stay patient, work hard, never stop learning and focus on helping other people. You do that and success will be inevitable. 

I wish you the best of luck on your journey!

I know that moving away from home isn't what anyone really wants to do but in your situation it would absolutely change your life, financially (and for the better) if you left.

Again, I don't know your situation but I can tell you that a sanitation worker in a small town in Kansas (town of about 12,000 people) makes more money than you do living in NYC. The cost of living is probably 1/10 that if NYC too. I'm not saying you need to move to small town America but I wanted to give you a comparison.

The only way I can see you staying in NYC and looking to invest in real estate is to find a way to make more money. Learn a valuable skill set that will allow you to make more money, therefore have more financial flexibility. This will cost time and money and can be just as difficult as moving away from home.

If you want to make it you'll need to do some hard things and make some hard decisions. It's up to you to decide what "Hard" you are going to choose.

The best way to leverage 80k in this industry is based off of your skill set.

Are you handy? have a construction background? Do you have property management experience? Do you understand the in's and out's of the market you wish to invest? Have extra time to spare working on the business? Have banking or insurance connections?

If you are just a warm body with 80k and no applicable skillset, I wouldn't bother. Sweat equity is the best way to grow in this industry with that amount of money. If you don't wish to (or have the time to) roll your sleeves up and do some grunt work I would just stick to traditional investing. Don't let people tell you that this business is passive for someone in your situation, because that's not the case. 

How you buy the deal isn't always the most important piece. Making sure the deal is a good one is the most important piece. If I can buy a great property at 70% ARV I'll buy it with cash all day long knowing I can refi out of it and get my money back.

I used to think that cash flow was the most important thing when buying real estate but really it isn't. Finding ways to recycle cash/buy equity is the name of the game. Find ways to get your money back out of deals! Obviously don't buy a deal that will put you in the hole every month but don't expect that you are going to be good on $300/mo. in cash flow either. One major repair and that's all wiped out (I see people gripe about that all the time)

The best use of your money is to find ways to make money from it. i.e. Find deals where you can by $1 with $.75. If you do that you'll be successful.

@James Kerson

You've stirred up a lot of agents haha.

I'm with you on your intent of this post. Things need to change. This current model isn't where we should be in 2024. Unfortunately there are a lot of agents who will fight this issue hard as you are attempting to threaten their livelihood. They'll fight even if it is a detriment of buyers and sellers of real estate.

Good luck and keep fighting the good fight!

Quote from @Jim K.:

6. "Work on your business, not in your business." First, know your business. You can work on ignorance only so long before it breaks you into little pieces.

I've always despised this advice.

Sure, I get what they mean but the message has trickled to the wrong people. Now new real estate investors or those who want to invest think they need to "build a team" in order to buy their first SFH.

If you aren't handy, don't understand construction/PM, lending, insurance, and real estate law then that needs to be your focus. That means you need to work IN your business not on it! If not, you said it great, ignorance will only go so far before it all comes crashing down.

We need to know our business by working IN it, once we do that we can starting working ON it.

The best month to buy? Last month. The best time to buy real estate is in the past. That means the longer you hold out the more you'll end up spending.

I've bought properties in any season and it really doesn't matter. Sure there may be less buyers looking to move in the winter but that is a 2 way street. Meaning people don't want to move out of their home either, so the supply is also lower.

Do your homework on what sort of house you need, what area, etc. and buy what works for you. Don't worry about what anyone says about there being a good time to buy because it's nonsense. Time has always been good to real estate.

I know a couple that bought a 2500 SF home in the 70's for less than 50k and still live in that same home. They thought they overpaid at the time. Well, they aren't thinking that today.

Quote from @Peter Tverdov:

Quote from @Corey Conklin:

I would focus on creating a business that provides the best service for your clients. The end game is for you to be the only client. That being said, this would ensure that you have a great service in place to manage your assets once you have hit that milestone.

I would use low pricing as an opportunity to try and get clients in the door. All while striving to provide better service than any other PM in your area. If you do that you'll have plenty of leads hit your door step and it will give you a great opportunity to dial in your PM business operations.

 Don't necessarily worry about the profit of the PM company, remember your end game isn't to be a profitable PM company, but a profitable real estate developer/investor who has built a great PM company to maximize returns on your own investments. If you sacrifice short term profitability on your PM company for the long term benefit of building the PM company that will manage your future portfolio it should pay off.

 No offense but do not follow this advice. Low pricing and don''t worry about profit? That's not the right strategy.

The truth of it is finding GOOD PM client is hard. The low price clients who have roach motels never want to fix anything...you don't want that. They will suck up so much time and resources and burn you out and/or your staff.

Focus on quality. That's what we are constantly striving for. Good clients who trust us and treat us right, good properties. I did a NARPM podcast earlier this year about that actually. We grade our entire portfolio each year A,B,C and F. Grade the owners, the property and how much time they take. 

I have to say we have less and less Fs each year and this year we actually shrunk 20% in door count but revenue is the same. So we brought in more QUALITY and either got fired or fired the crap clients and we feel very efficient.

 I didn't say go after the crappy, class D properties. I said offer great service at a low price to entice people to use his company as the PM. Class A and B property owners are just as concerned about the management costs as class D property owners. If he does that he will have more than enough leads coming his way.

It's also important to understand that he doesn't plan to manage for 3rd party clients long term. He just needs the clients today to get his operations dialed in for his own portfolio. The sacrifice in profits of the PM company today will help him in the long run.

I would focus on creating a business that provides the best service for your clients. The end game is for you to be the only client. That being said, this would ensure that you have a great service in place to manage your assets once you have hit that milestone.

I would use low pricing as an opportunity to try and get clients in the door. All while striving to provide better service than any other PM in your area. If you do that you'll have plenty of leads hit your door step and it will give you a great opportunity to dial in your PM business operations.

 Don't necessarily worry about the profit of the PM company, remember your end game isn't to be a profitable PM company, but a profitable real estate developer/investor who has built a great PM company to maximize returns on your own investments. If you sacrifice short term profitability on your PM company for the long term benefit of building the PM company that will manage your future portfolio it should pay off.