All Forum Posts by: Corey Conklin

Everyone seems to think this is only an affordability issue. I think everyone is forgetting that there is a huge amount of people that DON'T want to live in or near a big metro area. There was a time in my 20's that I enjoyed being near all of the lights, sirens, and and amenities that a major metro provides but as you age you start to understand that it's really over rated.

I grew up in small town Kansas and have lived in some big cities after I graduated college. There is no comparison in the quality of life. small town, country living will ALWAYS beat the city life. You don't have to agree with that and it's not anything factual, but it's important to understand that there are millions of people that would agree with it.

I choose to only invest in small towns because I am seeing more and more people choose that life over big cities. In fact, I just had a young family from the Seattle area move into one of my houses in a small town in Kansas of about 11k people. I've had multiple people from metros all over the country reach out to my houses that are posted for rent on Zillow that are moving to small town Kansas. A lot of people want out of the city.

Sure, rising population metro areas are a safe bet when it come to investing. Location absolutely matters. But for a lot of younger family's a small community, starlit sky's, and the sound of nature are more important that constant sirens, Uber, dog spa's, and 100 different coffee shops or microbreweries.

That is quite the find! Most the time all we find is animals (dead or alive), spoiled food, feces, etc. so it's nice to hear someone find something that isn't any of those items! The best find I ever had was a plastic kiddie pool with a built in slide in an old tool shed that was left behind so it definitely beats me.

I know most people would advise reinvesting your findings or maybe splurging on something you've always wanted like a car, vacation, trip to space, or a pony. But all joking aside you have an incredible opportunity to do something way bigger than any of those things. With that amount of money you have an incredible opportunity to change countless lives by finding ways to give it away to causes/people that are important to you.

At the end of the day you can do what you want with it because of the rule we all learned in grade school - "Finders, Keepers"

Again, congrats on the huge score! Maybe one day I'll find something like that but until then I'll just enjoy chilling with the kids in the kiddie pool.

There are risks to using leverage in any real estate deal or portfolio. However your situations biggest risk is the lack of appreciation. 

If you buy real estate with leverage there are 2 great ways to create equity with little to no work. Debt paydown and appreciation. Since you are investing in areas with lower or no appreciation you will see your equity grow much slower than markets that have appreciation as all you have is debt paydown.

If you can leverage your position now I would look for properties where you can create equity through renovations, management, property use, etc. If you just want to buy rent ready properties and start collecting rent I would caution that you don't over leverage as you will only increase your cap ex spending all while eating into your cash reserves/equity. I learned this the hard way not too long ago.

I invest in similar areas and I do use leverage to buy properties but I have starting using the techniques that I mention above, keep a good cash reserve, and I am more aggressive on the debt paydown than on assets that have good appreciation. This has kept me from getting into tight spots like in the past.

There are a ton of things you could do to get into real estate. Most of these comments lay it out really well. What you choose to do won't make or break your success, how you choose to do it will. The effort you put into your side hustle determines what you get out of it. Remember to do these tasks as ways to learn, not ways to earn. 

@Ahmad H.
Insurance companies don't work off of reason. They solely work to make sure they don't pay claims and they'll do anything possible to make that happen. 

This seems more like insurance fraud (from the insurance carrier). Everything you said above makes complete sense and to think that an insurance company can deny this claim over a smoke detector is garbage. 

Life safety is important and needs to be taken seriously. But the bigger issue here lies with the insurance carriers actions. Insurance fraud is really common and it's the insurance companies 95% of the time. If this were my situation I would absolutely take this to court as you had mentioned.

Worked for a maintenance crew for a big developer in college that managed his properties in house. I saw first hand how crazy people can be and what crazy maintenance issues can pop up in the worst times of the night. Since college I've worked as a commercial construction PM in different parts of the country. That more than prepared me for managing my own properties.

Biggest mistake? Thinking that going in to business with family was a good idea. Also renting to family or friends. Don't be like me and do this, it rarely goes well.

Short answer. Don't invest out of state as a newbie investor. 

Why?

Do you really think a good local agent is going to give a newbie OOS investor first look at their best deals? Or are they going to show you something that has been shown and turned down by all of their current investor clients? Hint: they aren't going to float you good deals.

Property Managers don't have time to help a newbie OOS investor find their first deal. They have enough on their plate and helping some newbie get in the game isn't going to be high on their priority list (or on it at all).

You've probably read some books and listened to podcasts and they said you need to build your team to be successful. You can't build a team around something that doesn't exist. You need to go out and build something before you can build a team. Anyone who tells you otherwise is trying to sell you something.

Your fear that it is going to be a lot of work is 100% legit because it is a lot of work. It's also one of the most abused parts of any house. Every turnover I do is littered with scuffed up, dirty, and damaged trim and doors, especially if they are white. It's just normal wear and tear on any house as they are high traffic areas. I used to dog on landlords that would paint the entire house one color (walls, doors, trim, ceilings, windows, etc.) but being on the other side I definitely see why they do it!

I believe I saw someone mention it but the price point of your rental would be a huge factor on my decision. Are you in a high end neighborhood that will bring top rent? Or will it be in an average neighborhood with market rent? If you are in a high end neighborhood with top rent your renters will have more of an eye for those details so refinishing the doors and trim may make more sense. If you are in an average neighborhood no one will care about the trim and door color. The average renter just wants a clean, safe place to live.

A few questions to consider before doing the work. Will it increase the rent price? If so what's the return on the time/material invested? Will it decrease vacancy? Does it decrease maintenance or speed up your unit turns down the road?

Remember that this duplex is an investment. Try to make your decisions based on that and not as if it were your personal home. I've got a few properties that have finishes that I don't care for at all but I still get rent at the 1st of each month.

Replace the roof if you have the access to cheap money now and it really is in bad condition but I'd get a few opinions.

I'd get a few opinions on the HVAC. There are a lot of the old units that are built to last unlike the crap they sell today. I've had a few homes with units 25+ years old and they work like a champ. Just because you replace the old working unit with a new unit doesn't guarantee that you won't have break downs in the middle of hot/cold weather. New units break down just as much as the old units.

There's a saying that I learned on the farm growing up "if it ain't broke, don't fix it". I catch myself saying it all the time when I come across decisions like the one you're facing now and it's worked pretty well.

Most of you understand that leverage is a great way to build wealth, faster. I've used it as well as almost everyone on BP.

But, owning a property free of debt gives a lot of control back to the investor. 

I've learned that I'd rather grow at a slower rate and not be at the mercy of lenders and insurance companies that will gouge you every chance they get. 

I don't know how someone can say they are "financially free" when they are overleveraged. Just because you are making 10k/month in cash flow today doesn't mean you will next year if you are too dependent on other lenders/people financing your deals. It's almost as if Dave Ramsey did that in the 80's and it all came crashing down on him and now he's letting people learn from his mistakes...

I'm not saying Dave is the all knowing financial guru. But neither are the people selling you that you can get rich quick using other people's money i.e. (insert real estate sales person here)