All Forum Posts by: Corey Conklin

There are a lot of comments that addressed the reality but I figured I would add to the message. Out of the inquires you receive only 5-10% are really qualified to rent the property (at least in my area). So if you have 35 people interested I would say only 3-4 of them actually qualify to rent the place.

I suggest only doing open houses and not doing individual appointments if you haven't received some sort of prequalification from the prospective tenants. You'll get ghosted by a lot of people if you don't do it this way. Unfortunately its the down side of online postings. You'll get a ton of people window shopping for places that they know they don't qualify to rent but don't consider it rude to waste your time in inquiring and setting up a viewing that they know they won't go to.

My wife saw real estate as risky too which I have had to show her that it's actually one of the most stable assets you can invest in. Its been crammed into everyone's head that 401k and IRA retirement accounts are the only way to invest in retirement safely and that real estate is risky.

I've been able to show her over the last few years it's actually the opposite. Our retirement accounts have been getting hammered and our real estate business equity has gone up almost 300%. 

I've had to gain her trust and prove to her that I can make it happen, I'm just thankful that she gave me the chance to prove I could do it. That's really all you can ask from your spouse.

This needs to be preached to every new investor! If you aren't going to take action for yourself why would anyone want to be on "your team"? You have to actively build something before you can have a team. Good stuff @Travis Biziorek 

There are a lot of people that don't understand how hard it is to get your significant other on board with RE Investing. I've had a similar issue getting my wife on board with my plan to build and expand the RE portfolio. We have a 2 year old boy and are expecting another child. Balancing family life and starting RE is incredibly difficult.

From my experience it will be a constant issue that you will need to be sure to address through good communication with your wife. Just because your wife says she is on board today doesn't mean she won't second guess her decision when you have a few properties and go through some hard times. You cannot stop communicating with your wife, this is huge!

It sounds like you and I are similar in that we are both really ambitious and want to achieve a lot. Since I starting investing I have obtained my RE license, started a PM company, and manage all of the work on our (6) property portfolio. I also have a full time job in commercial construction management.

There are times you'll be second guessed, you'll second guess yourself, you'll make a lot of mistakes, get burned by bad people, lose a lot of free time, sacrifice current relationships, and much more. 

My advice would be to make it very clear on why you are going to embark on this journey. If you are clear on why you want to get into real estate and don't lose sight of that vision it's easier to push through the bad times and justify the sacrifices you are going to make.

I wish you all the best as you start your real estate endeavors!

I like to approach paying debt off the same way I look at buying assets. What is my CoC return?

Here's the example: I have a rental property with a $28,000 loan balance at 9.25% interest and the monthly payment is $350. If I pay that amount off today that would be 15% CoC for the $28,000. 350*12=4200/28000=15%. I would lose the monthly expense which I consider my return.

I've got other loans that I would get 4-5% CoC returns so I wouldn't care to pay them down.

The big thing you are missing is a timeline of when you want to be financially free. Is it by 2025? 2030? 2035? Once you get that figured out you'll understand the moves you need to make to have it happen. Obviously the sooner you want to reach your goals the more you will need to sacrifice.

Make sure you understand fair housing laws before you go too much further. College major choice is not considered a protected class but if you do discriminate based on college majors in your application process you better be consistent. Also be careful that you don't actually discriminate against a protected class while doing so.

House hacking is a great way to get started. It allows you to buy a property with a low down payment and provides a place to live while you continue to improve your financial situation.

The only piece of advice I would offer from my experience is to make sure you detach yourself from the house. The house is no more than an investment that will eventually be a rental property. Don't treat the updates to the home like you would if you planned on living there for the next 30 years. I don't mean skimp on quality work, what I mean is don't go overboard with crazy design changes or high end finishes. Keep it simple.

It's also smart to consider staying away from things that don't work well in rental properties like pools, hot tubs, extensive landscaping, etc. when you look to purchase. 

@Allen Duan

You are correct. To keep the same number of units as the existing hotel you would need to keep them all to studios. I'm not a huge fan of studios for LTR, they don't perform well at all in my area as there isn't a crunch on affordability like bigger markets. 

I have also thought about combining some units to make them bigger but that is at the sacrifice of losing 15-20 units. I've tried underwriting it both ways but there isn't a close comp at all in the area I want to do this conversion so there isn't a great example to look at to see if it could work out.

If it's not something being done in bigger markets, it's probably for good reason and helps me understand what I'd be getting into and I'll need to continue to dig into it.

It would be easy to understand why it is so hard to find a good property manager if investors would look at it from the other side.

A property manager is paid very little to do the hardest work in real estate investing! They are getting their butts kicked day in and day out while you, the investors, sit back and collects a check every month. They are the ones handling the late-night calls, the needy tenants (and owners), chasing down payments, dealing with bed bugs, providing financial statements, leasing, maintenance inspections, property marketing and so much more. We expect them to excel at all of this while keeping your costs at a minimum. Seems realistic to me!

With the boom in real estate investing and the growing demand in the need for property managers there seems to be no way that this model is sustainable. Unless investors come to terms with the quality of service a company can provide at the rates that they are willing to pay.

@Steve Meyers My fault I should have been more clear on the splits. I was figuring them getting paid on your net commissions after paying for the brokerage fees, signs, flyers, and any other resources needed to close the deal not on the gross commissions. 

The only reason I would pay them so well, personally, is because I hate doing every task you are asking them to do with the greatest of passions. So for me to avoid those tasks and being able to focus on meeting with clients and closing deals (which I really enjoy) it would be worth every penny. If they were really good at bringing in quality leads in all (3) areas of your business that would be a huge win.

I don't think I would pay them hourly but if I did I would have to be diligent and provide clear KPI's that need to be hit daily, weekly, monthly. It would take a lot of work to manage. But if you are able to manage that you could potentially keep more of your profits.

I live in Kansas so what makes sense for hourly wages here may not make sense in your area so it's hard for me to provide a solid hourly wage number for you.