All Forum Posts by: Daniel Lehrman

Is anyone looking for an agent to send them analyzed MLS deals in Phoenix, Scottsdale, Mesa, Chandler?

From what I hear and read, many realtors are reluctant to work with investors.Many investors have trouble finding an investment-minded realtor.I’m primarily looking for practice analyzing, offering, and closing deals, so I don’t mind at all.I will be paid the commission.

I've closed one deal so far with an investor-client who bought a property in the Garfield neighborhood for cash.He had a 5% CAP rate, and he plans to fix/flip it when the time is right.I found him this property and brought it to him because I knew it met his 5% CAP rate criteria.

I use a fix/flip, rental, and seller carry analyzer that uses best and worst case scenarios for ARV, rehab, and rental rates.

Cash buyers are obviously preferred, but I’ll work with anyone that’s serious!

Please PM me with your criteria and e-mail address

Hi Shane--Are you starting at Vanguard? Feel free to PM me and I'm happy to share whatever I've learned in the 3 years I've lived here

I found an amazing househack for the next 3-5 years, but am I sinking myself for the long-term?

Here are the facts:

• 2000sq ft main house in a very desirable neighborhood in Phoenix
• 860sq ft guest house (I would be living here for 3-5 years)
• Purchase price $380K
• Down payment is 20%
• Rehab costs:$5K to replace flooring.  Otherwise, it was recently remodeled by the owners
• Estimated rent (based on MLS data, craigslist, & Rentometer) = $2000 - $2400 for main house, $900 - $1000 for guest house.

If all goes well, my tenant will pay most/all of my PITI, and I would be able to accelerate my savings. There are not many houses I've seen that have a guest house this large.

My concern is that I’m paying top dollar for a house at the top of the market.  If we see a correction in the next 5 years, which many argue is extremely likely, I will not be able to sell the house and will need to rent it out for (potentially) negative cash flow--not ideal.  I won’t go through the numbers on this post, but it doesn’t meet the 1% rule, so I’m assuming the worst.

Some tell me to “Jump in!  Don’t let fear stop you!  You will make mistakes and learn!”  Some say “You make your money when you buy, so buy right.”  Others say both. 

What do you think about this deal?  Should I do it?

Other factors:

• Property is in the flood zone, so I will need to buy flood insurance.
• Theft in 2016 (though Crimereports is clean for the last 6 months)
• Drug rehab center 3 doors down
• Water treatment plant within 1 mile of the neighborhood (Didn’t smell anything though)
• This property was purchased by the current owners for about $250K in 2012.They’ve taken very good care of it, and remodeled it very nicely this year.

I would really appreciate your input!

Let me know when/where!

Hey @Carlos Gonzalez, sorry for the delayed response.  I didn't notice you had posted this.  Friday, June 23 at 6:30PM works for me! 

Lauren Ruck If I remember correctly, Carlos Gonzalez attended one of these meetings after seeing their signs. He said that it was a sales pitch for a guru program, where you pay $20k. They play on your desires with images of corvettes bikini-babes, and also fear of mediocrity. Like you said Lauren, if it seems too good to be true, it probably is.

I think the answer depends on the interest rate you would get on your HELOC, and how long you plan to invest that money If the HELOC is less than 3% and your time horizon is at least 10 years, I would make the argument that taking the HELOC is a better idea. The stock market long term performs much better than 3% on average. The risk in doing that, of course, is that your stocks will happen to tank during that time. However, there are very rare cases in history where the stock market has not gone up in a 10 year time horizon.

A RE Investor should always have liquidity, no? Why not max out your Roth IRA $5500 every year ($6500 if you're over 50) and use that as a back-up to your emergency fund? Give some of that money a chance to grow tax free instead of sitting in the bank. You can withdraw contributions at ANY TIME, regardless of your age, without ZERO tax or penalty. Contributions will always come out first, and your IRA provider will most likely track your contributions. Ex: If you invest $5500 into an index fund, and it grows to $6000, you can withdraw $5500 today without any tax repercussions. Apologies if someone mentioned this already. I scrolled to the bottom after people started debating whether 401k match was worth it. Keeping in mind possible fees, taking the 401k match is a no brainer.

@Chris Eley Awesome job!  The after photos are gorgeous.  What area of Phoenix did you do this in?  Did you do all the physical repairs yourself? 

@Marc Gleason I'm also somewhat new to real estate and have my license in Scottsdale.  My future is also on the investment side, but I'm using my license to learn about the Phoenix market and network with successful investors.  My broker/mentor personally owns 55 rentals in Phoenix, so I think having your license puts you in a position where you can meet and partner with people you otherwise wouldn't have access to.  I'll send you a colleague request!