All Forum Posts by: David Barnett

Cross check the list against the assessor's department records?

@Crystal An I'm an out of state investor (I invest in the Twin Cities and am from the Boston area). The team is by far the most important aspect of success versus failure. The Twin Cities have seen big growth over the past few years, and deals are harder and harder to find. I would figure out what you are looking to do in real estate investing and find a market that is good with those types of assets. For example, if you are looking for a SFR portfolio, I wouldn't go to an area that has a whole bunch of small multifamilies. The one piece of advice that I would give is once you determine the market, book a plane ticket and travel out to the area. Become crystal clear of where you'd like to invest and meet potential team members in person. It changes the relationship exponentially, and I would also argue that taking the initiative to travel to the market (and the team members knowing that) instantly increases your credibility in their eyes.

I agree with everything that @Mary M. said.  The cameras would be more of a deterrant than anything else.  It won't prevent all thefts, and it makes any would-be thieves be more prepared.  I've found that thieves in general target the easiest of targets.  If your target isn't the easiest in the neighborhood or there is a potential that they might get caught, they might think twice about trying to burglarize your property.

@Anthony Cancel What kind of properties are you looking to purchase? Is it safe to assume SFR's that are in the Midwest (say purchase price $125k-$150k)? Frankly, if you are looking to stay in the turnkey area, the funding would need to come from a W2 (strong saving's rate) and would need to snowball from existing properties. For example, if you can save $30k a year, it's likely you would be able to purchase one property a year. In year 2, you'd be able to save $31,200 (assuming $100 cash flow on property one per month), and so on and so forth. Likely by year 5-6, you'd have enough appreciation in the first property to pull a bit of equity out and possibly buy two properties instead of 1. It's definitely a more gradual process than rehabbing and forced appreciation, however, is doable as well. It's more about consistent action, consistent saving and patience.

@Matt M.  Makes sense.  I think that turnkey is definitely a slower approach for folks that want to get into the real estate game at a much slower pace.  Assuming no appreciation, the gains in turnkey are the tenants paying off a few hundred dollars a month on your mortgage each month.  Whereas, other investors will purchase a property in need of repair, force the appreciation with targeted repairs, and then eventually pull out the equity harvested in order to repeat the process.  Different strokes for different folks, and if you don't have time to manage a rehab from distance, it makes sense.  I think that some turnkey buyers are more comfortable with a physical asset instead of say stocks, bonds, etc.

I bought a condo as my primary residence in 2008.  Let's just say that the timing was really good, and I got a really good deal.  In addition, I used a Massachusetts special loan product (soft second mortgage) since I qualified.  So, not only did I get a good deal on the price, I also used a loan product that I was able to use with my current income levels (bought the property about 4 months after graduating college).  Very, very good purchase overall.

Ask an agent to set you up on the MLS in the area you would like to invest in. They can set up a search for your criteria on the portal, and you would get listings in real time instead of waiting for them to feed over to Zillow, Realtor.com, Ziprealty, etc.

I invest outside of my home market and farm out day to day management of the portfolio to a third party property manager.

None of these items scare me.  The one item that is the most concerning in my mind is the termites, especially if the damage is more substantial than originally found in the inspection.  The other stuff looks pretty easy to fix or address.  I'm assuming you are working with a realtor or have a property management company lined up?  Either one of them should be able to introduce you to a GC in the area.  They should be able to take a look at the report and provide an estimate on how much the items found in the report cost to address.  If it's more substantial than you originally thought, why not approach the seller and try to renegotiate?  Options are, renegotiate, accept the report and address the items after closing, or walk away.  

@Matt M. My comment isn't in favor of turnkey or against it (frankly haven't done any turnkey investments).  I tend to agree that the properties that have some hair on them (need some rehab) have been my best investments to date.  The ones that were pretty much done and didn't need any work have been my worst.  I think the allure of turnkey is for the people that are busy working a 9-5, investing out of state and don't have a bunch of time to manage properties, yet still want to invest.  I think your situation is a bit difference since you are a contractor and can do the work yourself.  In my mind, it's comparing apples to oranges.