All Forum Posts by: David Grabiner

How much did it cost you to build?

For sure there are Wholesalers who don't bring good properties and then there are investors who don't ever close on a deal. However one comment I never understand is when people criticize wholesalers who over estimate ARV and under estimate repairs. That is for the investor to figure out, if any investor depends on someone else's numbers they won't be successful for long.

I invest in a small market and there aren't many professional wholesalers in the area but the one property that I did buy from a wholesaler all that was listed was the sale price, the address, and lots of pictures. Really what else do I need from a wholesaler? ARV and repairs are for me to determine and I would never trust anyone else to give me those numbers, especially the person selling me the property.

@Tomer O. Yes those properties are not always easy to find but they are available some times you just have to look harder for them and they might not be listed with Turnkey providers. I have a Quad in Chattanooga that was purchased for $125K currently rented out for $2,135 and expenses are running at 40% including 10% for management although it is self managed. However, Turnkey might be the right choice for you and then you will have to see what options they have. 

A word of advice don't get hung up on the 50% rule because a HUGE part of expenses is your taxes and insurance and those numbers can change drastically depending on your area. So a property in the county that doesn't have city taxes will have less expense, and investing in an area where insurance rates are not high can be the difference between a $600 per year premium and a $2000 per year premium.(I hear Memphis has high insurance rates just something to keep in mind)  Also management expense can vary greatly as well depending on what little charges they add besides their standard percentage. 

With a little searching you should be able to find a property, in the midwest or memphis, that can you can purchase for $100K cash that will give you a $1000 per month return. That way you can keep your simple lifestyle and make $1000 per month with one property. Ofcourse that return will be less if you have to repay your parents back, but you could do that as quickly as possible and once you do you will be clearing $1000 per month and you can continue living the dream without the hassle of trying to scale up your acquisitions.

 I'm a little confused by this assertion. Can someone not learn from their small mistakes before it leads to disasters like you stated above? Couldn't someone bring what they have learned in life from other fields and apply it to RE investing without having those disasters? Couldn't someone read books, blogs,  and listen to podcasts and at the same time invest to get hands on experience to learn from? 

@Account Closed I never said whether I agreed or not with paid education I only mentioned that he posts about it often and the reason is because he profits from it, as do you. Nothing wrong with profiting from education, all though many people use the guise of education to separate suckers from their money.

Only the ignorant think education must cost money to be valuable. 

People are at all different levels in their investing career, have different skill sets, and learning styles. To say people don't value their time or money if they don't want to pay for a coach is simply not true. Some people can weigh the options and pick the way that works for them. Yes I'm relatively new to investing and I have had success at it. Most of it was just down to common sense, investing in the right market, using my existing skill sets, and reading books. I can't even credit BP because really I didn't start looking at BP until this year. For me, spending 70K on a guru seminar, or paying 12K for coaching, or paying 25K for the privilege of being in a JV will never be worth it for me.

You should really find out exactly what they require, or talk to a different lender who can tell you exactly what you need. 

@David Dachtera I was wondering why so many of your posts referenced the benefit of paid education and then I looked at your profile and saw my answer. 

@Joshua Hollandsworth The initial calculation is never going to be 100% what is going to happen. You might have no repairs for 10 years or you could have a $5000 repair the very first year. Often times when we say this property will give x Cashflow or x% cash on cash return these are not true because these are just projections of what might happen. The real number isn't known until a couple years down the road when the actual expenses can be averaged out and you can see how you did. 

My take on it is if you are going to have multiple properties then use the same formula to project all the expenses that includes vacancy and repairs+cap ex, you can choose the percentage you want to use. As you pointed out a percentage is not always the most accurate but it does make for easy quick analysis. Don't stress if it will be exact for that property because over your portfolio it will average out. Then when you have the property just make sure you have a reserve set up for every unit and just track your actual expenses, if you have an expense that can't be covered by the monthly cash flow then dip into your reserves. This works best when you have multiple properties because the risk is spread out so you can handle a larger expense without having to pay "out of pocket". 

@Jeanette Contreras. I can't recommend any realtor at this point, as I just contact the listing realtor directly. I would recommend that you check out gcar.net/homes and filter by multifamily so you can start seeing all MLS listed properties in the Chattanooga area. That way you can start checking out properties immediately while you wait to find a good realtor.

I check that site everyday, filter by multifamily then sort by newest to see all the properties as soon as they are listed. 

Good luck