All Forum Posts by: Dax Desai

 Low-debt is a viable strategy.  However I don't consider real estate dollar cost averaging the same as the stock market.  If for example the SP500 PE average is 30 this year, and drops to 24 next year it would have a dramatic effect on the price of the stock.

Conversely if you own real estate you are more inclined to be concerned with the actual cash flow as opposed to the valuation overall because your timeline is much longer (generally).  In addition you are paying down debt over time.  While it is possible you may pay $100K this year and $80K next year for the same property, such wide swings aren't typical as it is with the stock market.  In addition if you are cashflowing at $100k, you are not really feeling any pain when you could've bought it at 80K.  Overtime things will average out in your favor.  I would consider the 100 down to 80 a dramatic and less likely movement in price.

I have a commercial property I put in $200K on with my share of the debt at 800K.  While my yearly cashflow share is 30% or $60k, my net worth is increasing with the debt paydown.  My NetWorth is increasing each year with debt paydown until ultimately I'll have 800K on the assets side of my balance sheet if I make no other investments.  If I were to save to 800K, the odds are I would never be able to accumulate that much money without debt.

This is my personal view.  I'm not judging no-debt strategies.  The one thing you have me beat on is risk.  Leverage inherently has risk associated with it.  As an investor I believe you have to take on some risk to make more money.

For Next Time:

• Have a contract with deliverables and reasonable schedule
• Specify PERMITTED PLANS.  This will save you a lot of trouble.  Anyone can draw up a set of plans, but if they don't meet all the codes there is no point.  You'll just end up going back and forth paying again to make new plans.   So ALWAYS specify permitted plans.  The exception would be if you are paying for space planning and know you will take those plans to another architect to actually get the permitted drawings.  Know ahead of time.  Plans are no good unless they are permitted at some point.
• Check references for any issues.  It is possible the others had similar problems.

Are you talking about List Source?  Alot of investors use it.  The service is owned by Corelogic which merged with a large title company years ago.  As a result they have great lists for properties with equity, which is what you're going to be looking for.

They have great filters by location, age, marital status, equity, etc.  The lists may seem expensive, but you get precision in targeting your marketing dollars.

I would recommend it.  Once you get your list you can use anyone you want for mailings.

Leverage is your friend in real estate.  Think  of it this way.  If you have to save your way to buy a $100k property how long will it take you?  Conversely, you can use leverage and put down $20k and take control of a $100k property.  While your cashflow maybe a couple hundred per month, you will also enjoy paying down of the debt over time.

Instead of buying 1 100k property cash you could buy 5 houses with 20k down each and make perhaps $1000/month cashflow.   In addition presuming you had a 30yr loan.  In 30 years you'd have 500K in paid off assets.

Which is better?  One builds wealth faster using leverage and time.

Are you talking about cast concrete homes?  I'm interesting on your pricing.  Please shoot me an email.  I'd like to dig into this as well.

While I don't have a specific accountant recommendation for Dallas, I will recommend you interview a few and find one that also invests in real estate.  A CPA that actively invests in real estate will be much more knowledgable in general about the nuances and any financial tricks to maximize your tax savings.  I'm speaking from experience.

This is why I love BP.  You are HUSTLING.  Your story motivates me to get on it.  Often times our minds create a million excuses before we even take a step.  You had a ton of reason to not do anything, but you took that big step.  Much respect to you.  I'm sure I'll be reading more of your success stories.

Regarding New Western, I've done a handful of fix and flip deals.  My greatest profit I had was one I bought from a wholesaler - New Western out of Dallas.  They're definitely large in the space and know their stuff.

I met Trey at one of New Western's Houston houses and I was absolutely amazed at his market knowledge. By market knowledge, I'm not talking about just ARV's. He knew what pockets of Houston were hot sellers, what pockets had a lot of buildup and better to avoid, which areas had more competition, which areas had more equity, which areas had new home supply scheduled to come in. I'm not just talking about a small area of Houston. We discussed the Woodlands/Spring areas all the way down to Bellaire as well East/West. I walked away very impressed. While some information is readily available, most people will not seek it out and actually be on the pulse of the market. Due to the volume New Western does they truly are on the pulse of the market. I have never met any other wholesaler with the depth of market knowledge.

I would definitely recommend New Western and Trey to anyone looking for a good investment property.

Sounds like a winner.  SF has always been a rock star for hotels.  It is harder than landing on the moon to get anything approved or built there.  That certainly helps.

It sounds like you had to jump through a lot of hoops, but maximizing room counts is the way to go in your area.  You sure you can't jump through a few more hoops and add another floor?  4 story is very cost effective and the added rooms would be relatively cheap and maximize your land use.

Sounds like a winner.  SF has always been a rock star for hotels.  It is harder than landing on the moon to get anything approved or built there.  That certainly helps.

It sounds like you had to jump through a lot of hoops, but maximizing room counts is the way to go in your area.  You sure you can't jump through a few more hoops and add another floor?  4 story is very cost effective and the added rooms would be relatively cheap and maximize your land use.