All Forum Posts by: Drew Ogden

I have used First American Exchange many times and they have been great.  They are connected with First American Title, so definitely not a shady organization.  I think they charge about $900 per exchange, which is hard to beat...

I'll just say it, Tacoma.  I would prefer a 2000-2004, but hey, I am a car guy....  Shows taste and sensibility :)

Good info. I did not know that they differentiated between STR's and long term rentals....

I pay $5500/yr for a $1.4M single family in Miami Dade, 1 mile from the water.  Your quote does seems out of line.

Impact windows/doors, roof less than 20 years, hip roof, and updated electrical/plumbing will drastically lower the premium.  Citizens insurance basically covers everything down here in Miami Dade, regardless of the agent that you use.

Keep the bank, own it, 1031 it if you want to sell...  Who cares about diversification if it is a credit worthy tenant.

I am buying NNN single tenant deals right now, and sold my multifamily last year to do so. I like deals with good dirt in high population growth areas. I also like deals where the tenants are paying under market rent, have solid guarantees, and have less than 15 years left (including options). Shorter terms allow for an inflation reset and usually a higher cap rate at purchase. It is amazing the diversification you can get within this asset class, both geographically and tenant type. It is fun and almost addictive, I like it much more than multifamily at this point.

Stay away from any market that has TOPA...

I lost my Bahamian (Elbow Cay) rental house to Hurricane Dorian, and experienced the storm myself.  No Insurance as it was prohibitively expensive .  It was making over $100K a year and I used the home all the time.  It was a 48 hour long storm moving at 2mph with 225 mph winds.  The eye was over us for almost half an hour.  

So, yes, I think about natural disasters more than I used to. I sold my Oakland, CA rental buildings after that storm because of earthquake fears. I put the money into NNN commercial properties with rent increases tied to the CPI in both Denver and Tampa. I sleep well at night now.

I also just moved from Boulder, where the fires destroy at will.  The past two summers were so smokey that you couldn't enjoy the outdoors half the time.

I believe it is wise to think about natural disasters when making real estate investments.

I drive a 1958 VW bus.  It looks like a $5000 car, but is worth closer to 100K.  I drive that to the rentals and it certainly doesn't make me look wealthy.  The tenants never get to see the 1958 Porsche Speedster :)   The vintage car game is as fun as real estate, just appreciation based instead of income producing....

I just had this problem :).     I recently sold two properties in West Oakland because of upcoming legislation (look up TOPA if you want to be kept up awake at night).  Anyway, I had 2 mil in proceeds to play with.  However, I have been comfortably living on the income for many years (aside from making money on other random things because my time was freed up).  I wanted to replace my income with less management and tenant hassle.  I also wanted to do a 1031, so I had a time constraint.

I sought out a NNN single tenant deal with 1.5M cash. I then bought a duplex in a nice part of Longmont, CO for $500K cash. My combined cap rate on these two deals was 6.25% and replaced my cashflow almost exactly to the dollar (10K per month). I anticipate appreciation for both properties, as they are both high growth areas (especially the NNN 3/4 acre in Brighton after 15 years).

So, I am basically obtaining the cashflow presented in the initial post, but it took me twice the capital to make it happen.  I can always pull money out of these deals (the duplex after 6 months, the retail property now).  Closing cost in Colorado are NOTHING.  It cost me under $400 in fees to buy the duplex.  I might pull money out and make another play this year, but I like the cash flow with no debt.

I am 48, and my father has been in Real Estate since before I was born.  Every guy I have seen fall from grace (including my father twice), has fallen because of over leveraging.   Something as simple as a 10 year note coming due after interest rates have tripled can cause havoc. My dad lost a Home Depot in the 80's because of this.  This is a real threat to anyone financing 5 or more units, or commercial in todays environment.  If I make another play, it will be a few higher end (lower cap rate) properties with 30 year financing to diversify against inflation/higher interest.

In short, I would take the 10K/month EVERY DAY ALL DAY......