All Forum Posts by: Doug Poff

@Steve S  Great question and I'm monitoring too.  @Satha Palani have you looked at Petersburg at all?  I'm thinking Ettrick around the VSU area and across the river, but haven't researched it yet:

Link: http://www.zillow.com/homes/for_sale/ettrick,-virg...

Lots of homes under 50K - but it is definitely not the best of areas; but that depends block by block.  

@Jay Hinrichs    Thanks, I will definitely look up the site as well as try to download your book.  I learn best by examples, so listening to actual owners or case studies really helps.  

@David BellSimilar experience to @Kayla Lyon earlier in this thread. I only received a phone number to the PM and the name of Natalie. I assume this is probably the same PM referenced earlier in this thread. As for references from buyers - no. After reading and considering the information here, I too will take the tact of listening and learning from CM's podcast, but have used my investment dollars elsewhere - just closed on an A-, B+ SFH rental property in Denver; will see how that goes and 'learn-by-doing'.

BTW - Highly recommend this week's BP podcast 191 'Buying Out of State Rentals' - it addresses some of the issues raised here with a great case study interview.

@Andrew Hargreave   First off, welcome to BP - we 'late bloomers' need all the demographic support we can get.   

Secondly, I read RDPD years ago and it also got me motivated to find my mentor - which has proven fairly successful.  I love the ideas in the book too and will be passing it on to my kids, with some caveats, when they are ready.

HOWEVER, that being said you may want to limit your RDPD experience to the book and avoid the seminars - here's a BP thread on the topic worth reading:

https://www.biggerpockets.com/forums/79/topics/147553-free-rich-dad-seminar

Not trying to dampen your enthusiasm, but just think you might want to be aware as you move through this new world.

@Merritt Whitman  Sincerely, thanks for sharing your experience.

@Merritt Whitman Thank you very much for the reply and advice.  I will definitely look up your thread.  My original post was from work - which apparently only displayed the first page of this thread.  Realized last night there was 5 pages of notes to it and as to your advice have now read all of them.  

@Jay Hinrichs, @Chris Clothier, and @Clayton Mobley - very informative posts and I particularly found your collective concerns about the long-term (i.e. 2+ years ) considerations eye opening. I am looking to diversify into residential buy and hold, am quite familiar with local professional/commercial REI concerns, but am a total newbie to residential investing. I respect your experience and appreciate your advice and hope to connect up as well to look at other TK opportunities.

@Jonathan Watson thanks for the link! I think this thread does show though that Clayton's podcast has brought a large influx of newbies/amateurs (myself included) into BP and interest into REI in general. This influx is not a bad thing as long we do the due diligence - and the BP community is part of that process. Through my other commercial interests, I had been introduced to BP, but only on youtube and never really viewed it. I was unaware of the community here at large until Clayton's podcast, and had no interest in (distance) residential investing until then. On that score my mind has changed. So whether I eventually do business with him or not, a tip of the hat must go to him for sparking the idea.

Any recent updates to this thread? 

I found the podcast in June, loved it and just had the call this week.  Spoke to a representative (out of Orlando).   He stated they are currently focusing on homes in the Marion County (Indianapolis) area, and sent me a couple of example houses, one single family and one duplex.  

Single was buy at $18K, rehab at $20K.  Rent at $650, yearly taxes $70.  Guaranteed tenant, property management fee of 10%.  Whole package at ~ $40K

Double was buy at $16K, rehab at $22K.  Rent at $1000 ($500 each).  Yearly taxes at $592, PM at 10%.

Rehab consists of electrical, water lines (pecs), roof (if needed) and windows.  Apparently due to scale they have enough business to get wholesale prices on supplies - probably making part of their money on the margin.

Bottomline, they try to stick around the $40K all-in price for the investor.  Numbers on the surface look straightforward and good.  

Homes are definitely in the C to C - area in downtown Indy.  Trying to research the actual area further - haven't been to Indy in years.  

Clayton mentions other areas in his podcast, so I asked about them but the rep said they are currently only doing business in the Marion County area, with possibilities to expand elsewhere later.

Not worried about the C class neighborhood aspect or distance, as long as the property management team is strong, experienced and LOCAL.  The rep stated the PM was someone Clayton had used in the past and was comfortable with.  

The follow-up email included the PM's address for registration purposes for any formation of an in-state LLC (not sure that was a recommendation as it was not explicit in the follow-up, but Morris has advocated for this in his podcast). Quick google search on the PM address turned it up apparently as a Pak-Mail store, and dozens of LLC's listed there.

I have requested further information about the PM, with references;  as well as references from buyers as I too could not find any 'independent' online reviews.

Any further insight or experience from the BP crowd?

Not an expert myself, but I was in your same situation about 6 years ago. First suggestion: on the 4 plex issue, you may want to search BP for the key word 'House Hacking' or search out the podcast, there is a lot of info on the pros and cons. Problem with using the VA loan to do this would be that you tie your VA certificate up in the property until you sell it, you can only use it on one property at a time - if you are planning on buying and holding forever, this limits you using it later for another residential property. Second suggestion: I bought into a commercial property just before retiring, but instead of a retail strip mall, I bought into a multi-tenant medical office building located in a strip mall area. Lower entry cost (buying only one building while getting the advantage of the traffic in the commercial area), more stable tenants (physicians and health-care corporations tend to want to stay where their patients are, and I found that banks are VERY favorable to dentists/orthodontists since they are a heavily cash flowing business - and subsequently very favorable to the landlord with a tenant lease to one. My partner and I actually bought a retail building, tore it down and built a new office building - the bank financed us due to the signed physician and dentist tenant leases we had in hand. Good Luck.

Monitoring as well.