All Forum Posts by: Account Closed

I like cash flow, so I started mine in the midwest and am adding properties in the south (after buying two properties in CA in 2012 and 2014, before I was trying to "build an empire"). I'll probably buy more in high prices cities when a significant price correction event occurs.  Timing market phases for your strategy + buying right are your keys to success. 

@Phil Wells

High end product is always volatile. Ride the ups high and the lows to the bottom. People don't pay exorbitant rents to be able to walk to work, they do so for the lifestyle associated with living in cosmopolitan areas. I think it's less about WFM and more about Covid's impact on the already fickle business of "fun". Housing product tied to entertainment, travel, and hospitality will be impacted moreso than product that is not tied to this. These things will come back, but their owners and investors have been crushed now and many will be licking their wounds for a while. I wouldn't put a dollar into that kind of housing product now unless it was a speculative play where I expect a quick exit and a nice check to go with it. I'll let everyone else ride those assets down and look forward to buying them when investor sentiment is maximum bearishness.

This is a tough time to raise rents. I have acquired some very under rented units through this time and will say that I will likely ask for a small bump from these tenants and do my best to keep them around if they're good tenants. Anything that's 75% of market rents or above I'm not raising. I'm only buying properties at prices at I can sustain that with, though.

@Michael Taylor

You're wife's right about not buying in cook county. Why bother with the tax law, the horrible court process, and the anti-landlord legislation. If you find a steal there, buy it. You've got Indiana right next to you that's extremely landlord friendly and better cash-flowing, and wisconsin on the other side. Let's not forget all of the markets that are further away from you, which will force you to landlord without being present at your property (if you master this, you will thank yourself for investing the effort to learn it). 

As far as timing goes, just bake the risks of the current market into your purchase criteria and find a deal that meets it. If you're worried about income, hunt until you find a cheaper deal that considers the current economic risks. Find a good wholesaler, or if you have the bandwidth try out a marketing campaign.

I've bought a property once a month every month in good condition for no more than 40% of its current market value since the start of everything Covid. I've got a substantial acquisitions engine in my business that makes this possible, so for you... set the bar at 70 or 75% of current market value, roll your sleeves up, and scrap!

@Justin Lee Taylor

Killing it man! Next stop, 10 deals a month :)

I used to think there was a best answer on this age-old forums topic, but as I've answered it each time I've realized more and more that it's highly dependent on what the individual wants for their portfolio & how their lifestyle preferences play into their financial goals.

For me it's easy: I'd use the million bucks to build a money printer. 

I'm the enterprising type, and my answer is going to be very stereotypical of this. If I didn't have much money, I would build a business. I'd start small and keep a heavy cash reserve so I could experiment and screw up. It would have to be scalable. I probably would not buy much in the way of assets. I would use the money to build a money machine of active income, since I have the time and desire to chase revenue. When this business was stable and took me to my income goals, then I would start investing everything above my desired "cash reserve" to keep my business operating with a nice safe buffer.

Ironically, most people don't just come into a million bucks in cash without having already accomplished what I've mentioned above, usually with a much smaller amount of money to start. 

Sure, that's what I do too and invest heavily and exclusively out of state. What I'm saying here is that picking, managing, and relying on a property management company as a remote investor is not necessarily what a lot of people who are newer or have smaller portfolios think it is. Stuff goes wrong, and property management companies perform at varying levels- none of them perfectly. This shouldn't stop investors from going remote and using them, but the investor who chooses management poorly and doesn't ride em will be punished. I see it happen all the time, and I tend to find the investors approach as flawed as the management companies' operation in most of these situations.

@Robert J Carlson 

Number of posts is purely correlation. It's all about quality of contribution. There are plenty of faces that pop up on this forum a lot that say a whole lot of nothing as well.

I would say I respect the posters who have a range of experience, have actually done a lot of deals, and also have bilateral opinions that see what may be legitimate and illegitimate about both sides of a topic tend to earn my respect. If they have a lot of posts, it just means that I have a higher chance of encountering their wise and often helpful advice more often. The last bit is when you hear the popular investors here speak about topics they specialize in, and shut up about the stuff where they have little experience. If you own a real estate brokerage and 5 sfr rentals, I want to hear you talk about retail real estate, and will be highly dismissive on advice regarding acquisition strategy.

I really enjoy posts from Brian Burke and Chris Clothier. Track record outside of the BP universe matters a lot to me. Without that, it's like getting a personal trainer who's out of shape.

@Adam Blachnio 

Lack of familiarity and inability to delegate effectively to management are the biggest fundamental hurdles I see investors encountering when investing remotely. These have little to do with the property's location, moreso an issue of the operator not being able to execute well. 

@Jordan Lucas

$100 mill is a lot of money, but if you really want to build a business you can absolutely reach that. Just make sure you set your money goals in a place that allows you to also meet your lifestyle & personal goals. 

If that doesn't make a lot of sense- I mean, if you want to have a small family that you can support, live in a million dollar house, have a couple cars with one nice toy, and eat out at a nice place a few times a week... thats how much money you need. After that point, maybe you can focus on doing the kind of work you want to do, having the time and flexibility you like, etc... Money is a tool for as long as you need it to be. Beyond that point, it can be a burden. 

Deep thoughts. Enjoy sir.