All Forum Posts by: Account Closed

@Marco Morkous I would get the money and the project dialed in before owning the property. Whatever your bottlenecks are, try to address them before the "burn" period where you're not collecting income starts. That way you can jump in, be done in two weeks if its a simple rehab, and get that sucker filled.

I don't know Memphis, but I do quite a bit of Indiana investing. I wouldn't say property crime has been a major issue in the "C+" areas that I like to target. Maybe you got unlucky with the rock in the window, but it's freaking annoying nonetheless. 

Throw some dummy cameras on that sucker? 8$ each on amazon and they've got the blinking red light too lol

@Morgan Granger

What's the house selling for? Higher the sale price the more I'd be inclined to say do it. If it's a low priced property then I'd be less inclined. 

Also, big difference between OLD wood windows and single pane aluminum windows. The wood ones can be bad, especially if they're in rough shape. If they don't easily open, close, and stay open an FHA buyer may have to require the seller to repair the windows before the loan is approved. Ask me how I know :( LOL

Last bit is- it's not just about returning the value of the project, but also affect on actually getting the house sold vs. not (or how quickly the house sells). If your seller wants to get buyers sooner and have fewer headaches through the escrow period, new windows may offer value to them other than just monetary return.

Hope this helps!

@Braeden Henry flip that money and make it bigger before you worry about passive income.

Unless you're really looking for something hands off. 20k down gets you a 100k-ish property. That's a small C+ neighborhood duplex in the right midwestern market. Thing is, banks want to see reserves beyond the 20k. And right now with Covid, banks are irrationally tight on lending until they have built their own "crash reserves" and feel confident ini their debt performing.

Either way, I think you should stack a little more cash up before you think about real estate. I'm not a fan of "no and low money down" methods- they're too much of an uphill battle in most cases.

@Erin Dorsey Robinson

I did it "wholesaling", sort of. More or less buying low, selling high, and scaling that operation. It allowed me to scale rapidly with little money- the bottleneck in my business model is basically execution. Marketing is cheap, minimal capital is required to do these quick flips, and not a lot of payroll is required to do a lot of deals if your system is designed well. 

I quit my job in 2017, and by 2019 had my first million+ $ net year. It was very fast. 2020 was on track to grow quite a bit, but obv Covid throws a lot of uncertainty into things with banks not lending. 

I love this type of model to make the first million... bc it take very little in resources upfront to grow and maintain high profit margins. The downside for most is it takes a very high level of sales & marketing aptitude and process orientation, which is the reason I would say most wholesalers fail or take very long to reach financial breakthrough.

@Charlie Anne

Honestly, I've seen that most cosmetic UPGRADES at their going costs in even low priced markets (I live in CA, invest in the midwest and south so I see both extremes) are rarely worth the increased rents you'll get than if you had relatively outdated, but clean and well maintained components. Unless something is so extremely dated. Clean flooring, paint, and trim with clean and close to like-new condition bathroom and kitchen materials seem to get market rents. 

Just to give you an insight into biases I may have- I invest in C and B class neighborhoods in the midwest and south where two bedroom units tend to have market values of 50-55k and rent for 700-750/month. 

As far as mechanicals? Replace it if its broken. Windows should be in good shape, but I wouldn't swap well maintained single pane for dual, ever. 

@Taylor L. the printing game is STRONG this time around, especially considering our treasury has strong reserves, we are not as overburdened by structural flaws, and it was "nobody's fault" this time around... and the dollar is going to outperform other foreign currencies in a modern recession. Digital dollars will be created until there is balance!

Affordable housing is just such a nonvolatile asset. It's right there with food, booze, and television. 

Tell me if you agree with the following statement from your experience as a professional investor. I have seen banks take a much more conservative and formulaic position on multifamily lending this time around. For the past 3 years I've heard the commercial lenders at US Bank tell me "The california assets aren't meeting debt coverage at full LTV so we're making buyers who invest in these assets put 50% down". Banks seem to remember a very hard learned (and government regulated) lesson. Thoughts?

@Tony Marcelle I've actually noticed that the sellers we work with most frequently are generally less motivated to sell. Times are weird though. Lots of things are on pause. This might be a good topic to re-assess in 3-6 months

@Joe Cassandra 

It's a good point you make- making sure you check the right boxes in giving someone the opportunity to make their decision without discouraging them to perform their own due diligence. Sometimes it is hard to know what a property is worth with the current circumstances of the property- just to know that if all of the risks and issued could be overcome you may have an idea of what it can be worth. But even that is HIGHLY variable and we the investor are not able to guarantee it. 

Nonetheless, everyone we work with is treated with fairness and respect. We make it very clear to them that as a corporate investor we must make a profit. Nobody is muscled into a deal, or lied to to get them to believe they are benefiting in a way they are not.

@Jay Hinrichs I really hope you called the seller of the property back and gave him at least half of your profits, or else I'm going to call the local DA and report you for fraud! LOL

That's an amazing story. I haven't been in the game long enough to see a 25 year outcome like that but I can only dream. I do love understanding these environmental issues though bc they can cause severe undervaluation that's moreso attributed to fear than the actual consequences of the situation. I know Indiana has Brownfields Laws that protects property owners from environmental risks on previously industrialized residential communities. The key is finding properties in these zones that are also selling very cheap and have high rental demand with a viable tenant class and positive forward trends. 

@Doug Pintarch LOL, there's the straight answer I was looking for.