All Forum Posts by: Fellipe Novaes

The only area I almost closed a deal with positive cash flow in California was Fresno, which I offered $235,000 for a 260K 4 studios, a 3bd 1 ba and a 2bd 1 ba next to the hospital in downtown Fresno, which would generate $3,500 with definitely some nice cash flow there. It was far from being a war zone, it was all rented, nice people, but was a C or C- neighborhood. The owner had a second mortgage on it, and he took off market because he got offended with my $235,000 offer. Apparently he is not very negotiable on his asking price. He is living in a senior community I was told, and maybe not too concerned about this sale. I tried to match but it was too late. There is a lot of speculation about the bullet train station being constructed near by, but the issue with water, unemployment and crime there is to be considered. North Fresno is nice, but little ROI there.

I live in Fresno and know the exact property your talking about. I thought about that property for a few seconds, and the reminded myself where it was located. In my opinion you're probably better off not having had your offer accepted. That's a rough area, with nothing to indicate it's getting better. That's not one I'd want to try to manage at a distance.

Hi Ryan,

I am glad to know that. I've considered that property because it was next to a large hospital, possibly it will be reasonably close to the bullet train station and eventually a renovated downtown. So there was an expectation for the appreciation and immediate cash flow, consequently the most appealing feature was the positive numbers. You might be right, it could have been bad having issues with tenants all the time, but I had a nice guy there to do the management for me, he is a realtor there and I can tell he is honest and hard worker man. I only spent two days in Fresno to get to know the area, and I drove like 15 hours per day. I really liked the area near the river park mall for example, it was a neighborhood with a lot of trees and nice homes. I also saw how that belmont ave is a war zone belt, or the fourplexes next to the art museum, that even though look good and new has an area dominated by gangs. I went to see one of these fourplexes and one of the units I was looking had a shotgun hole on the door with several candles around a guys's picture. The lady in the building in front said her husband was also killed there. So I believe that the look can be deceiving in most unknown places, because even though some buildings were looking okay and near nice reliable places like a beautiful art museum, it can be bad. I saw some nice neighborhoods too. A fourplex next to the University for 280K renting for $800 each 2bd 1ba is not bad. What do you think about Fresno in general?

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Hi Crystal,

Please see my post at http://www.biggerpockets.com/forums/311/topics/195...

The only area I almost closed a deal with positive cash flow in California was Fresno, which I offered $235,000 for a 260K 4 studios, a 3bd 1 ba and a 2bd 1 ba next to the hospital in downtown Fresno, which would generate $3,500 with definitely some nice cash flow there. It was far from being a war zone, it was all rented, nice people, but was a C or C- neighborhood. The owner had a second mortgage on it, and he took off market because he got offended with my $235,000 offer. Apparently he is not very negotiable on his asking price. He is living in a senior community I was told, and maybe not too concerned about this sale. I tried to match but it was too late. There is a lot of speculation about the bullet train station being constructed near by, but the issue with water, unemployment and crime there is to be considered. North Fresno is nice, but little ROI there.

I will share the advice that was given to me: http://turnkey-reviews.com/directory/

also don't fall in love with the property, it is business!

I am going to invest out of state, so if you want to talk let me know.

Fellipe

Originally posted by @Crystal Chang:

I am a resident of Southern California and I'm looking to invests in rental properties. However, after running the numbers, I cannot find a deal that will cash flow with a 20% downpayment (even if I self-manage the property myself).

I want to invest in out-of-state rentals, but because I have a full-time job already, I wouldn't be able to monitor the rentals.

Any suggestions here would be greatly appreciated. Thank you!

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Hi Ali,

The article does cover a lot of different things, and instead of only make it easier it just got me more confused. However, I like to learn most of the data available because I associate things faster this way. I was curious about the insurance on those critical areas and I am glad you mentioned that. Regarding property tax I analysed a map also from realtyrac with property taxes from every county in US. Florida and Texas for example were really high, and It definitely influences on the cash flow. I want learn if there are any tricks like lower taxation, or incentives in some states. I heard advices regarding states with better landlord laws like Indiana. Hawaii was an idea to have a vacation rental, this would be also a home project, like buying a duplex to retire there. I had a good experience with Vacation Rental in Santa Monica, but that was a temporary deal, and I wish it wasn't because can be very profitable with very low maintenance when system is in place. Today I saw an article on latimes that they were discussing to regulate and possibly even ban it there. Unknown! I can tell you know a lot about the subject I am very interested right now (Turnkey Rental Properties), and I checked your website which has a lot of cool stuff. Since you live so close let me know if you are up for a cup of coffee sometime. I am planning to buy one or two properties this month or next. I would really use your advice.

Thanks for the support.
Fellipe

Originally posted by @Ali Boone:

Hey Fellipe, I live in LA as well and also buy out-of-state. As far as markets, interesting article. A lot of random info, but the first map seems to be in the ballpark (without looking at all the specific cities it lists). As for your list, typically VA, HA, and FL aren't known for a lot of cash flow. FL has some trickster cities in there that can work, but I haven't found any big opportunities there (more small cherry-picked hard to find type of stuff). Usually the insurance and property tax rates kill off the cash flow there. VA oftentimes, depending on where, and usually HA have prices that are too high to allow for cash flow. The rest of the markets you list are options, but there are more out there too. A lot of it depends on what you want in a property. Some markets will let you get newer nicer properties in nicer locations, while other markets offer higher returns, etc. Lots to do with preferences.

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Hi Matt,

I am familiar with these areas, and from my personal experience these are kind of very bad areas, with very high crime rate, and it might not be easy to work there. I don't know how easy is to sell a property there right now, but one thing I know, is that the prices they are asking are ridiculous high. All because of the crazy speculation near that area, you now see horrible houses costing twice as much they should, and the margin to profit after a flip is getting compromised, because there is a "limit" that who is looking to buy a house there can really afford. Although I see almost every house in those streets being remodeled right now, which means the market is definitely hot for flipping, I am impressed to see a 48% ROI.

I am now focused on buy and hold in order to build a portfolio to generate cash flow.

Thanks for the info.
Fellipe

Originally posted by @Matt R.:

I just read the two hottest flip zips in LA are 90003 and 90002 so south central. Average roi 48% puts that in top 10 roi flip zips nationally. I never formally flipped but that seems like there is enough wiggle room there to make a go at it.

@Fellipe Novaes

@Manolo D.

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Hi Michael Noto,

I didn't know about turnkey-reviews.com and I like what am reading so far. Thanks for the tip, it is important to hear they are trustworthy.

What do you think about turnkey investment?

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Hi @Manolo D.

Very cool tip about turnkey-reviews.com . I am reading their website.

I have tried to buy a property near downtown, especially around the USC-90007 area, because it is appreciating like crazy, plus the USC village will be outstanding and all the people working downtown that wants to live in a house 5-10 min from work will live there. However I was outbid badly, several offers in cash from investors over the asking price. I then looked for all the surround areas and it has been also a very aggressive territory regarding trying to compete with investor and find a decent deal to do a rehab. My original plan was to find a duplex, which made it even harder. I had two investors with me planning to do a joint venture there, but we had to put that on hold. I heard the margin on the flips are getting very tight. I let you know if we come up with anything like this again.

Thanks for your reply.

1 Vote

Just an introduction to help you help me:

I live in Los Angeles, CA, and I am the Regional Manager for a marketing company. LA property prices are completely out of control, and the amount of bids a house gets just tells me here is not the right market at the moment. I didn't have success trying to buy a house here and by looking for solutions I found Podcast #26 (MemphisInvest) on biggerpockets, I got really interested about what they do because I think buy and hold is a very smart strategy, especially for someone like me who knows how to live frugally.

My Plan:

I am looking for a reliable property, which means it has to be in great condition since I will be investing remotely, and close to decent schools (very important), with low crime rate neighborhoods, and for the last but not least a great management company.

I expecting to generate approximately $1,000 in net cash flow with under 200K Loan amount and 50K Out of pocket. It could be one property or two, or six or 10. I am open to SFH or Multi-Unit.

My Short Term Goal:

At least $1,000 in net cash flow in 2015 and I want to be generating over 3K in net cash flow by the end of 2016 through my investments. Then I plan to do other type of higher return investments, since my monthly expenses will be covered. I need this peace of mind.

First, I would like to hear your advice.

Please let me know if you can give any pointer on any good turnkey companies and management companies in these areas I am referring below. Or if you know a better area for me to invest.

I have been looking Georgia, Tennessee, Indiana, Florida, Virginia, Missouri, Minnesota even Hawaii.

I am not yet convinced about the best place to invest, but I am looking the deals individually.

I saw this research http://www.realtytrac.com/news/real-estate-investi... , about which states are the best markets to invest (ROI). Any opinions on that?

I count with the biggerpocket community to help me reach my goal and tomorrow be a better biggerpocketer to pay back with my knowledge and good deals.

Thanks,

3 Votes

All Forum Posts by: Fellipe Novaes

Fellipe Novaes has started 1 posts and replied 18 times.

Post: I need help. I am looking to do my first Real Estate deal buying turnkey properties to generate cash flow.

Post: Suggestions for Investing Out-of-State

Post: Suggestions for Investing Out-of-State

Post: I need help. I am looking to do my first Real Estate deal buying turnkey properties to generate cash flow.

Post: I need help. I am looking to do my first Real Estate deal buying turnkey properties to generate cash flow.

Post: I need help. I am looking to do my first Real Estate deal buying turnkey properties to generate cash flow.

Post: I need help. I am looking to do my first Real Estate deal buying turnkey properties to generate cash flow.

Post: I need help. I am looking to do my first Real Estate deal buying turnkey properties to generate cash flow.