All Forum Posts by: Blake C.

@Pedro Preciado Everything Scott told you is true. He knows what he's talking about on this area. If you get these major things done as a part of your contract without adding much to your price you'll be okay. What I was concerned about was that you were spending 44k and have some major issues. 

As for markets, I am a BIG believer in investing near home. I know there are advantages of investing in markets not near you (notably: diversification, and trying to capture a good market. My thought it that Amarillo is good, but if i have anywhere in the USA to pick, it wouldn't be in my top 5. On the other hand, if you have a proven system you can model, thats a major upside. A big reason why I am investing in the area you are looking at is that it is 10 minutes from my house, and I have a few people that have been doing this for 15+ years that I can copy their model. Its proven. The shaky part is, I don't feel amazing about this area in the 15-20 year range. With that said, I don't hate it much, because I have 3 houses within a mile of this one and would buy another if the deal is right. 

Based off where it is and it not being move in ready, I really don't like the deal. @Scott R. is giving you solid numbers as well. Third, this property does NOT have a true cashflow of $250 once you factor in repairs and vacancy over time. I have a feeling with a few strikes of bad luck, you will be break even or worse. 

To put it in prospective, just two years ago, I bought a 3/2/ no garage with wall heaters and window AC. Solid Roof, brick, clean for 49k. Rents for $850. That was a great deal, but I say it cash flows $250, but I am factoring in the harder to see expenses (long term repairs & vacancy estimates). 

My two cents, don't do it. You can do better in Amarillo. Also, I would really weigh your desires to invest here. I invest here because I live here, but I wouldn't exactly choose it if I didn't. 

My thoughts is that if you look hard enough in this area, you can be all in in Southlawn for 50k for a very clean 2 bedroom with central heat and air. Those deals usually require doing the rehab to get it to that point, but that price includes the rehab. If it has CHA, it will rent for 750. If its across Washington in Gables, lower those numbers a little... say 45k or less and 650-700 in rent. CHA is not as important here, but I really hate floor furnaces for the human danger factor. 

This is my favorite part of town to invest in. It doesn't get the appreciation that some nicer areas get, but it has a good solid working class tenant. You can find people here very easily that don't have felonies, pitbulls or no job history. You get those people as applicants, but you can weed through them. 

I replied a few days ago. Washington and 46th is an area I regularly invest in. Which side of Washington is it on. The Southlawn side is nicer than the Gables side. If its on the Southdown side, you can prob get more then 650 for a clean 2 bed. 

As for the osseous. What electrical and plumbing work does it need? Bubbly walls... you might explain more. Could be termites, or it could be a leak. Being an out of towner, thats a challenging situation for you to be in. Who are your boots on the ground? 

@Pedro Preciado Personally i feel like Amarillo is a good area for slow and consistent returns. We don't get high appreciation, but you can make a solid income off properties like this. At 650 a month, you are likely in a area thats not too much of a war zone. Do you know what neighborhood its in? Amarillo isn't too large of a town. 

I have found my best ones from material supply places. They tend to known who the good guys are, who are honest, and who is hungry for work. 

See if the seller will finance them. As @Scott R. said, you are going to struggle to find private money that will lend in the smaller towns. In Amarillo you could find that a little easier. 

I haven't bought from foreclosure auctions. Clearly if you go through a wholesaler your margin gets tighter because everyone has to "get their cut." Ive bought from a wholesaler once and it was a good deal. The best deals were ones I found on my own, off MLS, non-auction, through word of mouth.

The problem is, without significant marketing, its challenging for me to get killer deals more than once a year or so. For you, I have a hard time seeing that happening without boots on the ground locally and building connections daily. I don't mean to discourage you, but thats my 2 cents on the how to.  It can happen, but unless you are trying to take the on full-time, I haven't found a strategy worth the marketing $$ or time. Clearly you have made it happen in OKC, so why not here? May be the same strategy will work. 

The guys I know finding deals in number are spending 20-40k a year marketing for those deals. There is more than one of those dudes out there and thats probably driving lots of local competition (but I imagine this is true in OKC too). Thats leading to a good number of deals for them, but I don't see a middle ground. Im sure it can be done, but I don't see it. 

Therefore I'm doing what Im doing... connecting with the wholesalers, keeping word of mouth rolling, and holding investments as rentals since I don't have to have as big of margin as a flip. Time is on my side this way too. 

How did you make it work in OKC? What kind of volume are you talking?

What price range do you work in?

I know two wholesalers that aren't really active here, but do a little flipping as one of many exits. They mostly wholesale and even keep some as rentals. Mitchell Property Group and Amarillo Welcome Homes. You can find them on Google. They focus in the 60-100k market for retail flips, but often wholesale them before they finish the rehab. 

An amazing person from AMA that was on Bigger Pockets, Ryan Webber, passed away too young. He was a amazing person, experienced investor in all types of exits, and organized the investing club. From what i understand it isn't very active at the moment. Im looking to go to the Apartment Associate meeting run my Karla Ross soon. I think there are a few people that do stuff outside multifamily there... or at least people that do both. 

I find it hard to make numbers work to flip most deals in this market. It seems like finding deals with enough margin left to flip leaves the numbers too tight for me to flip, but still good to hold. Most people I know will just wholesale to buy and hold investors... making a little less, but doing it faster and not paying commissions.  

May be the margins are tight because its a little competitive at the moment in town. Its a very blue color mentality here. With interest rates low and the blue color mindset of being okay to get ur hands dirty, leaves lots chasing real estate at the moment. 

I have chosen to buy and hold as a main strategy. Doesn't mean you can't flip, just the opportunity to do it is low. I did one simi-flip last summer because I found an amazing deal and was low on capital to hold it. It was with a investor buddy of mine that has way more capitol than me. I bought it with the sale to him verbally agreed upon at the start. It was one of those deals that doesn't come around daily. Would have be nice to keep it, but it was also nice to make some money and move on to the next deal. 

Hope this helps. Would be glad to hear more about what you are up to and see if there might be a way to continue to future each others pursuits.