All Forum Posts by: Gregory J.

welcome Chris! I'm a newbie as well who recently discovered BP while figuring out how to rent out my house in Shiloh. wound up getting it rented to a great couple stationed at Scott thanks to the help I got here. I love the boat/RV storage idea. here is what I'm thinking. find something between where folks live and where they are going to use their boat or RV. maybe buy a house with a bit of land on it off Highway 50 on the way to carlyle lake or off 15/13 on the way to rend lake. use the extra land as RV/Boat storage. I have no clue what you would do with this after you PCS. Also obviously you have a lot of due diligence in figuring out what certain towns would allow, what you could do under a VA loan etc. you'll have no shortage of people telling you why it won't work. figure out how to make it work! (or figure out for real if it truly won't work then change plans) Best of luck!

I have a residential realtor that I have worked with and really trust. I reached out to her to see if she has someone in her network that she recommends. If I hear back I will let you know. Best of luck with your business! care to share any details on what it is or where in STL?

I hope this doesn't sound like a pitch but I'm curious what other folks know about this. I know other professionals pay good money for Facebook clicks and I accidentally got one for free. 

I posted an ad for something to facebook marketplace and I get a response within a day or two. After the deal was done the buyer asked me what marketplace was and how I knew about it. I was confused because I posted the for sale ad on marketplace, and then they messaged me through marketplace to buy the thing. How did they not know about marketplace if that is how they found me?

I found out they had done a search for something similar to what I was selling and then they were on facebook. Facebook served them an ad for my specific listing and it didn't cost me anything. They clicked the ad and then I guess it brought them into marketplace or something I'm really not sure....

Maybe this is already known about, but I feel like I stumbled upon a gem. If I'm wrong don't hesitate to tell me!

There are some properties that are worth less than $0. You could possibly make money off a repeat auction property, but you are better off assuming the prior buyers are more savvy than you. I mean no disrespect, but if you are just starting out and they are experienced then you should assume they know better until you prove to yourself the opposite is true. If you truly have some kind of information advantage on a specific property and you have looked at enough properties to know this is true, or have an experienced partner, then maybe you found a good deal. My personal opinion is that new investors avoid the rough "detroit-esque" areas of St. Louis as the risks are simply too high. There is a lot more at play than just the 2% rule...

Full disclosure: I'm a newbie investor. I only own 1 investment property. My north city experience is that I work in north city and I drive I-70 every day. I see positive things going on, but I also still find bullets in the parking lot and drag racing goes on in front of my workplace every night. 

For the properties not in North City it is still buyer beware. Walk the block during the day, and then decide if you are willing to walk it at night.

I love the city of St. Louis and I believe it has a great future, but you have to know the 1/4 of a block you are buying on.

I call it the OP FLIP. no clue if this already has a better name. I'm the project manager and the owner is the boss. I'll do everything it takes to take the property up to its highest and best value. I'll develop the scope of work, hire the contractors, and handle the details. Owner holds title (they already do) and pays rehab costs. Target is to get a time capsule house up to full ARV and work with the owner to sell it. In exchange I'm looking for a reasonable fee compared with the value I add.

Has anyone done a deal like this, or otherwise what are your thoughts? Risks?

Her are some situations where I feel like this meets an unmet need:

1. sellers who are savvy about money and in high end markets. They aren't selling to Ug but they don't have the time to manage a rehab. I partner with them to get the highest and best price for their house and I get a reasonable percentage.

2. partner with wholesalers. have them send me deals that don't work for them, because the sellers need isn't cash fast. I can work with them to get the most out of their property.

3. other ideas?

Any feedback is appreciated. Are you a wholesaler who would like this as an option? Are you a seasoned investor who thinks I'm going to screw this up, get sued by the owner and lose everything? Don't hesitate to tell me how I can screw this up, that will help me build a plan.

Greg

STL today article

My favorite line: "a pile of tiles we're strewn on her property, with some beer bottles mixed in".

Hello everyone, I'm a new investor from St. Louis, Mo. I currently have 1 door which was my old house that I moved out of, but researching the process of leasing it out led me to bigger pockets and now I am hooked. I'm currently in the process of laying the groundwork to begin investing by saving a little more cash, getting an attorney and CPA, and devouring podcasts and books.

I'm new to real estate but I have been doing project management, contractor management, and engineering for 8 years. I also have an MBA and am a certified Project Management Professional so a lot of the challenges here are not new to me. I have managed projects as large as $11M with up to 45 contractors under me at a time.

My long term plan is to replace my W-2 income plus 50% by age 40 (32 now) and then retire and go back to school for architecture to work for myself in real estate. I will do this by flipping houses to generate cash to acquire buy and hold multi families with value add opportunity. Very long term plan is to take on some of the beautiful 100+ year old brick buildings in St. Louis and transform them to meet modern needs while preserving their historic beauty.

While I'm still planning and saving, I am also anxious to jump in. If there is something I can do for you let me know. I would love to partner with an experienced out of town investor and work as a project manager for you. Or if you need something simple like someone to drive by a property or scope out a block to see what it looks like hit me up! 

Originally posted by @Account Closed:

@Gregory J. Yahoo has been around a lot longer than Google, and you can find what you want on Yahoo.

 I did the exact same search on yahoo and the first result was actually accurate! The first true yahoo search result was a real article that described how to compare rates over different periods accurately.

The only downside was that the first page of "results" looked identical and were crappy ads. hopefully the searcher is savvy enough to look for the fine light grey line and somehow distinguish an ad from a result.

regardless I really don't care what search engine you use. I care that you use the right formulas when considering the most powerful force in the universe.

Originally posted by @Account Closed:

@Gregory J. You should use a real search engine like Yahoo. Good luck.

 I don't disagree, but lots of people use google. My purpose was to point out specifically why and how google was wrong in this case. Algorithms can't replace true understanding. (at least not yet). To be honest though google is still my default SE. Why do you feel Yahoo or another SE is better?

I noticed when googling "how to convert annual interest rate to monthly" it consistently gives the wrong answer. Dividing your annual interest rate by 12 ignores what Einstein described as the most powerful force in the universe: compound interest! your monthly interest compounds over the course of the year. The correct way to convert annual interest to monthly is:

1 + r_{annual} = (1 + r_{monthly})^12

The difference isn't staggering when looking at just one year, but of course many of us are in this for the long term and that's where it does matter.

To me, the biggest implication is in performing accurate Net Present Value (NPV) calculations. I know NPV isn't that popular of a tool on BP but I use it for all kinds of decisions that have different timing, different interest rates etc. things like cash on cash return, the 1% (or 2%) rule, 50% rule are ok ways to begin analyzing an individual deal, but NPV is the best tool for comparing deals and decisions that are very different. I'm not going to explain all the details of NPV here, but basically you convert any deal into a schedule of cash flows and NPV lets you understand what those deals are worth in today's dollars. It helps you compare very different questions. It is the time value of money; finance at its core. In my own personal life I have used it to answer questions like:

Do I pay down my principal mortgage by X amt to eliminate PMI XYZ months early or do I pay my student loans off early or do I save that money for a year in a savings account to invest in real estate assuming I could earn a certain rate? How does this change if I sell my house in 5, 10, or 20 years?

Should I invest extra in my 401(k) or get taxed on those dollars and invest it in real estate? (assume a certain return or fill in the details of a specific deal)

Should I sell my house now or rent it out?

The stock market is a scam for slaves who work until they are used up or dead, but my W-2 employer believes in it (and this is probably why). They match my contributions to my 401k 1 for 1 up to the first 3% of my salary. Should I keep that money after tax and invest it in RE, contribute to my 401k for the long term, or contribute enough to get the match and then withdraw it minus taxes and penalties to invest in REI? What if I don't withdraw it until I reach financial freedom and my income tax is much lower?

These questions are usually complex, seemingly different, and we have a tendency to answer them with feelings and mantras, but not real analytics. NPV gives you the tools to answer these with data. As long as you can project monthly cash flows in an excel spreadsheet and learn to use the NPV() function in excel then you can compare almost any decision or deal with NPV.