All Forum Posts by: Mike H.

I think out of state investing is more than just picking the area and some of the key metrics in terms of property values and rents.  I think you have to look at the product type too. Find the right niche in the right market and you might really be able to do something special.

Are you going to buy for STRs or LTRs?  Are you going to do fix and flip? Build new construction? What size product do you want? 1,000 to 1,500 sq ft? 2,000 sq ft? 

Depending on the market and the product type that you choose, you'll get a better idea of what makes the most sense. 

I will say this.  I think finding an area where the property taxes are low is a big first step.  Las Vegas looks good.  Tennessee is good too. Illinois is an absolute nightmare. Its something that most people don't factor in when they're running numbers.  They're looking at price point of homes and rents and thinking thats it.

But there is a HUGE difference in numbers when your property taxes on a 300k property in Tennessee is $800 versus the same 300k property in illinois you're paying 9k a year in taxes as an investor.   And those are actual numbers here on some properties I'm familiar with.

And believe it or not, the rents are actually about the same for both. 

@Daniel A Drummond

Just curious.  But what were some of the reasons you decided you wanted to pursue investing in real estate in the US? I don't know much but I think I've heard that australia real estate has been appreciating at a pretty good clip.  Do the rent to values simply not add up?  Are fix and flips not really an option there?

One suggestion I have is that once you identify a couple of markets, I would look to partner with someone in those markets in your investing.  

If you don't want to hold rentals in a partnership, maybe what you could do is split the deals so that you get a hold and then your partner gets a hold and then you get a hold and so on. But having a partner when you're out of the country would make things a lot less stressful and mitigate a lot of the risks.

 I've seen the mid term rental stuff.  But I just don't see how that works well.  You're guaranteeing yourself turnover every 6 months or so.  And its a smaller renter pool so what if the property goes vacant for 2 or 3 months?  I'm guessing you'd get a premium for being a mid term rental.  But I don't see how you can charge a premium big enough to cover those gaps.  Not to mention, you have to furnish the places too, I believe.

There is no other REI strategy that is going to build wealth greater than buy and hold. Thats just a simple fact that nobody is going to convince me otherwise. Anything else is just a job to where when you stop doing it, the money stops coming. And you have no multiplying factor working in your favor.

Buy and hold is all about buying right and cash flow so you can control (i.e. hold) as many properties as possible.  The longer you hold, the more the rents go up, the more principal paydown amounts go up and the more appreciation you will earn.

If you had 10 million dollars of sfh's 10 years ago, I would venture to say that same portfolio is probably worth 13 to 15 million dollars today. And if your rents were 90,000 a month on those homes back then, they're probably closer 130k a month now. And so on and so on.

Regardless, buy and hold is the best way to build wealth.  You have to buy it right and have it cash flow from the get go - even if only for a little bit.  And then over time, the snowball gets going down the hill and every way real estate makes you money, it will make you even more money over time.

It seems like you might be trying to over complicate things or else maybe there is some other issue you're leaving out.  If you want more capital, the best way to get it is to do a cash out refinance.

But it sounds like you are trying to "bring in capital" to refinance at a lower amount so your mortgage is lower.  That doesn't make much sense at all. Are you thinking that an investor is going to take less of a return than the bank/mortgage you're paying?  Thats not going to happen.

How much do you owe on the property? How much is it worth?  And how much is your monthly net profit after paying your current mortgage and expenses?

But it almost sounds as if the scenario is something like this:
You owe some amount, lets say 500k. And your mortgage payment is 3,300 a month at 7%.
But you're trying to find someone to give you say 100k so you can reduce your mortgage to 2660/mo.  And yet have the investor take less than the 640/month that you're paying on the mortgage.    And if so, how much less are you expecting them take on 100k investment? 

It just doesn't make sense what youre asking here.

How in the world does crypto make any sense.  Its nothing but a speculative play on an investment that literally has no value unless more people continue to buy it. Even if you could use it to pay for things (which you can a little but nowhere near enough places take it), the issue is how is it possibly better than just using a debit or credit card?

Your security for crypto is absolutely terrible.  If someone hacks your bank account, its insured and you get it back.  if they steal your crypto, its gone forever.  And these crypto exchanges have been hacked or they themselves have stolen money out of accounts.

If you like ponzi schemes, then crypto is the way to go.  Just time it right so you buy before the suckers go in and you sell before everybody else gets out.

But I just don't understand how you can possibly believe that crypto is better than cash.  Cash is digital too with the use of credit/debit cards or ach.  And its insured.

The only thing that makes crypto go up is to have more people want to buy it.  But what are they doing with it other than holding it and hoping more people buy it.  There literally is almost no value in using it.

 Very interested in how you're able to buy framing material in bulk to save 25%.  Are you buying direct from the mills? How much bulk are you needing to buy?

 Just curious.  But what would you say the estimated premium might be on an aframe in sevierville/gatlinburg? 

i.e. Lets say the typical gross rent for a 1 bedroom cabin is 50k to 58k. What do you think a 1 bedroom aframe cabin might be estimated at?
Or a 2 bed cabin estimated to bring in 60k to 70k.  What do you think a 2 bedroom aframe cabin might be estimated at?

And do you think that it has to be a full aframe where the roof line goes down almost to the ground? Or could it be a partial aframe where the outside walls are maybe 4 feet high and the roofline goes down there and maybe extends over the walls so it appears to be more of a true aframe?

Lastly, what if the main level still had 8 foot ceilings all the way around instead of angled walls by using dead space there on the outsides?  Would that take away from the aframe appeal? Or is the value of the aframe literally the appeal of the exterior pics?

 As always, great info.  Maybe I need to get back on the phones myself.  I think my two employees tend to be more order takers and not really closers. I'm also toying with the idea of getting my realtor license and seeing if I can pull in some revenue by offering to list their property if they can't agree to sell at a price that makes sense. 

I've always been very interested in the entitlement side.  I just worry about the risk with that.  Are guys buying these larger parcels and then entitling it? Or are they putting in under contract with some lengthy option to buy contingent on it being entitled?

I know a guy that I met a few years ago that used to work for some california permitting or zoning office and he now offers some educational/training on entitlement processes and such. My concern is always who would the end customer be and, if i was successful, could I find a buyer for the land?  I don't want to be a big time developer and build a bunch of homes.  But I have always liked the idea of forced appreciation. :-)

Are either or both of these units that are property 1 (the main house or the adu) generating any rental income?   Do either of them have any equity? If so, how much?

I don't understand what you mean by equity position? Is that a heloc on the primary? Is the loan on the adu a standalone loan that only applies to the adu?  If so, then why don't you just get a new heloc on the primary assuming you could pull more money out. 

Your first mortgage at 3% doesn't change.  Your loan on the adu doesn't change (or at least I don't think it will but I don't really understand that loan).  And then you can use money from the new heloc to buy your next property.

But again, is this property being rented out?  Is the second property you want to buy going to be rented out or are you moving into that one?