All Forum Posts by: Mark Ferguson

@Mark Ferguson  as more states legalize pot and since Colorado is building apartments everywhere I also feel that Colorado may be nearing a peek in rental opportunity.  However, I would google Zika virus and look to see where WHO (world health Org.) thinks it will hit America.  I think it  was Brazil that had asked its people not to get pregnant for 2 years?? because of this mosquito.  Anyway.. sorry to be a downer. But In the short term I.. myself would be looking North some...  best of luck.

@Mark Ferguson

I recognize your website URL and I'm sure I listened to a podcast with you on it not so long ago which is probably why it sticks out.  Maybe it was here on BP or maybe elsewhere but I don't remember all the details.  

You have gotten some great advise so far and I'm sure you know what you want to do but just need a little bump in one direction or the other.  From what I recall about the podcast I listened to, you are experienced and if you are thinking there is better money to be made elsewhere while realizing the appreciation you have seen you are probably right.  Now where that drives you to is another story and will probably take some research and recommendations.  

I am located and investing in the Pensacola, FL area so if you need some information about it let me know and I would be happy to discuss the area with you.  This market has a lot of options when it comes to price point and cash flow.  There are great deals to be had here, I would label the competition as fair (not a ton of buy and hold investors but they are certainly here, recently more flippers looking for deals), the appreciation and volatility of the market is pretty flat, high military presence and a very high demand for rentals from military and civilian renters.  I find that the rental market shifts around the $1k/month range with under that being very high demand but worse tenant pool and over that the demand drops slightly but the quality of tenant goes up greatly.  The $1,200-1,600 / mo is probably the best bet as that attracts the military members and young professional renters.  Over about $1,600 and you reduce your tenant pool pretty well.  If you want to be all in for $50k and rent for $1,000 it can be done here fairly easily, just not as easily as some of the midwest areas.  

The main issue I see in this are is property management.  I get questions all the time about who I would recommend and I don't have a great answer.  I have found the local property management to just be fair.  However, I am not actively looking for property management now so that may be why I don't have a good answer.  I have just had a fair experience in the past with one of the larger companies here and have heard horror stories from most everyone I speak to about all the others.  So that may sway your decision but if there are any property managers reading this and you want to come to Pensacola to open up shop, I am going to want one in a few years and I will send you a ton of other military business if you just treat my property like I would.  I think this will be a thorn in your side most places you go though.  

Good luck and if you want any more information about this area let me know. 

@Mark Ferguson - I agree with @Brad Bartlett and look for MF opportunities in a location where rental demand is growing. The market at this stage of the cycle looks the same in almost every market (with the exception of tertiary markets) where the rent numbers make it hard to justify the purchase prices of most SFR's. However, if you want to stay in SFR's I would suggest working with someone who can locate deep discounted properties and give you some equity going in so you are not gambling on appreciation kicking in. The deals are there in Ft Myers/Cape Coral, Tampa, Fort Lauderdale, West Palm Beach, etc. but you need to do more than shop on the MLS to get them right now. Then, obviously, make sure you have an outstanding property management group on your team.

I have multiple properties that I am selling in the major (and some not so major) metros in Florida that all produce cash flow (I run each rental property through the BP Rental Analyzer for my BP friends) and all are at a significant discount to retail.  For example, I am selling a rental in West Palm Beach for $99k right now that has a 10 year tenant (and wants to stay), needs no immediate work, has been rented for $1,400/mo for the last three years and is worth $120k right now.  This is in a WPB market that is 1 mile from the Atlantic Ocean and is appreciating every year.  

I'm a big fan of the Southeast over the next twenty years for job growth and rental demand and love to talk about cashflow!  Let me know if you'd like to talk shop some more and good luck on your decision!

@Mark Ferguson Hey Mark, I occasionally listen to your podcasts. Good stuff!

Can't you unlock the current equity that you have on your CO investments (with a HELOC or a cash-out) and buy properties without selling them. Last stats I checked, CO is still ticking away with a strong economy and positive job growth. I'm sure as a realtor, you may know the first signs of layoff based home sales.

Btw, I'm currently in your situation, rental portfolio with cash flow of around 10k a month. That's usually the magic number for inflection points in our business strategies; do we go multi-family, out-of-state, appreciation-focused-cash-flow, commercial, land or cover a totally different niche in real-estate. It all depends on our human appetite for risk and our appetite for fun. Personally, I'm sorta getting bored of SFR's and ready to dig into MF. It also gives me chance to exercise some syndication approaches (another idea that I picked from your podcast with Michael Blank)

So for a touchy-feely answer, look into yourself and find out what you consider fun and implore what kind of RE investor you want to be 10 or 15 years from now. Do you want to go from state to state chasing the almighty yield %, :) 

Would seem like a pretty easy task to sell...1031 into new rentals and use B2R financing.   I do a half dozen deals or more in most major cities in the northern/central Florida cities per year.    Most rental rates are pretty solid till you get to about avon park.    Anything south of that on either coast tends to be a smaller return.   80k houses can rent for about 1k pretty easily.   10k trailers rent for 500ish.    Good PMs are hard to come by.

A 180k house in the boom that dropped to about 60k in the crash is about 100k now a days.    We have room to grow but its not nearly the easy money it was a few years back.  

@Mark Ferguson

Have you thought about moving into multifamily? Often when owner get 15-20 units they start looking at moving into multifamily to take advantage of economies of scale and higher returns. Multifamily in Florida or Texas may be worth considering.

Mark, I focus mostly on the Collin County and Rockwall County areas.  They have been two of the fastest growing counties in the country for years.  Dallas County is different.  There are many opportunities there as well but I do not focus on it.

If you want more information, I would simply google Collin County or Rockwall County.

There has been a huge amount of media coverage of the growth in the areas.

@Mark Ferguson  Funny you should mention that.  I am paying property taxes online as we speak.  For a property I bought last year for $70,000 it is valued at $50,000 for taxes.  It rents for $1000.  The taxes are $1309.42.

@Mark Ferguson  In Collin County, TX near Dallas it is possible to buy a home for $60,000 - $70,000 and get $1,000 - $1,100 rent.  Which means much higher returns than you are getting for your equity.

@Mark Ferguson  I think you are probably right.  I am not liking the rental rates.  I would be afraid that long term that is a sign that prices will not remain that high.  You might be at a peak.  I would at least put some of them on the market and move to other areas.

So in short... I would take some appreciation profits at this point.  Might do 1031 exchanges to not have to pay the taxes.