All Forum Posts by: Jason McCain

Appreciate your responses....

Can anyone offer a review of this company?

After searching through BP I can see they were a sponsor at the summit. Any words would be appreciated.

They are a turn key company operating in the southeast, primarily Atlanta.

Thanks!

I have been knocking this around in my head and wanted to open it up for discussion.

Goal: Create long term passive income
Timeline: Approx 50 years
Proposed Method: Earth Sheltered Multi-family Units

Questions:
1. Is anyone using earth sheltered home designs to do this or have you considered this option?
2. What are your thoughts about the strategy?
3. I believe the unique benefits will create a competitive advantage in most markets, do you agree?
4. Are my assumptions on maintenance costs savings valid?
5. Is the “curb appeal” a major concern or is it offset by the other advantages?

My premise: Given my long timeline these homes will substantially decrease maintenance costs and be more attractive to tenants reducing vacancy, thus increasing net profit.

I suspect my up initial acquisitions costs will be higher than with existing builds so the payoff with reduced maintenance would need to offset this over the long term.

For those not familiar with earth sheltered (google) this would eliminate the need for roof replacements and most of the other exterior work. On the inside of the units I would be using concrete floors. All exterior walls are concrete…depending on the company internal walls may be concrete as well. I hope this will reduce painting expense. I plan on constructing the kitchen and baths with maintenance costs in mind to keep them simple, timeless and easily maintained.

Costs eliminated:
*Roofing

Costs Reduced:
*Flooring (greatly reduced)
*Painting
*Exterior maintenance, including windows
*HVAC
*Exterminator costs (greatly reduces ants and termites)
*Overall costs that you would see with any new construction

I also believe I will be creating a competitive advantage from the home design with the stated benefits of:

*Greatly reduced utility cost for tenants (50-80%)
*Safe from tornados (a factor in my market)
*Outside noise reduction
*Safe from storms and fire
*Increased security
*Less bugs and dust
*Unique design and conversation worthy
*“Green” construction
*Potentially increased yard space

My worries:
*Maintenance savings will not be great enough to offset higher acquisition costs.
*Maintenance savings are overstated by the builders.
*Tenants will think they are weird…not cool like I do.

So, I am seeking opinions…is this as good an idea as I think it is? Thanks for your feedback.

I will also be reaching out those who are currently using this technology to further do my due diligence. If others are interested I can continue to share what I find.

The 50% rule includes taxes...make sure you don't double count your taxes. It does not include Principle and Interest.

A Vegas vote here...is there a conference fee? Thanks!

I want to focus on the area I will end up...Clarksville and Nashville TN. Even Bowling Green, KY.

At least I will be there one day and have family there now. That seems easier than having stuff spread out across the country in 2-3 other locations.

Does make it tougher getting going though because I want to BE THERE and feel like I have a lot more control.

Hey, I'm Jason McCain.

I grew up north of Nashville outside of Clarksville TN and Hopkinsville KY. I am currently a civil servant working for the DoD and I was previously in the Air Force with my wife. My wife is on Active Duty with the Air Force currently. I have lived in Great Falls, MT, Colorado Springs, CO, Tampa, FL and now Los Angeles, CA. Our next move to a currently unknown location will be in 2014.

I have always loved Real Estate and looking at houses. We have had rentals in the past but sold them in 2007 (lucky us), but I got excited about investing again in 2011. Ready to "get in the game" I quickly bought two properties while my wife was in Afghanistan...before she could get home to say "no". One was a "subject to" that I have owner financed and the other is a flip sorta. I bought a foreclosure and then got it under contract to sale within 48 hours for a 20% profit!!! I have closed on it and own it now and I am currently waiting the 60 days before I can close on the sale. I did a 90-day lease option to the new buyers on it with 10% down payment.

While I feel like I have avoided screwing up so far I was just buying and hoping for the best. No real strategy. I have used the last three months to try and figure out what I am doing and why I am doing it. Sounds easy but it has been a challenge to actually figure out why I want to do this and how to make dreams a reality. Through the process I have figured out I want to do real estate investing to create a semi-passive income stream that will allow me the freedom to quit my "day job" and spend more time with my family, travel and pursue other interest. Timeline is ten years from now or the end of 2023 to create an income stream of $8K monthly with no debt.

Understanding what my goal was helped me understand how to do it...from learning from various sources (and a lot of you here at BP) I have decided to focus on multi-family units instead of SFH. I also want them to be within a hour drive of my location. This proximity is by far the most difficult part for me. Because we are still a military family (5-10 years more of this) I don't have a permenant location yet though we expect to retire back to the Clarksville, TN area.

The three biggest things I have gotten from the forums so far are:

1. Reality check...this isn't as easy as it sounds
2. Don't be in a rush just to do something
3. How to run the numbers so I can actually make an offer that won't later
ruin me (still learning about cap rates though).

I appreciate everyone's input to the forums, blogs, and look forward to contributing in the future.

Hey Matt,

I recently did this, and this is my experience...

To answer your first question, yes, I did use that contingency. It presented no problems for me when finding buyers. I had two offers on my property even with it in there.

To your second question, I ended up not being able to do a double close and had to wait 60 days to the second closing. My buyers were made aware of this and they choose to stay with the property for 60 days. I overcame this by doing a 90 day Lease Option with them, which is very easy to do, and it worked out great. The day of my closing they leased the house from me for a reduced rate, about 50% of what rent would normally be (a thank you for sticking this out with me). They also paid me 7% down as an option payment and they had an option to buy the property for the next 90 days. This was in addition to a standard purchase agreement we had for the sale of the property. They actually wanted the option as much as I did. It made both of us feel more secure with the transaction.

So, that's how I overcame the problem. Also, don't forget to get insurance on the property to cover the time period you own the house.

Hope that helps.

Best,
Jason