All Forum Posts by: James Allen

@Jay Hinrichs - which city is it in? 

@Dennis M. - I think you meant @Jake Snavely. 

@Jake Snavely - Hey Jake, I would also take into account what kind of tenants your going to be attracting at $470-$500/month. That could be some serious low quality tenants and if that's the case, the actual cash flow you will end up getting will look a lot different than your paper math looks at the moment. 

@Chris Gawlik - We have a family of four and we have been living with family for the last 3 years. In that time, we've eliminated $25,000 of debt and have acquired 7 rental units (3 that we've completely rehabbed), done a few flips and are in the hunt for our next purchase. It's not been easy living with my wife's family for this amount of time but the pros WAY out weigh the cons and I know we wouldn't even be close to the position we're in now had we not chosen to do this. I should also mention the kids have great relationships with their grandparents which is a nice bonus. 

@Frank Boet - The truth is no one really knows although my personal opinion is that it won't crash but maybe just slow down. I can tell you for a fact that if it was to happen it wouldn't be for the same reasons in 2007. We're not dealing with the same subprime mortgage crisis that had us in the last recession.

@Russell Brazil brought up a good point when I posted a while back about noticing a slow down. He mentioned that when talking about a real estate crash on the national level, it hardly ever happens as it's mostly a regional thing. The last national real estate crisis before the 2007 crash was about 80 years ago.  

All that to say, I'm still buying if the numbers work but deals are no doubt getting harder to find. 

I personally like to go for a bit of both. I try to find cities with strong fundamentals that still cash flow pretty well. Then I try to identify up and coming neighborhoods/subsections that are seeing signs of either gentrification, new developments in the city's economic plans, new construction, quality retail moving in the area and other signs of an up and coming area to give me the best opportunity for appreciation. Aside from this I try for at least decent schools and solid crime rates in addition to a median income that would equate to a solid reliable tenant. Typically C to C+ trending B areas. 

My wife was always a spender. Maxed out credit cards as a young adult, spent her paychecks the minute she got them, you get the point. When we got married, money was one of the biggest things we'd argue about. I wanted to save, she wanted to spend. I realized fast that she's never going to listen to me because I'm her husband and at the time I didn't really have a track record to add credibility. 

How did I end up getting her on board? I asked her to read "Rich Dad Poor Dad". After she read that book, it just clicked for her. She had to listen to someone else break it down better than I could ever explain. Since then we've been on the same page and I couldn't have got this far without her. 

I'm not sure where exactly you're looking in Alabama (city, neighborhood, subsection) but at $550 rents/$25-35k properties, I wouldn't expect reliable solid tenants. 99% of the time, when it looks too good to be true, it normally is. It may work out on paper but between higher maintenance, vacancies, evictions, etc. you may find the numbers in reality are much different than on paper.

I also see your in California. I can't recommend enough to pay for a flight and go visit any area you are considering investing in. It can change your perspective on an area dramatically. 

I've lost bidding wars where I've offered cash and over asking price on a good deal only to find out the winner offered less than me. The key reason? Terms!!! Found out on one of those deals that the buyer had no contingencies including 0 day due dilligence, short close time and a ridiculous high earnest money. I've even lost before to a lower offer because they felt more comfortable going with an well established buyer with tons of money in their account vs mine with still more than enough to close on the property with cash and then some. 

Point is you just never know and I agree with many others on here that you can't just jump to conclusion. The easy way to find out though is check the county assessor records online. It will tell you the current owner and previous owners too. 

yes I'd be curious to hear an update on this deal. Sounds amazing what you've been able to accomplish at such a young age!