All Forum Posts by: Jeff C.

We pretty much all started on less. Get it done.

How much you'll have to "deprive" yourself to achieve a decent savings rate is of course largely dependent on your income. If you're looking to put away $30k a year and all you're making is $30k, then no degree of asceticism is going to do the trick. Your time and effort would probably be better spent looking to increase your income. Now if you're making $300k a year and consistently have nothing left over, then yes you probably have a spending problem and it's time to analyze that and do some realignment. 

I don't focus so much on not spending money as I do on extracting maximum value from every dollar I spend. There's a right way even to spend a lot of money. I like nice things. However I'm not a retail buyer of anything.. from my home, to cars, right down to my socks. For example I own, and have owned, quite a few high end swiss watches. I wait until I spot great deals, buy and wear them for a few years, sell them and get my money back (and often times more). My aggregate cost of owning them over the years is less than zero (other than the opportunity cost of funds). I bought my house, which was certainly more house than I needed at the time, at a trustees sale well below market. I take quite a few vacations (roughly 40 countries so far), with the airfare mostly being paid for by miles accumulated through putting business expenses on my credit cards and collecting sign up bonuses for said cards. I accumulate hotel points in the same way. I also never buy new cars. I prefer to let some other sucker drive them 10-20k miles first and lose 40% of their money.

I save most of my income, but I don't feel deprived in the least.

Things certainly may be done differently in TN, but here you can't even bid without having the funds on you to cover your bid. You pay up then and there, in full.

Run the comps for 2/1's. Then run some comps for 3/2's. How much more are they fetching? How much will it cost you to do the addition? Compare the two numbers. There ya go. Also of course factor something in for the additional time and aggravation, which could be significant. You may also find that 2/1's sell in the area just fine. It's unlikely that yours is the only one. I'm not entirely sure what you mean when you say the "property is large enough" to accommodate the additional bed and bath. You mean inside the existing footprint? If so that's not really an addition, and is an easier path than building it from dirt.

I owned some duplexes in Austin from 2006 to 2016 or 2017. Can't remember when the sales closed. I rarely ever had any vacancies longer than a few weeks or a month. Cash flow was good having purchased at 2006 prices, but values had just risen so much over the years that the return on equity no longer made sense so I cashed out and folded the money into my fix & flips.

I'm quite on board with the sentiment that what happens 10 years from now is not my problem. That said, we also don't cover up problems as they'd likely manifest themselves a lot sooner than 10 years from now. Exactly how bad is the current driveway? It would have to be pretty dang bad to not serve as something able to be driven on. I'm of a mind that it's better to leave something alone than to halfarse it. 

It's easy to want to skewer flippers for not fixing everything to perfection. The funny thing about that is, while buyers like to demand perfection, they rarely want to pay for it. In the end you have to deliver what they're actually willing to pay for.

Given that tax season is upon us, the sting of California income tax is still fresh on my mind. As much as I daydream about escaping it, what keeps me here is that a smaller slice of a really big pie... is still a lot of pie. There is just a heck of a lot of business to be done here. 

I've done it a couple days a week for nearly a decade. Take your best guess, figure the property is a bit worse than that, and plan accordingly.

@Arbi A.

Ouch. What a hard lesson. Did the ultimate resale price end up being much lower than anticipated? I'm trying to figure what the path to profit in paying 83% of ARV for a property that needed major repairs was supposed to be. Frankly, those numbers barely make sense even with zero rehab cost.

Mark, It's obvious from your picks that you're just choosing the cheapest areas. Keep in mind that the market price is effectively the aggregate opinion of the entire populace of how desirable a place is. Ask yourself why nobody in the entire universe really wants to be in these places. As appealing as the idea is that you've figured out something that the entire rest of the world has not, it's quite a bit more likely that the cumulative knowledge of the populace is pretty spot on. Familiarize yourself with the investment concept of a "value trap", and make sure you don't fall into one. 

Have you actually gone to these areas and hung out? Go for it.. see what you see. Oildale is comprised of a lot of different areas, some much more tolerable than others. The pockets of newer housing in the far northern reaches aren't so bad, but they're also quite a bit more expensive, and I have a feeling that those units aren't what you're looking at.