All Forum Posts by: Jeshua Patrick

@Hani Alomar if you are concerned about a market correction then maybe @Scott Trench has a good strategy for you in his book Set For Life. His philosophy is to buy 1-2/yr to balance out market cycles. If you find markets that have stable populations and rents you will be at even less risk if your numbers are good to begin with.

@Maxine Kunimura I learned the lesson you are learning earlier this year. I found a 2-story house with a partially finished basement apartment that had a significant amount of deferred maintenance. ARV was around $350k. They were asking $185k but the property needed about $150k to get back up to code. I had pre-approval for $250k with rehab and probably could have gotten up to $300k. I was required by the bank to have a GC quote repairs and was only able to get 2 to even come out and one of those was my agent because I didn't own the property. I now know why "cash" (hard or private money) is required to do rehabs. GC's worth their salt won't waste their time quoting jobs you can just walk away from if the numbers don't make sense.

@Jay Hinrichs fair point. Hadn't thought of it that way. I am curious though, and maybe I misunderstand depreciation completely, but isn't depreciation a double edged sword? I mean, it basically allows you to defer taxes on income earned provided that income is spent on real estate correct? I know it's a little more powerful than that if you use leverage but if/when you choose to dispose of the property and take the cash you have to repay those taxes correct? Isn't that what a 401k/IRA already does? So, if that is true, why would it matter? This leads me to another question since it's been brought up. If I'm going to use my retirement account as a RE investment vehicle, since a ROTH doesn't defer taxes but avoids tax completely on future gains, would it make sense to convert a conventional retirement account to a ROTH and take the short term tax hit in exchange for the long-term tax savings? Why or why not? Is there someone more qualified to answer these questions? Finally, if notes are a better way to go, who is reputable in that field to help me navigate that area of investing?

@Elizabeth Miller definitely. Thanks!

@Caleb Heimsoth we are feeling the effects currently. Areas within 20-30 minutes of Charlotte that once had relatively stable housing prices have seen prices skyrocket within the last 2-3 years and areas 45-60 minutes outside of Charlotte are seeing an increase in interested buyers as Charlotte becomes less and less affordable for blue collar people. Prices have increased at least 40% in the last 5 years in most parts of Charlotte and are as much as 15-20% higher than pre-recession peaks in many areas. Areas that have seen more resistance to these trends typically have high crime rates and located 30+ minutes outside of Charlotte or in SC which has higher tax rates for out of state investors.

@Joe Splitrock I imagine the reason I am seeing these deals is because they are in more rural areas that aren’t as trendy or have more of a blue collar job base vs cities like Charlotte or Raleigh that are financial or tech hubs. The house prices don’t change much and rents are not as high but that doesn’t mean there isn’t money to be made. I appreciate the referral.

@Caleb Heimsoth do you invest in Raleigh-Durham or outside of it? Maybe we should talk sometime. I am not abandoning NC just looking for better areas to work than my immediate market that will allow me a little more time to make good decisions while I gain experience. Near impossible to do that in my immediate area.

@Caleb Heimsoth not "hung up" on Dayton in particular. As I said in my OP, I talked to someone from there who has 20 doors and had favorable things to say. My curiosity was peaked, the listings on the MLS seemed to further support what he said, and census data indicated that the population decline that occurred there is likely over with efforts underway to revitalize that market so I reached out on here to try to learn more. I know you are a "work your market" kind of guy and I would normally agree; however, the competition here is so fierce that the true deals are gone within hours and unless you have the marketing systems in place to generate your own leads a smaller fish like me will never see it.

@Darrin Carey can you recommend any particular areas for B-C class properties or better yet any areas to stay away from. Also, are there any agents or property management companies I should start developing relationships with?

@Remington Lyman good to know. I would love to have both but I think cash flow is more important to me as a long term strategy. I would ideally like to find properties that I can use the BRRR strategy for growth with strong cash flow for my long term returns.