All Forum Posts by: Shawn Coverdell

I am going to take some hits by saying this. First, I am a veteran. Active Army.  National guard. Police Officer, and 22,000 disability claims completed while working for the Veterans Affairs for long time. as a realistate investor, I am a frequent flyer at Home Depot. I can find things better than the managers in that store. Sometimes I am a daily shopper for months on end while fixing up a stinky. I love the 10% discount for flashing my disabled veteran card. but what bothers me is the part where each cashier is told to say, "thank you for your service".  

This bothers me because like the majority of service members I just joined the military to get out of my parents house. have some fun. Chicks dig uniforms! and travel. sign, done. gone. Hired.

I spent 8 weeks listening to some sociopath yelling orders, ran for miles and did push ups. to my knowledge only 2 or 3 people failed the whole ordeal. 

I am not trying put down the military! I am only saying the US political system puts veterans on the  in pedestal because in this country we have a voluntary military and if being a veteran is no longer prestigious who will join? 

We used to joke around at the VA, want to retire at 20? join the military, trip over the first beer can you see, piss yourself, call me. I will get you 3,200/month tax free. you will never have to work again.

I retired thousands of young men who had access to google. 

Veterans are just like anyone else, they just have an amazing strong political lobby. Do what every you can to defend your property and do not fear political pressure!

as they tought us, "shoot, move, communicate"     (the order is important)

Sam, 

Actually our worst unit is our only HUD unit. It is one half of a duplex that I did not get to because it was occupied when I bought it. Original tennant moved out leaving a cat peed carpet and what looked like a slum lord style remoldle. By my standards the unit is a Hell Hole. I mean everything works properly and all but just straight up ghetto looking.

As an experiment and from a suggestion from a slum lord we decided to sprinkle some carpet fresh down clean the stove and turned it over to section 8. 

I guess it depends on your standards/perspectives but  our standards this unit is not rentable. Section 8 inspected it and said it was good to go after we swapped some un-grounded outlets out to 2 prong. so for 4 bucks and a re-inspection we were in. That tenant is still there. She works but has an agreement with her boss to keep her hours low so she can stay on the system. Yes you are all paying for this. 

The good: 4 dollars and couple hours to turn the unit. Same rent as the other side that is nicely remodeled!!!

The bad: We have to get her out of there somehow so I can make it a decent place to live. 

Now this is not a large scale experiment, but it is a real eye opener. Our horrible, nasty unit not only passes Hud inspection but I could not rent it otherwise unless I went with a high risk (desperate) tenant. 

now to be fair, I am told HUD is area specific so it depends on the area etc.

But dam, how sad. Once we find a gentle way to get her out we will never use HUD again, I understand many make a living off these programs and I think that is awesome, but we like our places to be nice and get top rent for the area. I try to forget about that unit, but I just have to get in there with my tools. I have to at least have some standards.

Good question Matt, 

I have many tenants who pay very good rent. They could get the same home 10 blocks up and live in very  nice clean neighborhood and even in a nicer home. I  have asked many of them why?  Basically what it comes down to is that they are "rough" looking and acting people. There attitude will not be very popular in the nicer areas. I would imagine they would be ran off or at best be made to feel very uncomfortable and out of place. My neighbors for example don't have pins in there lips or "my babies daddies", name tattooed across there neck" covering track marks. It's just where they fit in. 

Interestingly, and your gonna think I am lying on this one but this is the truth. I don't miss rent checks. They do pay an occasional late fee, but I have only lost 1 month rent.

The one thing that keeps me investing in F properties is because I can buy a home for cash AS IS with no inspector and comfortabley close the deal on my lap top. No drama. just record the deal. I tuck my Springfield .40 in my pants, load up the tools and dive in. 2 months (on average) and everyone is looking at the new shiny property. Neighbors are watching it like a hawk because we befriended them by giving them free stuff etc. applications flood in. It's rented to, and here is big one, the "best fit" for that property. If the neighbor is a drug dealer, you don't want a pansy office worker tenant. He will not stick around. Got 60K total into it, but now it's worth 110K or so. By the 3rd month after closing, we finish financing and most or all of the money is back in bank, including repair costs. BRRRR method.

zero into it is the secret. xxx cash flow from zero is difficult to calculate. A few years latter, its worth alittle more , can refinance the equity out and turn it into door or whatever. 

I like the fact that there is no limit really. You can just go and go till you  have had enough of the stink. Because the properties are low value, you will not hit a debt to income ratio like I will if I start farming 10 blocks up in that nicer area. I have to pay 150K for same rents and would be harder to finance all money back out. 

Like I said, the Hood is not for most. It is a very specialized area. I was desperate and wanted to retire FAST. It offered amazing cash flow and worked for me. You can do well in better neighborhoods it's just different. 

We are considering trying some beach property because we are close to the coast, but wow, I'm gonna have to hustle to find even mediocre cash flow. But at this point were OK with that. I will probably wait for the market to turn downward and pick up some scraps from the over extended and barely cash flowing investors in that area. 

I know this sounds very negative, but I can tell you there are VERY few success stories. Mostly just people looking for handouts so they don't have to work. I know, it sounds rewarding at first, but it ends up downright depressing. If someone is serious about getting off of drugs and alcohol they just do it. 

Especially Heroin. Those guys are as good as dead. There is such a low success rate of getting off that stuff, it just don't happen. 

We deal with this on a regular basis in the Hood were we invest. 100% talk, zero action. 

....Once they find out that these people are down for a reason, they call us and we pick up there property for about half of ARV. Just bought one for 40K. Looked like an exorcism gone bad. It is rather shocking what a family of people living on the system can do. You just have to see it for yourself to believe it.

But 10K and 2 months work and  it looks amazing. we have many properties we bought like that 60 to 70K total cost and rent them for 1100 to 1300. These things pay for them selves over and over and over. we pay cash, then finance it all back or most of it.  

in 5 years I walked off my 6 figure W-2 job. True story!

I would say if you cannot pick up a human turd with your hands and go to lunch an hour latter, you probably want to stick to better neighborhoods.  I've cleaned up piles of used feminine products stacked waste high in the middle of the room.  Shoveled 2 years of used diapers to get to the pickup buried below so the tow company would take it away. I buy bleach by the 4 packs. I would live to get into nicer neighborhoods myself, but when I run the numbers, I think to myself, screw that man, and I pick up another home in the hood. 

I have seen the most bazaar, pathetic and down right sad, I mean VERY sad behavior. 50 year old men displaying there butt cracks while sporting tattoos of spread eagle women, ridding BMX bycycles up and down the street. Hat sideways, Rap music blasting from speakers on there bikes. 

All I wanted to do was avoid working till 65 for a pension and a social security check like all the rest and I did, got out at 46. It was easy. I did not analyze deals . I just bought  them cheap. If your payment is 500 bucks after all is said and done and you are taking in 1300 rent, AND you got most or all of your money back out. that's good . no calculator needed. If it's a deal, you will know it right away. some I bought As Is just looking in a window.

I don't think you can do that in a decent neighborhood, at least I can't seem to, but this is not for most people. I look for toilets like the one pictured above. Those are the kind of bathrooms I buy. but once were done we get dozens of applications to rent them and there instant equity. Think about it. it don't take a skilled carpenter to improve a drug house. 

So as far as analyzing deals, the hood makes that easy. You just know and buy it right then and there. As Is. No need to pay an appraiser to tell you the place is trashed!  The trade off is that you will be working in an insane asylum. literally. these people do not even seen human. again you have to see it to understand what I am saying. 

at the end of the day though the reward is huge, you appreciate coming home and getting out of there. and you just think, wow everyone I know is in there cubicle right now and they will be there until they prune up and the government tells them they have aged enough to stay home and complain about the bills they can hardly afford. 

All my properties are in the Hood. We buy properties from landlords that self managed and got ran over, usualy trying to help someone who "just needed a hand up". Once they find out that 

I should add, I use PM's on all properties. PM keeps good records and sends monthly statements on each property. We are super responsible when it comes to finances and watch all bank accounts closely. If there is ever a question regarding a payment made or regarding the cost of something, we just look in that particular account. Use a credit card for all business expenses for air miles and easy tracking. 

In 3 years we have never found a use for quickbook info. NONE!  I understand IRS likes you to spend time on books, but I believe my receipts are all the proof that is needed when they come for us.  

I don't on mine. Looks great right? until you go back in on the turn. Once you clean up after a entitlement person you will never caulk them again. and if you ever replace a toilet, the base never matches so you have to spend time cleaning up the line that is very visible from the nasty caulking on the previous toilet. 

Because this is a never ending 50/50 debate, why do it?

OK, this sounds like a silly question but I really want to know if this is necessary and why. We have 19 accuired 19 doors using the BRRRR method mostly. 4 duplexes and the rest are SFH's. Wife has spend many MANY hours trying to keep Quickbooks pro straight over last 3 years or so.

We have yet to ever use quickbooks for any useful reason.  Lenders never need anything from it, I don't, wife don't. When we do our taxes we break our the big table and categorize receipts (which usually have notes written on each one).  Quickbooks does not transfer to Turbo Tax very well for realistate investors. 

I would love to delete this curse from our lives and just use my reciepts. 

Would love to hear some advise on this  area. 

Thank you all!

tell  her to get of the system and get a job. She will be so tired at the end of the day she will sleep right through any of it.