All Forum Posts by: John Chapman

Jon K- I try to actually target both. Candidly, I'm kind of in the midst of reassessing my investment criteria. I've been buying in what I believe are pretty strong residential neighborhoods with ARVs between $110-$140K. Last year, my model was buy them HML, fix them up, and then quickly refi into Fannie Mae financing (within 2-3 months of purchase). I would put them on a 15 year note to minimize interest costs, with the hope that I could tap them for equity in 5-10 years. (Even if that didn't work, at least in 15 years, I'd have a fully paid off house) Even if there's zero appreciation, the equity buildup (assuming no loss in value) would result in a pretty good return. None of these purchases would cost me money using the 50% rule, but they would not cash flow at all either (maybe $50/month). The added bonus of this approach is that I get a larger mortgage (which allows me to control a larger property) at a super low rate. Moreover, I have found that they are super easy to manage (families really like them).

Lately, however, I've been focusing more on cash flow, but I can't seem to figure out a model that works real well. The working class 3-2s (in the 50s-80s) seem like a very crowded market and I can never make the numbers work. They also seem very difficult to finance.

I've noticed you do mobile homes on rural land, which seems very interesting. How do you like that model? Seems like a pretty great way to cash flow. Do you buy with the intent of selling off the land at some point to a builder and/or developing it yourself.

I'm a huge fan of durable flooring for rentals. (I won't do carpet.) My personal favorite is porcelain tile as it's practically bulletproof and aesthetically acceptable here in Texas. Sometimes, though tile is not an option (e.g. a second story with too much bounce.) I've tried laminate but it doesn't seem that durable to me and water really messes it up easily.

I just tried out Trafficmaster Allure in a new house I'm rehabbing and it seemed to come out really. It's got a 25-year warranty, seems way more durable than laminate, is waterproof, and is very easy to install (just need a utility knife). That being said, it's pricy at $1.79 square foot at Home Depot, though you can use 10% coupons and everything. (I would not use this product for a flip.)

I was wondering if anyone has used this product and what the results were. Is it as durable as it appears? Have you found that tenants like the product? Is there a product that is just as good but less expensive? Is vinyl wood flooring becoming more accepted? (I realize this probably depends on the type of rental you have.)

[Jon K.] Sorry, I meant to say I'm looking for 4 and 3 bedrooms (4 preferably)

Hi Jon K. - My rentals are pretty spread out. Plano, Rowlett, Garland, Fort Worth, Farmers Branch, Grand Prairie. I am currently looking for 4-3s.

Hi Bala P - Yeah, I wanted to attend that meetup but was out of town, unfortunately.

Hi Jerry K- In terms of why I jumped in now, I guess it's because I got tired of making excuses for not participating. I work pretty long hours and have 3 kids so it's easy to say I've never got the time. I've also been reading these boards for years and it started to feel wrong about reading without contributing (to the extent I can). Plus, I've made it a personal goal this year to meet more people.

Brian, that comment that I change the box once a week was probably more aspirational. Usually what happens is I have my handy man come out, put the box on the door, and then take apps. I usually remove the box when I go to meet the tenants to sign the contract and collect the security deposit (so the box is really more likely there for 2-3 weeks on average).

I don't particularly trust tenants, but I really don't see much additional risk to giving them a combo and letting them see the place. If they want to steal something, they can come back and do so. Frankly, I think personal safety and getting robbed is more of a risk than anything else. At the end of the day, I'm not sure how one successfully stops a determined criminal

Also, I believe that you've got to have systems in place that reduce how much time you put in this endeavor. There is a risk (which will almost certainly bite me at some point) that something will get stolen or broken. But at the end of the day, it's difficult for me to conclude or even see how the massive amount of time I save will be outweighed by that cost.

I suspect my system and risk tolerance is more a product of my own individual circumstances than anything else.

Tod, I generally do litigation. At the moment I primarily do pharmaceutical litigation (suing drug companies) but I also do a lot of commercial litigation. I didn't know there were other Dallas attorneys here. I'll have to say hello to him.

Thanks for the welcome guys.

I'm probably in the minority, but I just use a lockbox with a key. I pre-qualify the tenants over the phone, and if they meet the criteria, I give them the combo. (I change the combo every week.) Overall, I tend to have nicer houses for my area, but I've also done it lower end apartments that I have. I've been doing it for years and have never had a problem. The way I figure it is even if something get stolen (like a fridge or a stove) replacing it is worth the time I would otherwise spend showing the property and dealing with no-shows. Moreover, if a thief wants in to your property, they are getting in. (I used to regularly show my properties but it was an incredible time suck and I work full time.) I never use For Rent signs because they advertise the property is vacant and the people who call from them never seem to qualify.

Hello all, I just wanted to introduce myself. I've been doing real estate (rentals) for over four years on the side. (I'm a full-time lawyer in Dallas). I've been reading this site for years and but have never seemed to find the time to get involved and participate in discussions. I've basically resolved to change that and have finally completed my profile. I look forward to getting more actively involved and meeting you all.