All Forum Posts by: Jay Hinrichs

@Account Closed  going to throw in a plug for Bend... its totally under the radar there is a new 4 year state college being built bringing in 5k new jobs to a town of 60k... chances for appreciation is far greater in my mind than any of the so called cash flow markets out east. The reason is Oregon has super tight land use laws.. Unlike Texas and other areas were new construction competes with old stock and keeps values basically in check. Plus   ease of management.. No condenser units being stolen or needing to be caged ( think Memphis) A nice little 4 plex in Bend could be a very good play right now IF you can find one.  

If you decide to go out East and Invest do not get sucked into buying low end rentals.. And don't get sucked into buying from So called agents or experts on the west coast that just front for flippers out east ... Start with very good property managers in the markets your interested in.. ( many times they will even have clients that want to sell and you can truly go direct)  and ask them for some advice on areas.. then talk to appraisers etc.. Be very mindful of those trying to sell you properties that do not live in the market

Hire a good realtor that specializes in new construction and represents builders for a living.  The we buy houses signs very seldom buy lots or land and they are only looking for the home runs.. Have just a tad of patience it will be worth thousands to your bottom line.

Inundated ?  in the land of buy and hold... ?

With crowd funding or any pooled investment its all about the sponsor.. The crowd funding portals are nothing more than brokers bringing the investor a deal together and making a fee to do so.. The portals are using to some extent this hype that is crowd funding to crate traction.  However you cannot rely solely on the portal to vet your potential investment. 

And in many cases the deals you will look at are the exact same you would see with any good HML.. I have had a half dozen of my projects funded through crowd funding portal.

And talked to a few more, and was pleased with the experience, the folks we ended up doing business with did do a good amount of background and Due diligence on us and the assets.. However our projects were just simple buy and hold SFR's so pretty vanilla stuff.... Many now are moving into larger commercial deals that have large strips of debt ahead of the equity ( IE the crowd funding investor) these are the one's were an investor needs to do very good research on the project and more weight must be given to the sponsor as Brian pointed out... Crowd funding like all things new brings out a lot of newbie types that are putting their first deals together.

@Christopher R.   then you have to rent a car... Motel room  meals out.. etc etc.

I know when I go from PDX to the south be it atlanta or whatever it cost me 1500 to 2000 per trip.. of course I buy a first class ticket so my air fare is a little, but I get a free checked bag :)  Its one months rent in most markets to visit your property but if you have multiple properties then things get cheaper  but still a cost

@Kiril Stawrew one of my mentors was the President of a national brand public company.

He started in sales worked their for 30 years worked up to become president.. got great retirement package at 52.. but having all the contacts he had over the years when it became know to him that the parent ( Nestle) wanted to sell this division he put together a group of investors.. ( colony capital and bass brothers) bought the business received a few million shares for doing the deal... His handpicked president that took over did very well.. Sold to another international company  for 110 a share and there you have it.. wait till your stock becomes unrestricted sell pay tax reposition and life is good.

But knowing him over the years and being in business with him. he had some great thoughts on success many of them simple.. But one I like is you have to replace yourself if your going to move up.  Another was he ALWAYS returned calls the same day even if it was for his secretary to tell the other person he got the call and will call back at some other time. Lastly customer service he was running one of the largest food frozen good companies in the US... He would take 2 to 3 actual customer complaints and call those  customers personally.. Some pretty funny stories he has of taking to ( mainly mothers an house wifes and get their feedback on what was wrong with his mac and cheese). 

As I started in RE one thing I know that is a pet peeve for me is those in the business Not taking calls or not calling back in any timely manner.. If I had one suggestion its answer your phone get back to people especially if your trying to buy properties wholesale I would always endeavor to answer the phone live not go to a service.

@Greg V.   great point of visiting the properties once a year.. I think this is very much overlooked when running pro forma's on out of state in vesting.

Especially for those in CA.. were they are usually investing somewhere around or east of the Mississippi River.   and especially if they only have one or two properties.  The travel to the market many times eats up 5 to 10% of additional cash flow that is never projected in the returns equation... So if you have 1st month rent placement fee.. 10% management and in 10% vacancy 10% maintenance then 5 to 10% for travel.. Etc etc. you can see how those that maybe do not get the same return at home but can handle the properties themselves.. can save 20 to 30% of annual fixed cost's thereby making their local purchase's more appealing than they first thought. Not to mention the real risk of getting a house totally trashed.

Agree 100% with you regarding management.. changing managers can and usually cost money for the investor.. finding the new one. dealing with tenant issues during a change etc etc. 

@Jamie Montpellier   prime A can run lower than those numbers.. I have 11 what I call A's and they are always full so I have no vacancy factor.. maintenance costs 2 to 3% and that is just filters ... but these homes I brought brand new 5 and 6 years ago.. same cannot be said for used homes generally

@Terry Hershberger @Wes Brumit   my F up  I meant Wes.. Whats your take on how CA home owners can afford 400k homes where as opposed to TX homeowners buying 150k  

And thank you I try to stay happy investing... Does not always happen but we try !!!

@Alex Silang Those that I personally know with 8 figure plus net worths got them in a few ways.

1. inheritance

2. took their company public when stock was unrestricted sold and cashed in.

3. inherited family business and sold it to a public company ( think Garbage)

4. created company that leverged up many partners and bought path of progress RE

5. Got into bigger deals  keep rolling up into larger deals and got very fortunate to bring in pristine equity partners.

I personally do not know anyone who got anywhere this kind of net worth making 200 to 500k a year and just saving or investing modestly IE 8 to 9 % a year.

The of course there is the right place and right time hit a home run deal but those are in the same space as the lottery