All Forum Posts by: John Blythe

I'm 1000% sure this is answered about 1000000x over throughout all sorts of threads on here, but am not getting the information I'd like from my initial search and review.

I'm wanting to know what methods different folk employ when trying to figure out FMV, particularly regarding comps. Do you _only_ go through a realtor? Do you trust Zillow, Redfin, etc. for a general range/expectation?

I'd like to run more analyses w/o having to blow up my realtor with so many requests, but don't want to make too many assumptions when all I have is Zillow, Trulia, and Redfin at my disposal.

I'd love to get access to the MLS to save them the time required for this part of the process, but it seems as if getting into the local RE chapter is a pre-req, is that correct?

Thanks for any insights!

Hi all In Keller's "Millionaire REI" he mentions the 30:10:3:1 lead gen ratio on page 216. It makes sense and sounds great. I'm curious, though, what you think the bridge is in between 30 and 10. He says the 30 meet his criterion but that the 10 "warranted serious investigation." What makes it so? Basic analysis of numbers? More info found via a walk through? Something else? Ditto between 10 and 3 (only 3 are worth making an offer on). The 30 are assembled by the criterion and the 1 deal is sifted from 3 by the terms, so I'm wanting to know what mechanisms you think he is assuming for the other two steps and/or what *you* use in those steps to whittle down. Thanks for any input!

Hi, all.

I've seen that tax values on a property can be all over the place based on the locality. A few discussions had mentioned that they tend to be 80-90% of FMV—once more, assuming it's not in an area with a more idiosyncratic approach to the assessment.

I'd imagine it's dependent upon which area one finds themselves in, but are there any good rules of thumb to employ in using them while making offers on properties? FMV is tricky business for newbs like myself, so if something like the assessed tax value could be a guidepost it'd be very helpful.

Thanks for any insight!

Glad to see you out took the advice of continuing to look to heart so quickly! I wish I'd done more vetting of my first property earlier this year. While it now cash flows decently (~150) it is only bc of dumping much more money into it than we'd originally planned. Had a couple near death experiences financially speaking and only have a 10% CoC ROI to show for it.

Great advice from "The Millionaire Real Estate Investor" concerning prudence and precaution is along the lines of "I'd rather pass up a good deal than jump into a bad deal."  

Best of luck finding the next one. Remember: you make your money going into the deal, so fight hard for great terms!

Originally posted by @Christine Mwai:

Hey John, 

That's a fortunate place to be and you seem to have the right questions and thought process. I'll share from my experience. My first few properties I did buy cash but that was because I could not at the time qualify for a loan. I did find that cash offers were in my case accepted on "hot properties" over financed offers. You present a better offer especially FSBO, REOs and generally those ready to sell since there are no financing costs and contigencies. That can work in your favor especially if you want to go into a property with built in equity. (I always have).. regardless of whether I buy a property to rent or flip, it needs to meet 2 goals: be rentable if it does not flip in my timeframe.Best wishes!

 Thanks for the thoughts here, Christine. Could you elaborate on the "can work in your favor especially if you want to go into a property with built in equity."? Specifically, how the built-in equity is working in that case given that no rehab or upgrading has occurred?

Originally posted by @Brent Coombs:

It's a truism that people generally take less care with "free" money than they do hith hard-earned!

Looks like you're desperate not to fall into that trap! Yep. Hang onto that thought for dear life!

The two lessons that your post indicates you've already learned are:-

1. "The downside (of turnkey) is that we don't create any equity out the gate". Big tick!

2. "The type of property (solid C class) isn't one that would appreciate very well". Tick!

You've come to the correct Forum to ask these questions. Tick! Please keep us apprised. Cheers...

 thanks for the encouragement, brent. will keep everyone posted as we progress

Hi everyone.

I'm about to come into a chunk of money that is unexpected backpay for the last couple years due to a lapse in the payroll company my employer uses. As it's unexpected it's free to be used for an investment opportunity w/o pricking our current bank accounts.

We got into our first property earlier this year. It was a doozy and a near death experience financially at a couple points. We learned a ton and are wanting to get back in the game now that we have renters and have let our wounds heal up a bit from it all.

My question concerns the best means of moving forward. I love the idea of OPM and strategic sweat equity creating value ex nihilo, but there are of course the risks inherent in your calculations and assumptions being correct for that to work out w/o having to shovel money into it to keep it afloat (like we had to do earlier this year).

As such, I'm tempted to just take the cash and use it for a 25% downpayment on some duplexes that have tenants already in place. Snatch up that cashflow without any repair costs, estimations, dealing with hard money lenders, etc. The downside is that we don't create any equity out the gate.

Further, the type of property (solid C class) isn't one that would appreciate very well. At least not in the foreseeable future.

In either case we likely won't be able to invest for another 8-12 months or more while we slowly build our nest egg back up after it got demolished on property #1 this year. 

Our long term goal is to create wealth, not have huge cashflows anytime soon. But having an easy win will be a good feeling, too, and may be helpful on the psychological side of things more than anything else.

Would love to hear the thoughts of those who have a few under their belt and have had to wrestle with the variation of opportunity types.

Thanks for any thoughts!

thanks, jacob. any ideas or tips concerning manner of repayment? or is it a mileage-may-vary sort of situation in which it is only dependent upon the terms that the investor wants?

hi, everyone.

i've done one property thus far. we used hard money to get into a deal and employed the BRRR strategy.

for the next property i'm unsure we'll have enough capital on hand to do a repeat—much of it is tied up in the previous deal that had lots of learning we ended up paying for. as such, i'm attempting to get creative with financing instead of simply waiting on the sidelines.

i'd love to hear from people who have raised small funds from friends, family, or even strangers. what sort of terms did you use? i've seen several homes that could be great to grab up while some investors are offloading them. already rented out, in up-and-coming areas, the works. is it foolish to forego much initial cashflow in order to give investors a quicker turnaround on their repayment?

this approach is all new to me so i'm tossing out a lifeline here. will continue to search for reading material in the meantime so i can bring more information to bear on the discussion as it grows.

thanks for any thoughts, tips, et. al.

best-

hi, @Greg Anderson, and welcome to the indy market.

i've used BAM (barrattassetmanagement.com) and had a great relationship thus far. highly recommended.