All Forum Posts by: Jonathan R.

@Jimmy Dang Did you see Fred VanFleet light up the Golden State Warriors last night in the 4th quarter? Wichita is on fire. Downtown has multi million dollar projects underway all year long. We are starting to grow slightly (I think).

On the rough end the Boeing 737s going down has been a big problem, Spirit has been cutting back. Others are stepping up, but we need to get that plane up in the air again. 

Decent development is going on. Call me biased but I’m seeing more violent crime as reported on the news taking place in South Wichita than I am NE, though it seems fairly minimal to me and almost never random. 

Things are going well from my viewpoint, we’re on the up and up. @Jared Viernes do you still have your pulse on the ICT?

 Duplexes and single family homes are a different animal in a low income area in the Midwest. I own both. Unlike Seattle, we are spoiled on single family homes. The duplex will have higher turnover and be more of a pain in your butt. I would stick to single family homes in an area like this as they are the Mecca of what people want to rent. I also like your idea of placing renters that have already been living in the area, I do the same. Best of luck.

@Kelsi Dockins love it. I give you less than one year to do it again, and then again and again. This one deal won’t change the trajectory of your life but 10 will. I’d try to buy on the same block or very very close to this first one, use the same contractor. If it’s working, keep it working. I like that you are using all cash, it’s the best way to get started in low income housing. You’re going to run into issues along the way, stay focused, keep pushing. Be bigger than your problems.

I personally would not. The city will be all over you on this one I’m sure. 

Setting an electric meter is free, at least in my area. The power company sets the meter and they don’t charge for doing that. Though, the property needs to be wired to the meter, what an electrician would charge for that depends on how much work they have to do. I‘ve found my experiences in my area similar with gas and water too. Meter setting is free, the work to the meter is not and varies.

@Bryce Brown yes. You can follow the normal eviction process earlier than 30 days. 

I just like 30 myself because I want to keep getting paid. I think you see how it plays out. You have three years until the process gets more expensive, I figure you might try to get what you can in a normal rental type situation (as that is all this is until the “buyer” has equitable interest), if she falls behind you move to evict, if she gets in line you have your end buyer.

Even after three years you can still file for eviction and if she doesn’t show to court you win. If she does show to court the judge will tell you this needs to be a foreclosure at which point you pivot, hire an attorney and go that route.

*this is not legal advice, I am not a lawyer

@Bryce Brown You don’t need a lawyer at this point. I’d say keep her in there till she hits 30 days late and then do a normal eviction. Keep it going until then and stay on her on the down payment. In Kansas you have like a three year window before it turns into an equitable foreclosure. 

 Stereotyping likely plays a roll. Sellers don’t know the value of what they are sitting on; they bought it 10 years ago for X amount and they think it’s still worth that amount because the county appraiser undervalues it even though a seller can put it in a local auction and bring a much higher figure. County appraisers don’t do a justice compared to rental rates. Investors write off entire sections of cities. Banks still redline for investors. Investors fail to look for and secure affordable contractors. City inspectors write violations on anything they can think of again and again and again until they can start writing on problems inside the properties where permits then need to be pulled. Investors with cheap contractors don’t want to use licensed contractors to pull permits and make remodels significantly higher than the county’s undervalued assessments. Investors let the city take the property in tax foreclosure and the windows get boarded up. Teens spray-paint graffiti on the sides of the property because they think it’s cool. City knocks down the property. Sometimes utilities buy properties instead of forcing eminent domain on low income people (to avoid backlash) to install higher voltage utility poles for the local university or hospital and then demolish the houses. Habitat for humanity slowly builds again on some of the vacant lots. Some sellers just sit on the property and hope a non profit knocks on their door one day. Vicious cycle. Yet rental rates remain strong. The investors that can buy the whole block or sections of the city, repaint over the graffiti, do well with the cashflow and will eventually win the war. Thoughts?

I’m not sure why anyone is surprised that this strategy has come under attack (I doubt anyone really is). In almost every string on investing in low income areas or buying sub 30k properties, investors are met with skepticism and uproar. I am glad BP put this story on the podcast, they are few and far between. I’d like to see more of it. I think the stories that come out of these discussions are some of the most interesting stories in the business. Sure real estate is mostly boring, and that can be a good thing, it makes for a good investment, but, some of us are less risk averse and thrive in riskier asset classes. You’d have to check my pulse if my strategy was to buy B class assets with 20% down again and again and again. I’d rather improve the economy from the inside out, at least for now. Beware of shiny object syndrome, if what you are doing is working, keep grinding. There are many ways to make money in real estate in concentrated efforts.

 You might consider turning this one back into senior housing sometime soon. Big future demand as the baby boomers are aging. Robert Kiyosaki sees senior housing as the next big boom. Tons of videos out there from Gene Guarino.