All Forum Posts by: Joseph Walsh

Possibly, the flip side of that is that they have little to no money in their deals, and "should" have more liquidity to weather a storm like this. vs the investor that paid cash for a few properties, and used up all their available cash, now they MUST leverage the property to get by. Plus, if the BRRRR was done right, they should have 25% equity out the door, and within a few years, enough more where they could actually tap those funds if they absolutely had to. Even in times like this, it all comes down to the old saying, "you make your money when you buy the property" if you over paid in either scenario, your in trouble. Personally, if I was a traditional investor right now, I WOULD leverage those properties and brrrr a bunch due to low rates, but that's me. Actually, I'd probably leverage them and dump it into the S&P500 and play the rebound....but that's just me.

I think the bigger issue is EXACTLY what has happened.  A bunch of people thinking they don't have to pay because they can't be evicted.  So, for no other reason than "I don't have to", they aren't paying rent. Even if they don't have a hardship from covid-19.  It's exactly what we feared would happen.  My guess, there will be a slew of evictions on the back end of the temporary stay.

I call B.S. on them.  Nobody has actually missed a check yet, the shutdown orders literally started less than a week ago (in most places), unless they are paid DAILY, even weekly paychecks haven't been missed yet.  But let's assume they have missed a single two-week paycheck.  Why exactly can't they pay rent THIS month.  Assuming they had the verified rent to income ratio, they surely should have TWO weeks worth of reserves. There are plenty of things they can choose not to pay this month, rent should be priority #1.  I know this sounds harsh, but it's a load of bull.  I'd ask them this:  So, let's say the furnace went out, you'd be ok without heat for say, 5 months while I collected enough rent to pay for a new one, right.  I don't have the reserves.  No, ok, but you WOULD be willing to pay an extra $500 a month for a few months to cover it?  No, huh.  So, why then why exactly are you asking me to pay an extra $1000 a month to cover your lack of planning?  Pointing out rent is YOUR paycheck, and you need about 6 of them to make what they made in a month(best case, 2% property).  Now, if they are legit, good tenants, and have a plan to pay it back, etc.  Sure, try working something out, but man sure sounds like all the "takers" I've encountered in my life.

Not if I were the seller, he backed out.  He's an unreliable buyer, I'd never sell to him again.  Not, he might me "same" as in equivalent.

That said, it's clearly having an impact, and will continue to do so.  I am trying to leverage the historically low rates to put my self in a position to capitalize when things calm down a bit.

I think this phrase is costing you a lot of potentials:

"Applicants must receive positive references from all previous landlords for the previous 5 years."

Me:..."Eff that, I am not going to track down 5 years of landlords and get references....", especially if I am 1-2 years out of college, where I moved every year!

Sounds like originally all electric heat.  A bit expensive, probably why they put in a furnace of some kind, I am assuming it's gas.  If it's gas, you could remove it and replace with a gas fireplace, assuming the supplemental heat is required, Just a thought.  "ohh, this unit has a gas fireplace..."

Thanks.  Good to know. I may of misquoted him, for whatever reason he was waiting on something, and I missed my chance to take a swing at the property before it was re-listed with an agent.  But yes, the time game in this case, he may still want to dump the house sooner than later!

Hi all, 

I thought I would list a few missed opportunities I have had recently, and ask about any of yours.  Mine fall into 3 general categories:

1.) Wish I would of thought to...

Recently, we went to an estate sale nearby, noticing the for sale sign was taken down. I assumed, and asked "so, you sold this already", knowing the owner had died and the son was running the sale. The response "No, had to take it down, the house wasn't in a trust, can't sell yet. as soon as it clears probate, we'll relist" about a day later, I thought: "I should of let him know to contact me before relisting. it would be a great flip canidate, or even BRRRR, maybe I could get it at a discount if he is eager to sell, considering all the tie ups so far..." It's now listed again...damn

Another one, been driving by a "for sale by owner", wanted to contact them to see if they would consider a seller finance.   part of my delay is based on category 3, now I say this weeking a ton of cars there, for what I assume are showing...damn it.

2.) I have already over allocated my time:

Currently doing home renovations at home, by myself, rather than hire it out. These reno's are taking several months, due to my overall time being over allocated to various things, plus the renos. So, I have really not been making time to find my next property(ies). As a bonus , during that time, my heloc is tied up (see category 3), which is part of the funding strategy for my next purchase. I have not had time to look at a few properties I think would of been good BRRRR candidates, and one sure fire flip. They have been snatched up since.

3.) My money is currently tied up in other things:

See the above mentioned HELOC tieup. Also, I was planning to move some old 401k's over to my current employer so I have access to the money in form of loans in a great deal came up and/or the HELCO was tied up. Never got around to it....

I have a dud rental that about breaks even every month due to a crappy loan and not quite enough equity to refinance without some cash out of pocket, not much mind out, but some.  If I had not tied up all my funds in other crap, I could turn this to a positive couple hundred a month cash flow, it's not much, but it's a miss, and they add up.

So, the lessons (which I KNOW), manage your time, manage your liquid cash, and always, always let people know you buy houses....  I figure in the last year I have missed out on what would now be about $800-1000 a month cash flow due to a lack of focus, and maybe a 30-40k flip payday.

The other part of @Brandon Turner's BRRRR strategy in it's original simple form, is every 5 years or so, you sell off the houses you bought 5 years back and renovated and buy new ones to replace. Assuming you follow the purchase price guidelines, you will have equity, and maybe equity growth. I guess you could add that to your cash flow numbers (retroactively) if you wanted. So, if you say have 50k in equity after 5 years and sold, you could (for the purposes of apples to apples comparison) add ~$700 a month "cash flow" equivalent after fee's etc. The idea is, if you renovate, then sell in 5 years, you should, in theory, have no major expenditures pop up. This in addition to the $200 over 10 homes is more than $800 on two.

To be fair to the OP,  @Shiloh Lundahl:

I think a big point being made is, if you don't have the ability to save, i.e. FIND money to save when needed, and to plan to save because you KNOW you will need it eventually, you probably shouldn't be investing in anything, let alone RE.  I see so many people complain they can't "afford" X (healthcare, better housing, to put money in their 401k, etc.)  Then I ask something along the lines of (So, new Iphone huh?, unlimited data?, New Tattoo?, Designer glasses?  New shoes, ..to match the new outfit...?, Just got the car detailed, again huh...)  Sadly, they never actually hear what I am saying.  I would even minimize it to, if you are unable to save $300 in the next month, RE is not for you. You MUST be a person that is able to find savings and ways to increase personal cash flow to be successful.