All Forum Posts by: Justin Carmack

Lack of confidence cost me more opportunities than lack of capital. I was brought up with limiting beliefs that RE investing was for rich people, not people from blue collar families.

Back in the 90s I should have found another investor that knew what they were doing and listened to every word.  Once I received sound advice I should have trusted my training and went out and aggressively went after my dream.

I don't want to tell you to carry a bunch of debt if you're not comfortable carrying the debt. Everybody will have a different comfort level. Personally I leverage my properties and carry debt on the property up to 80% of the value.  Make sure the income from the property can pay the mortgage, insurance, etc.  You can split that $800k into as many properties as needed.  With a 1031 you're working with a short window which will require you to identify properties within 90 days (if I remember correctly) and close within 180 days or so.  Just know that anything from the $800k that doesn't go toward the purchase of the new properties is typically taxable income.  Consult with the company handling the 1031, accountant, attorney, etc to make sure you meet all of the requirements. 

That's great news! If I was sitting on $800k I would BRRRR multi-family properties. Once you rehab and stabilize/increase rent you can pull the money back out in the refi process and do it again.

I might also look at buying old industrial buildings and turning them into apartments and shared office space.  I'm in the Midwest so there are a lot of old industrial sites that could be converted.

I can't give you an answer with 100% accuracy.  I honestly don't know.  If I had to guess they use some kind of an algorithm or automated system for determining just value.  Perhaps the algorithm doesn't discard sales from family members to family members, foreclosures, etc. and is artificially pushing the just value down.  I run into that occasionally with some of our local databases and websites.  On the other hand, perhaps the system is working correctly and the list prices are higher or lower based on factors the website can't take into account such as new developments, tax increase, and somewhat speculative things that may make a property list higher or lower than just price.  There are a lot of things the computers can't take into account which makes some of this less of a science and more of an art.  

Hi Keegan! Are you in the preliminary stages of real estate investing?  

If you're trying to figure out the strategy for a specific area there are a lot of questions that you need to ask... How familiar area you with the area you want to invest in? Is it an up and coming area, or an area that is being revitalized?  Is the job market good?  Is the population growing?  What's the rental market like?  Resale market good?  How expensive is it to purchase a house that needs rehab?  Are there qualified contractors nearby or would you be doing the rehab?

Personally I'm a BRRRR guy. It's a strategy that I know and feel comfortable with. It can have a lot equity built into the deal and can be more forgiving for miscalculating numbers. I feel comfortable self-managing properties. Simply put, it just works for me. I would be like a fish out of water working in many other strategies such as dividing land, infill, and new construction.

I think it's going to be hard to over saturate most of the major cities with any one type of investing/rehabbing.

Hi Clara.  Welcome to BP!  I assume you're searching for properties in FL.  Where are you searching for the just values or finding the just values that seem to be really far off of the actual market value?

I see the purchase price, but how much do currently owe on the property? I think the person you spoke with is referring to leveraging the equity in the property. In other words if you have enough equity in the property you could either refinance or get a line of credit on the property. Then use the money you pulled out to purchase additional properties. If you spread the equity in the property among multiple properties you would then have multiple tenants paying down each mortgage. Obviously this strategy works (I do it), but there is a risk that you can over leverage and put yourself in a compromising position. Should property values or rental rates drop for the area you may find it difficult to fill the properties without accepting less than you pay monthly on mortgage, taxes, insurance, etc. Personally I won't own a property if I don't clear more than $150 per door (per month) after all expenses including holding money for CapEx and Repairs.

Indianapolis is a great cashflow city, but I personally stay away from IPS school district.  I recommend investing in the first ring of cities around Indianapolis (look outside of I-465).  These are basically the suburban areas that have already experienced massive growth over the last two decades. This would include Brownsburg, Avon, Plainfield, Greenwood, Fishers, Noblesville, Westfield, Carmel, Zionsville, and most recently Whitestown.  These areas are all 4-5 star school districts.  They aren't cheap though and houses can be difficult to find (because they are nice areas).  If you want something more affordable, but up and coming I would recommend Mooresville, Lebanon, New Palestine,  McCordsville, Fortville, Bargersville, Franklin. All have good school systems. Drive through the "second ring" towns and they look like the "first ring" cities 25 years ago.  

@Kyle Weinapple

If I could go back in time I would house hack a 2-4 unit property every year or as quickly as I could legally do it. Live in them for free and generate higher levels of income when you move out to the next property.

@Robert Dunbar In my opinion if it's going to be a rental, go wall-to-wall with LVP throughout the house. Tenants can use area rugs in certain rooms where the want to change the ambience. We're using it in all B thru D class rental units.

If I'm flipping a house we upgrade to an engineered hardwood flooring throughout and tile in bathrooms.