All Forum Posts by: Justin Joseph

@Shawn Mcenteer yes I did. I think that is always recommended and it is something I do.

My inspector has uncovered things they werent aware of and has also alerted me to issues to monitor to make sure they are rehabbed properly (for instance ensuring that the electrical scope included adding additional circuits because the current number was deficient).

Hi Dave,

I ended up making the dive and working with VE. I am currently purchasing my third property from them, which regardless of what I write next should speak to how things have gone.

No relationship is without its hiccups, and we have certainly had a couple along the way which have mostly been related to financing/appraisals/purchase prices, but as far as the product received I haven't yet found anything in Indy that is of equivalent quality. I will have to give an updated opinion again in a year or so (I have been with them for 8 months), but as of now I am still very satisfied. Of the turn-key providers I have come across and attempted to work with they appear to provide the highest quality product and are easy to work with, and are generally competitively priced.

PM me if you have any additional or more detailed questions. Would be happy to speak with you.

Justin

@Aaron Montague and @Bob Hines I appreciate your input. Texas is starting to sound like a better option. If for some reason I have trouble selling it refinancing whatever balance I have and increasing my CF would be an option in the interim. And you are correct that putting extra money into the Indiana property I wouldnt see that money back for several more years...

@Adam Gerig taxes in Indianapolis vary substantially. I have some properties that are 300-400 per half and I have another where property taxes just jumped and are almost 800 per half. I still make a very healthy return on that particular property but it was a major bummer to give up an extra $70/mo. 200-300 per year sounds unreal, but Ill take you at your word and add that that does sound great!

@Matt Devincenzo both loans are in the same time period in their lives (4 months apart). The Texas property interest rate is 1% higher than the Indiana property. Guess I just need to do a tighter analysis of the numbers and see which provides better benefit and less risk. I did like another users suggestion earlier of considering which property presents a greater risk in terms of potential for suit as a potential consideration as well.

@Adam Gerig that's an impressive management portfolio! Indianapolis is similar in terms of purchase prices, would be interesting to compare the two cities more closely!

Adam,

I like where your head is at! I am in Indianapolis right now. Fort Wayne isn't too far of a jog! haha

That said, that 20-25k is right around the time I plan to take my RE Pursuits out from the side and make my full-time job a part time job, so the wheel barrow full of cash could be wonderfully useful.

Guess I just gotta keep pondering and running numbers (I'm an Engineer, so to me, the answer always seems to be in the numbers haha).

Adam,

The battle I'm sort of fighting is whether making my payday when I sell the Texas property bigger to roll into a bigger/more property when I do that sale, or to expedite having the Indiana property free and clear better serves me long term.

I am all out of conventional mortgages, and havent looked for portfolio loans for mortgages past the first four.

The Texas property has about 80k left on it's mortgage and the Indiana property 49k. I am really struggling with whether the extra ~$300/mo and no more mortgage in 5-7 years or an extra 20-25k at once in 3-5 years is the better play.

Hi Everyone,

I think I have my answer for myself, but I wanted to see if I could get any opinions and justifications from the Community.

I have two financed properties I own (amongst a few others) which I am considering doing some additional principal payment on in order to build up equity.

One property I am hoping to sell in the 3-5 year timeframe. It is in Texas in an area expected to see heavy growth and at least moderate appreciation. Before anybody jumps on me for investing for appreciation, the property Cashflows just fine (currently ~$180/mo)! haha

The other property is a long term hold in Indiana which I have no intent to sell in the short term. It Cashflows wonderfully (~$200/mo on just over half the investment of the Texas property) and I havent had any problems with it to date.

So my question is, if you were going to do some additional principal payments (forget whether or not that makes sense and just assume it does and you are going to do it) which would you make additional payments on? The Texas property would build equity for the time of the sale, the Indiana property would go towards owning the property free and clear.

All opinions and questions appreciated!

Thanks!

Justin

@Arthur Garcia not offended at all, apologies if it came off that way.

I appreciate your input, I have heard the same arguments from others before and it is very valid and probably a good way to go. It's just not the way I have chosen. I see the value to both sides very clearly. I am purchasing properties using financing while interest rates still make it easy to do. I am also considering cash purchases, which is where the real advantage in other markets comes in. For 120k I could get two properties which rent for 750-850 in probably comparable neighborhoods than I could find in a CA market that pulls 1050-1150 for that one 120k property. The appreciation potential is certainly not there, but that's something I personally am willing to sacrifice to a degree.

Justin

Arthur Garcia the points you make are all valid, but are exactly why I made the choice I did. The biggest of the things that you said was that deals have gotten much tougher, but they are still around. For a guy like myself who is still working on embracing working my butt off, and who is often already working my butt off at my full-time or more salaried work, I dont need the added workload, pressure or stress of being in a market where good deals are hard to find and harder to close.

So I chose to go to an area where good deals are common, and GREAT deals are hard to find, but available. So right now I am comfortable with good deals, and when I find the time I am looking for great deals there.

And you're right it's certainly more convenient to be in California. So to moderate that extra inconvenience your only choice is to build a better team, not saying I have that, but it's my goal.

In the end it's always to each their own, but I chose to pick where I think there is great value instead of trying to find great value in where I am. Hopefully that strategy continues to suit me well and hopefully your strategy of staying close to home continues to suit you well also!

Justin

While I'm certainly no expert yet I'm going to have to disagree a bit with Darren. I made the plunge this year and started investing in Indianapolis, almost 2000 miles away from San Diego. And while I do agree that investing in your backyard gives you better access and does allow you to properly monitor your properties, I still dont think if you live in a difficult market you should feel obligated to stay there.

For a guy like myself I dont want to manage my own properties, and while I need to know theyre well cared for, I dont think that as new as I am I have the skill to do the job as well as a PM (not that all or even most PMs do the job well) and nor do I have the time or the patience at this point to do that job. The money you spend on a PM (again assuming theyre worth there salt) to a lot of investors is money well spent. And while I'm a small show now I dont intend to stay that way and managing 5-8 properties with a full time job just isnt feasible, even if it's in your backyard.

I am learning the business, and have already and Im sure will continue to be burned a bit by being so far away, but if you find some people you trust wherever you end up, being in one of the best markets instead of just your own market has some great advantages.