All Forum Posts by: K. Mitchell

I found out some more info. Apparently the seller acquired the properties about six years ago. They were 95% occupied. She basically didn't do any management. When they went vacant, she left them vacant (that explains why I didn't ever hear of her or her PM). The occupancy dwindled to where it is now -- 70% occupancy.

So there are good properties here. The seller will sell them at a discount as she wants out. She will not carry a note and, unfortunately, I probably can't get any of them financed (I just purchased and am rehabbing five other properties now, and the rehabs are rather extensive...). Even if I tried to convince one of the local banks to lend based on the actual value, they probably wouldn't go for it given my other new project. And I don't know any other investors in the local area who would want in on it right now.

Any other ideas on how I can profit from this? It seems like such a waste!

I am going to try to pick up a few of her better properties. Maybe 2 or 3 if the bank will go for it.

Any other ideas on how I might approach this or be able to benefit from it?

Ryan, you are right on the money. The lady inherited money from her father, and started purchasing real estate.

I found this interesting, and thought I would share.

I invest out of state in a mid-sized college town. There is a distressed seller in the market I invest in. She has just shy of 200 rental properties in my market (and another 200 in another market) and she is wanting to sell all of them.... I was able to get her detailed rent roll for the houses in my market.

Here are some info from her rent roll:

* In a town that has a 3% to 5% vacancy rate, she has a 33% vacancy rate.

* For comparable properties (some of which are literally across the street from mine), she is renting them for about $100 to $200 per month less than market.

* With just over $10 million in property values, she is pocketing about $11K per month cash flow. That is about $60 per month per property, in a town where properties usually cash flow about $200 to $400 per property.

She uses a PM in the other rental market to manage the properties in this market. Having worked in this market for 10 years and knowing just about everyone, I have never even seen a listing for the PM or heard his name mentioned.

Apparently the seller and PM just can't keep up with the properties. In talking with the agent, she make it clear that the seller doesn't even really know what properties she has.

I can't help wondering if this is what it is like owning a few hundred rental properties? If so, I wonder if this means the smaller investor has this much of an advantage over the larger investor?

I say buy all three properties. Pocket the cash flow from the rust belt for security and hope for appreciation from the sun belt as your riskier position. I view it as diversifying a portfolio....

I don't know if you can hold the property for a while (or if this makes sense for the particular property), but the game in my area is to show a better use for the property and then sell it at a steep premium. This usually entails hiring an engineer/architect to do studies and reviewing/getting zoning figured out. Then, before making any changes to the property, selling it as something else--such as land for a commercial structure, apartment, gas station, etc.--whatever is "the highest and best use for the property."

As for insurance and taxes being paid timely, your lawyer will include a clause for this in the contract and/or deed of trust. This is open to negotiation, so you can impose a number of requirements--such as when proof has to be provided, how much insurance, etc.

Its slightly off topic, but the most passive investment I have seen is leased cell phone towers. I had a client who installed them for a living. He ended up investing in a few of them on the side. He negotiated long term leases for them (like 20+ years), and that was it. The rent is a set amount, he has no expenses, and he doesn't even have to maintain anything.

I have heard billboards might be the same, as there is a company that will do all of the work for you once you get a billboard set up. I don't know much about those though.

I am new here, but have been lurking on BP for a while. Its a great site, and very informative.

I have been investing in SFRs in a smallish town in Texas for 11 years now. Buy and hold strategy. I am up to 11 units now. All cash flow--usually. My goal is to get to 20 units in the next ten years.

I have been going about this the slow way, i.e., putting 20 percent or more down and investing almost all of the cash flow back into acquiring and paying off the properties. The process is just starting to pick up as the debt is paid off and I get more property, as the cash flow is enough to buy more properties sooner now--but it is still slow.

Given how slow it has been, I guess I am looking for a pick-me-up. I was wondering if others with a buy and hold strategy who are closer to their property goal can share their experience/results in taking things slow, paying off debt, and how the income really starts to grow over time? I know this will happen for me faster and faster as more time goes by (absent a major catastrophe, etc.), but it would be nice to hear about the payoff now from others who are there now.

Thanks in advance.