All Forum Posts by: Ken D.

@Michael Swan Thats why I'm selling! Still reading the book you recommended and still looking for property in Pittsburgh. I'll let you know how it goes once I close my first few deals...

@Jon Wahlmann I also looked into selling vs refi. For me since I don't live in the property anymore and I can get much higher return out of state it made sense to sell. I think it comes down to the numbers. If you live in SD still and your mortgage is much lower than what you could rent for, and the investment properties you purchase with the cashout refi cashflow positively, sounds like it would be a good option to me. You'd be cashflowing positively with the deployed cash even if your home value drops and at this point the paper value becomes real value.

@Jorge Ruiz Both good comments. I've spun my wheels with a couple agents already in more than one market. Fortunately the lender I've been working with has pretty good turn around, but I'll probably start doing some cash buys with delayed financing.

@Ian Hoover @Alexander Felice I did ask for what other people do. Although it makes me uneasy now, I like what I hear. With experience I'm sure I'll be able to pick up speed and assess/mitigate risk faster. Thanks for your feedback!

Alexander Felice I wish I had the guts to do that. What market are you in and what type of properties are you looking at. I’m looking in Pittsburgh where there are lots of old houses. If I did that on the property I’m currently in escrow for I would’ve purchased a house with major structural problems that would’ve decimated my numbers. Now after having a structural engineer inspected it the seller may agree to fix it and things will be all good. Or things don’t work out, I’m about $1K in the hole from inspections, but dodge a big bullet.

I'm looking to see how people on BP go about looking for property and conducting their due diligence before and after making an offer. I've purchased and read @David Greene's Long Distance Real Estate Investing (great book that helped me pull the trigger and set up my trial system) and listened to many podcast's but there are always more to learn when going through the actual process.

My current process is:

1) Analyze deals on paper and narrow down to a few to focus on. Do what ever online research I can do on the property to help with the assessment.

2) Have my agent take pictures/video of the property

3) Have a contractor take a look to estimate rehab (I pay for his time so he is willing to continue helping me)

4) Tweak numbers and obtain funds or preapproval

5) Make an offer

6) Inspections and secure funding

7) Property manager inspection

8) Close

So far this seems to work but I'm finding the process can become expensive and time consuming  if there are enough properties that don't close, especially when looking at properties that need work. Is this just the price you pay for long distance investing or are there more efficient ways to work through purchasing a property? Interested to hear what you guys do!

Hi, I'm looking at purchasing small non-commercial and mid-size commercial multi-family properties in Pittsburgh, PA. Can anyone provide recommendations for an agent? There is actually a property currently on the market that I'm interested in placing a bid. Any help is appreciated.

Looks like I missed a whole second page when responding with my last post.

@Scott Trench I love the detailed response. Your cap rate comparison is a great analytical tool for first pass comparisons. I think it also helps explain why I had initial hesitation on whether I should sell or refi. If I were to stay in the same area based on your cap rate comparison refi may make sense, if I go out of state in a less expensive market it I should sell hands down. I do believe that the SD market will continue to appreciate and rents are currently still climbing, but with my goal of cash flow, I'll need to sell and find the markets with the higher cap rates. Thanks for the feedback!

@Dawn Brenengen Interesting thought. I may explore that option just for kicks. (still planning on investing OOS)

@Dan H. It's always difficult to follow your own advice isn't it? In this case I'll take yours. :)

@Ola Dantis That was my initial thought. But even with the potential of appreciation, right now I want to focus on developing good investment fundamentals. In the future when I've reached my cash flow goals, I'll start looking into potential appreciation more. Gambling is more fun when you have money to loose don't you agree?

@Ryan E. Most of the feedback I've gotten has taken into account the appreciation. But as you mentioned because the "profits" are on paper. This means it's sitting idle doing nothing for me and can potentially be lost. With the numbers you assume: NOI $6K/month for a $800K property gives you a cap rate of 9%. Pretty sure that's not too difficult to hit in some markets outside of CA.

@Jeshua Patrick Not trying to convince myself of anything. The property is appreciating and rent is increasing, but I don't know for how long. Mainly I was trying to get a full picture from those with experience to make sure I was on the right track. But I agree, holding on to the property would be gambling and as you've pointed out in your calcs, probably not a good gamble.

@Shiloh Lundahl agreed.

@Jay Hinrichs you make notes sound very enticing! I've purchased some through lending club but returns weren't so great. I'll have to do some more research on that and listen to your podcast before I ask any questions to make the most of your time. Any pointers for reading material is appreciated.

@Dan H. Some great points. I don't mind a little work if it pays off.

Wow, It's pretty cool to get this type of feedback from people who know what they're doing. I have to be honest I didn't expect this much traffic on this thread.

@Tyler Kastelberg @Jeshua Patrick

Thanks for spelling it out. Makes perfect sense. And no special attachment. What you're pointing out aligns with my initial assessment and calculations. I just have others around me that telling me that I will never be able to buy a house again in CA (haha, I know). But take a look at other posts in BP about whether to buy "poor" investments due to expected appreciation. I was hoping to have my cake and eat it too by refinancing. Although it may seem obvious to many it's easy for an inexperienced investor to get persuaded other sources of info or otherwise by potentially bad advice.

@Rich Weese I appreciate you pointing out that there is a time and place for different strategies. This is why I'm here on BP! My goal is to expand and as you and others have stated in previous post I think the best thing for me to sell and maximize my cash flow in a different market.

@Michael Swan Your podcast was the reason I started looking into selling and looking out of state! Since we began in the same SD market your path and strategy was an easy one for me to relate to. I haven't purchased David Lindal's Multifamily Millions, but have read about half of another one of his book Emerging Real Estate Markets. I've also been researching other markets and even flown out to one to check it out! I should also take your comment in your show more seriously "I never take advice from people who don't have more than me." I appreciate the feedback. It'll help me focus my search on what type of property I'm trying to purchase.

 Thanks for the correction. 1/20 makes 0.5% sound right but it's not... looks like either criteria is a good enough point to sell. If 20x rule is not a thing it'll be my first pass personal criteria!

@Jay Helms Finding another market is precisely what I am looking to do. Looks like the 20x rule might be a thing!