All Forum Posts by: Brant Richardson

You live in a great market for cash flow. I would buy SFH's in cash. It would take a long time and a lot of work on the front end to acquire a million dollars worth of good deals. I would have a professional property manager running them. The long acquisition phase would give you time to make sure you had a good PM. After I spent through the million, if I was enjoying finding and fixing properties, I would get a portfolio loan against some of my properties and start buying in cash again. You would have to leverage to get into the 10-15k per month range.

Also, the bank will not count your rental income for the first 2 years of being a landlord.  They want you to prove you are an affective landlord. 

Your debt to income ratio is the potential problem.  If you have rental properties which are cash flow positive on paper, even after depreciation and all you other deductions, then it should not be a problem.  You need to be aware of other debts like school loans and credit cards.  New debt like a car loan could take you out of the market.  A lot of people on BP recommend buying a duplex as your first property so you have a personal residence and a rental with your first deal, it's a great idea if you can find the right property.

I just got my first letter, targeting me as an absentee owner in Kansas City.  It was very similar, greeting card size envelope, yellow lined paper, a font that looked hand written, my actual address.  The letter started off "I am still interested in buying your house at xxxx...".    One of the podcast speakers joked about calling back and asking to be put on their buyers list, I plan to actually do that.   Also I want to let the guy know to take me off his sellers list so he doesn't waste the money on mailing to me.

Mark,

   You don not appear to be very confident in knowledge of your area when you say

"The neighborhoods seem ok and clean".  Have you been living there for a while?  you need to know if the neighborhood is good or not.  In small towns there can absolutely be 30k deals that come up and really are "that easy".  You are probably talking about a home which is 100 years old and will need maintenance even after a rehab.  If there are tenants available these can be great buy and hold properties.  You need to know your market... know whether there is a tenant base and whether it is a decent neighborhood.  Most likely those 170k properties in the area will be cash flow negative, stay away from them.

The initial vacancy/filling would be a good place to start doing it on your own.  Just put an add on craigslist.  Spend a good amount of time taking a bunch of nice pictures and writing a lengthy description so people know what they are getting into before they call.  That will weed out a lot of unnecessary calls.  Then save all your work in a file and next time you need to rent it you can advertise in minutes.  Nobody else will have as much to gain by finding  a high quality tenant as you do.  The realtor will get paid whether they find a good or a bad quality tenant.  If using a realtor to find a rental is standard practice in Connecticut then it makes sense, I'm just not used to that approach, but you still want to be very active in choosing the tenant.  Don't feel like they need to choose you, the ball is in your court, you choose them.

Inspirational for sure.  Sounds like you guys are doing it right, instead of just jumping into a deal that the numbers don't support.  Good stuff.

  Hey thanks for the update.  The timing on this post is funny because two days ago I received my first letter from a guy targeting absentee owners in Raytown.  I thought you were direct mailing to find deals to add to your buy and hold portfolio.  If you are wholesaling I really do want to be on your buyers list.

  Sorry about the poor response rate on batch 2.  Good luck on number 3 & 4.

If you are buying where you live I recommend running it yourself. If you are buying in a decent neighborhood it is not that difficult. It is a great learning experience. You will make a lot more money. If your portfolio grows to a point that it is no longer manageable and you need to get professional property management then you will have the experience to know when a PM is full of BS. It will give you time to learn more about the PM's in town. Also, the bigger your portfolio is, the more seriously PM's will take you. As previously stated, your local REIA is a great place to talk to people about the various PM's. Although a good one might be difficult to find, once you have one you are set, while you have to keep searching for new deals.

I have been investing in Kansas City.  I am very happy so far.  My property manager is also a realtor and runs the rehab projects.  The appreciation will not compare to Texas but the cash flow is better.  It is real scary buying the first one, be prepared for friends and family to call you crazy.