All Forum Posts by: Ken Hobbick

@Drew Walters   Have you found the Bigger Pockets Money Podcast episode 257 this week Jabbar Adesada and episode 255 with Dan Sheeks?    There is a community for people just like you with ambition to learn real estate and financial education.... I wish I could go back and tell my younger self to pay attention to this it has exponential returns. 

@Dave Michael  What I love about real estate are the many options you have.  I would agree with all, @Jeremy Gaal, @Ben Rhodin and @AJ Singh as solid advice.  Ultimately it would be what your end goal of getting into multi-family in the quickest way possible.  I agree Colorado Springs market will experience appreciation for the foreseeable future based on supply-demand and rate of building which can't keep up.   Both cash out refi and 1031 exchange are viable options,  I would add another option would be to 1031 one property and cash out refi the other.. you may not be able to get enough equity out this way but give it a little more time.   

As AJ mentioned they are very different management asset classes.  I would focus on finding and doing due diligence on multi-family property knowing you have both options available to you from Colorado Springs properties which could be implemented in short amount of time when needed and allow you enough time to get everything in place for 1031 or cash out refi.  The market is slowing a bit, but I see that as a good sign as its unsustainable at the pace it was early 2021 and it may take you a whole month to sell both properties instead of a weekend..  But will remain a strong sellers market 

Worst case scenario is you have appreciating, cash flowing properties in a strong market until you find a property and make your decision 

Congratulations on a great rehab of a Victorian home.  It sounds like you have multiple good options,  at first glance I would look at the tax exempt sale since you have lived in the property while you rehabbed to be the best option.   

Another to consider when contemplating hold and rent strategy is would this property make it a good rental?  If you are wanting rental properties you can always take the proceeds and invest in properties that would fair better as rentals.  

It difficult to predict the future but so far with COVID and eviction moratoriums the majority of tenants (90%+) are still paying rent and COVID is not going to last forever,   but it does emphasize the need to have adequate reserves 6 months + for expenses and as always screen your tenants well and it should be fine.  

Both articles are interesting and provide pieces of information.   Like mentioned a $30 decrease in rents can be temporary and due to COVID not to mention averaged in a larger Denver metro area.    I'm watching the class A condos in Downtown Denver and the response to average days to rent and prices for those types of properties.  Which could indicate a weakening demand for those types of properties.  

I would agree with @James Carlson on the effects of low interest rates as people will buy a house based on the payment they can afford not necessarily the price. 

Low Inventory 

With inventory less than 1 month could be temporarily suppressed as people are not wanting to move unless absolutely needed to during this time,  but less than 2 months inventory indicates demand is higher than supply which won't induce price reductions. 

Distress Properties 

I have experience buying distressed notes, it is rare to find a defaulted note or REO in Colorado, of the three that I have run across in the past 3 years only 1 was in Denver metro area.
  
Articles like Corelogic are useful but they aggregating data on national level trying to find trends and sum them up in a few pages.  I remember hearing there are over 400 individual real estate markets in US, so its important to keep in mind the source when they drill down to specific market predictions.  Which is why I tend to give more weight from someone with years of experience in local market.  It pays to know your market, or at least know someone who knows the market. 

@Gorden Lopes Great job on the first OOS BRRR, wouldn't you want to stay in this market and build momentum and local team out? Even if the deals are harder to come by now you have the advantage of being established in this market.

@Jason M.  I hear what you are saying,  I am looking into Denver market after having started investing out of state which was initially attractive for the price point but looking at a 1031 exchange and buying in Denver market.  @Chris Lopezis a great resources of information and sounds like you already have a good start on that front.      

I still think its worth to save up and invest the 60k+,  just remind yourself this money is invested and not lost... just tied up in the equity of property.  But I know the apprehensive feeling of investing funds in real estate.    I won't mention the unfair comparison of how easy it is to lose money in your 401k and stock investments in these times.  Yet many of us do it every two weeks through our 401k funds.   If you think in longer term 5+ years,  the tenants will be paying down the mortgage,  property cash flows,  property will appreciate as I think its highly unlikely property will be worth less in this market,   and tax advantages.  Through in the ability to lock in 30 year mortgage at record low interest rate that is close to rates of inflation.  One caveat, I would add in to have extra reserve amounts in these uncertain times.. 

@Krysta Bonner

I have used suncoast property management for the past 3 years and have been happy with them.   They have the perspective of the investor in mind and not just see the owner as a source of income and how many ways they can create revenue from them.   

I agree with question proposed by @Caroline C. but I would add I almost didn't go with Suncoast because they had a high cancellation fee and if I remember correctly it was over a year agreement.   But I'm glad I didn't find someone else because they will go the extra mile to maintain the relationship and solve issues if any arise so I have't even thought of changing.   By comparision I am on my 3rd PM in Indianapolis. 

Couple points to consider, if you are financing down payment with HELOC then I would include that as part of debt servicing, if not already.

1 how did you verify the expected rent?   a good property manager would be able to provide an accurate rate to expect in that location and minimizing vacancy 

2. Self managing?   the management fee is low at 5%.   Even if you plan to self manage I would include a 10% management fee in analysis as your circumstances could change. 

2. Is is it occupied?  inheriting tenants?  That could be possible issue to further evaluate if offer accepted 

@Renata Johnson Great news is your first investment experiences is usually the worst, If you can still get out of this with little loss, that would be the best bet. What state are you in? He is right about the difficulty of finding a lender who would give you a loan on it. You mentioned this was a rent to own contract and not a contract for deed? You would be wanting a CFD which grants more rights such as ability to rehab the property and spells all sales figures in contract. Hit the reset button, find a CFD and have a lawyer look it over, there is significant variations in CFD depending on state, the lawyer would be well worth the money to look it over.

Hello Dominic,   you have a great vantage point of being real estate attorney and glad to see the light bulb went on to consider investing yourself.  Some good books to provide a good foundation in this area that I started with and recommended,  the are all active note investors

• Josh Andrews:  Paper Profits
• Martin Saenz Note investing made easier and Note Investing Fundamentals
• Dave Van Horn Real Estate Note Investing
• Alex Goldovsky  Bulletproof Title Due Diligence
• Fuqan Bilal Turning Distress into Success
• Bill Bymel Win Win Revolution
• Jim Napier Invest in Debt

Kevin Shortle also has a book Real Estate without renters,   I haven't read it but I'm sure it contains some good information based on Kevin's podcast and experience.   These will give you a good foundation and you'll notice some of the information overlapping and pick up a additional nugget or two from each approach,  as you know each individual note investment will be different.