All Forum Posts by: Katlynn Teague

Hey Ricky!

Mentorships and coaching are a thing. However, most are taught by SEO gurus.. Just be cognisant, I would try to find a person in your city thats done deals to learn from! I went a different route, got my real estate license, and went to work for one of the largest wholesaling companies and learned everything from there! I was there for almost two years but just recently left to start my own company. I think it depends on your learning style and how much time you have to put into this!

1 Vote

Hey Ricky, welcome to BP!

I would highly recommend going to local meet-ups in your area. That way you can meet all types of connections to get your foot in the door. I think a handshake conversation goes a lot farther than a phone call (old school). Propstream is great, you can get a lot of data off of there as well as driving for dollars which I believe is also around $99/month.

Propstream can also pull call lists, I would get a script together and practice, practice, practice, and hop on those phones! Try to do at least 100 calls a day. You will be surprised...

However, to really get going in wholesaling you gotta do it all every day. This business is tough, it takes time compounding to really see results. But, as long as you keep doing the work it will come. I've been in the industry for 2 years and I've documented a lot of the challenges I've faced on BP!

1 Vote

Quote from @Chris Martin:

My 2 cents.

All of the rentals I've sold recently (past two years) have been flipped vs. remained rentals. Why?

The following looks at hypothetical purchases, anecdotally and in relative isolation, meaning there may be a reason (for instance to generate large tax losses for "active participation" investors to offset other income) for some individuals to undertake a particular kind of purchase. Here are some scenarios.

For a (Raleigh median) $382,650 purchase, rented at $1,400 /month rent, let's assume an all-cash purchase. Other than taxes and insurance, I'll assume the best case in that there are no other expenses. Income would be roughly $12,706 ($16,800-$4,094) based on projected annual tax (Wake County 0.96% of AV (taxed at 0.5 market value)) and insurance (0.59%). That's a pre-tax return of 3.3%. As an alternative, that $382,650 placed in 4-week T-bills with zero risk will yield (at today's 5% rate) $1,594 per month interest income but with no tax benefits.

On the other extreme, for a (median) $382,650 purchase, rented at $1,400 /month rent, a mortgage at 0% down, 5% interest fixed for 30 years, the interest payment alone starts at $1,594 / month. Simple math results in a significant absolute negative cash flow if fully leveraged. This property would not pass my first screening (rent >= PITIH at full leverage). This scenario results in over $535 negative cash flow.

At a typical 20% down ($306,120 loan), 5% interest fixed for 30 years, Interest starts at $1,276 / month. After taxes and insurance, your $76,530 down payment "investment" will yield a negative cash return for many years. The non-tax Depreciation Expense (assuming 80/20 improvement to land) will result in an annual $11,132 ($382,650 * 80% / 27.5) depreciation expense which will exceed the $3,000 IRS limit but will guarantee you have no current tax liability for this investment for a long time. As an alternative, that $76,530 placed in 4-week T-bills will yield (at today's rate) $318.88 per month interest income with no tax benefits.

At the moment, I see no compelling reason to buy rentals (arguably at the top of the market) that return less than the short-term treasury bill alternative. Hence, to answer the "trend" question, I see a large number of investor purchases becoming flips.

https://www.americanfinancing.net/mortgage-calculators/amort...

Chris thank you so much for your comment. Gained a lot of insight here.
I agree with your statement "I see a large number of investor purchases becoming flips." I have been involved in real estate full-time for the last 2 years and I have only sold two rental properties. One, after purchasing my buyer decided just to flip it. In Atlanta, the big thing is short-term rentals inside the perimeter but, I still do not know how they can cash flow with city tax, etc. On top of that, the city passed laws not allowing any one person to own more than three STRs. Long-Term Rentals in the City of Atlanta? Not a thing, it's almost impossible to reach that 1% rule, you have to go into the suburbs. Which leaves flipping!

0 Votes

Quote from @Shawn Parsh:

Katlynn,

I live and invest in NE Tennessee and we still have a shortage of inventory. There is a huge demand for long term rentals. This area has a lot of short term rentals because we draw a lot of tourist looking to see the mountains, hiking, or biking. There are also very few houses on the market and the ones that get listed usually move pretty quick.

Currently there are single wide trailers that are selling for over 200,000. It's crazy to me to think someone would pay that much for a trailer, but it's happening. Some people are buying campers and renting a lot because they can not afford a house or find a property to rent. The RV lots are going for about 500 a month.

WOW.... $200k for a trailer and $500 for the lots???? Thats insane.

0 Votes

Good Morning BP,

Rental Investors,

There has been a lot of talk going around that rental interest is going to skyrocket due to multiple factors including high interest rates, the income relief program ending, and many foreclosures.

Have you seen any changes in your properties? Is your vacancy periods shorter or longer? Have you been able to adapt?

0 Votes

Hey Malcom,

I have been wholesaling full-time for the last 2 years.. it is an absolute grind. The best way to describe it is like moving a 10,000lb ball. Takes a lot of time and hard work but if your willing to put in the work you will see the results!

0 Votes

Chicago, Illinois

Hey Evan!

I would recommend reading through this forum and you can learn a bunch about wholesaling.

When getting a house under contract you have to provide valuable consideration which is Earnest Money, during your due diligence period you have to sell your rights to this contract to a buyer. Most wholesalers require no-refundable "earnest money" so in the event the buyer backs out of the contract, you are not at a loss.

3 Votes

Jade this is awesome, Congratulations!

I totally agree with @Kyle Spearin, definitely start with getting your license and then learn as much as you can from the people around you. Another great avenue would be to start wholesaling, that way you learn how to find discounted deals, sell them to investors in your network you can learn from, and make some money! If you have any questions, don't hesitate to reach out!

1 Vote

Philadelphia, Pennsylvania

Congratulations Nir! I am out of Atlanta, happy to build the connection!

1 Vote

Cleveland, Ohio

Following on this post to get it back in the algorithm!

0 Votes

All Forum Posts by: Katlynn Teague

Katlynn Teague has started 80 posts and replied 326 times.

Post: Beginner Seeking Guidance

Post: Tips to Finding Distressed Properties: Help a Rookie Out

Post: Feb Market Trends and Outlook

Post: Feb Market Trends and Outlook

Post: Rental Interest in 2024

Post: Aspiring Investor - Wholesaling Interest

Post: What is the risk involved with wholesaling?

Post: Starting Young! Any help?

Post: Hey there, I'm Nir!

Post: New to Wholesaling? HELP