All Forum Posts by: Kyle Smith

@Johnnie Hawkins the Rich Dad book is good, but a little over rated. It seems to be touted as the best REI book around and I just don't agree. For me, How to Win Friends and Influence People is more valuable

Hi @Forrest Baker. As the others have said previously, you’ll struggle to find cash flowing properties in many areas of the county. I have a duplex in National City that we bought in ‘09 that does really well but I wouldn’t buy it in today’s market if I was strictly going for the cash flow. Rental growth hasn’t kept up with appreciation here and that won’t change (particularly with the recent rent control legislation being enacted).

Anything that pencils out in terms of cash flow is almost certainly going to be in C/D neighborhoods but those areas appreciate nicely as well. I work in those neighborhoods in SD and can help with specific streets in many cases.

PM me if you’d like more info. I’m happy to chat more about specific areas

That’s all I’m saying, @Brenda Whittaker. The same law of supply and demand that brought you to BP is at work here with your current situation. You had a need (demand) that was met (supply) here on BP; same as you have a need (demand) that your tenants can’t meet (supply). The fix is SIMPLE but not EASY

@Keith Meyer interesting article. I guess it’s not inconceivable based on the metrics given, but I do wonder how long it might take?

As an aside, from here in Mission Hills to downtown Los Angeles is 123 miles or roughly the equivalent distance of Phoenix to Tucson. It’s a 2.5hr drive from here to LA, whereas Phoenix to Tucson is only an hour and forty-five mins. That’s probably due to the fact that there isn’t much happening between the two AZ cities, yet...

As the article points out, Casa Grande is the half way point between the two cities in Arizona and if their populations continue to grow, it could see overflow there. Perhaps similar to what happened in OC as San Diego and LA expanded? Interesting topic for sure

Hi @Tiffany Drahonovskyand welcome to BP. I looked at your calculations and a couple questions came up: 

1) It looks like you plan to buy all cash, but what's the exit strategy? What do you plan to do with the property in 1, 3, 5yrs for instance? By the looks of things, if you went to refinance, would your be negative cash flow at that point?

2) It looks as though you plan to manage the property yourself; if not, your management fee of 2% is almost certainly much too low. 8-10% is a better rule of thumb. 

3) It seems you've reversed your estimates for M&R and CapEx. Not a big deal and maybe those numbers will work depending on location, condition of property, type/quality of tenants etc etc. We use 5% for M&R and 10% for CapEx but it all comes out of the same pot anyway so it doesn't matter too much.

Good take on an interesting topic, @Armani Emon. This issue is a significant reason why wholesaling gets a bad name. Many wholesalers don't take the time to accurately calculate repair costs and instead just make up numbers on the spot, hoping to find 'a greater fool' to spin the contract to. On the other hand, we as investors could spend more time helping to educate wholesalers on how we analyze deals so neither party wastes the other's time. 

@Lauren Hogan I read the title of the thread and thought I'd share a recent experience I had with a 1031 company. To my pleasant surprise though, the owner of the company I used, @Bill Exeter had responded to your post already! 

I used them based on a recommendation from my realtor and could not have been happier. For someone trying to complete my first exchange, I appreciated the level of customer service they provided. They walked me through everything and ensured I fully understood the process. When it was time to submit the documentation and get to the closing table, they were right there helping me along the way.  

@Brenda Whittaker my question for you is, if being in the real estate business is evil and making money through real estate is evil, then why did you join an online community called “Bigger Pockets” in the first place? The name Bigger Pockets is in reference to collecting RENT, not lint in those pockets.

Having a passion for fixing up houses is great, but who can afford to continue doing this without some reconciliation on the back end in the form of market rent or selling and benefitting from the appreciation?

Be content with the fact that you’ve given a decent housing solution to a nice couple for a decade and then, move on. Find something else that satisfies your creative side without the heartache you’ll continue to get in this line of work.

@Ken Virzi and those places, along with the BBB would be more appropriate places to site your concerns (if they have any merit) instead of simple mud-slinging on here.

@Sandra Kourouma

I’m not sure if it’s possible and it might not be advisable either. The cost of borrowing money will be very expensive whether it’s conventional, private or other.

For someone just starting out, you might need a little more cushion with your numbers than someone with more experience so your margins will already be thin.

With all that said, maybe consider partnering up with someone you know and trust to get your feet wet? Maybe they bring the capital and/or the credit score, you bring the hustle and grind of finding a great deal. They bring the experience and capital, you find a great deal etc.