All Forum Posts by: Tom Lafferty

I actually learned about the phase 1 just the other day. Talked to someone that had to back out of a deal due to a phase 1 problem. Apparently the vacant lot next door used to be a Martinizing dry cleaners and the chemicals had penetrated the soil. I feel sorry for the current owner, they're gonna be stuck with that one!
Thanks for the reply.

To any experienced apt investors who own or have owned C class properties, how risky do you think such an investment is right now?
Obviously there are lots of variables involved, so assuming one doesn't overpay, manages it well, etc., I'm looking for opinions on the potential problems with buying right now.
Ive spoken with many apartment owners at length, and haven't found one yet that isn't doing extremely well or regrets the investment. I've heard of a few problems, like a chiller going out or occupancy dropping lower and more quickly than expected when getting rid of problem tenants, etc., but they've all gotten through the difficulties and are profitable.
I read an article recently talking about how many big investment firms that have always avoided c class properties are now looking into them, wondering if they're leaving money on the table. Uh oh....

Its funny for me that you posted this, as I just started thinking the same things over the last month. I'm part of a group here in DFW that educates and mentors people on apartment investing. The guy that runs it is quite wealthy at this point, owns several apt complexes, and could live wherever he wanted. He rents an apartment!! I thought he was crazy at first, but started looking at it differently. I owned my own home for 18 years and started doing some math. Taking into account all my expenses (PITI, repairs, upgrades, etc, MY TIME), and all my gains (appreciation, deductions, etc), and then running a few "what ifs" based on investing all that money instead, I don't know that I'd go the same route again. I like having my own house, but I just don't look at it the same as what I've been taught my whole life: A house is your biggest and greatest asset! If I could start over, I'd buy a dump, fix and sell every several years. I'm guessing my wife would squash that plan the minute we got into a house she really liked though!
I don't think youre nuts at all. The biggest problem I'd have in renting is like someone else said, just finding something I liked well enough. If you're okay with it, great!

Got it; makes sense! And great, I look old....

Bill Gulley, wow, sounds like we struck a nerve or something? I absolutely agree with you that experience is the ideal method of valuation. I can't imagine, however, not using every tool available to you in addition to it. As a beginner, do you suggest throwing these tools out the window and just guessing since we don't have experience? I don't know if I qualify as a "young'n" or not, but I certainly don't believe the answers are solely based on computer programs. Plus, I don't spend money on video games....

and why did my profile image suddenly turn on its side? It was okay earlier??

That's what I suspected. I'm a subscriber too. I've also been looking at realacquisitions.com, but trying to find out for sure if it pulls actual MLS data like Quest does

If you dont mind, which subscription service have you been using?

Yeah, the full franchise definitely has to pay marketing. I was saying that the assoc. franchise has a fee you have to pay each month that you don't buy a property. Its only $350 or so, but still....
I called up several franchise owners, and most were quick to point out that the money they paid to HV for marketing was only a part of their overall marketing efforts. Some said that the HV marketing was actually provided a "small" part of their overall leads.
Not promoting or bashing, just relaying what was shared with me.

I spent a few months recently looking at the same decision. I was looking at the associate franchise though, which is $12K. Or was, now its $15. I didn't like some of the fine print, such as a monthly fee for each month you don't buy a house. The full franchise may not have that, I don't know.
The big selling point for many of the franchisees I spoke with was the brand. One actually stopped his HV marketing, and did his own without the brand name. He said the quality and quantity of the leads he got was significantly worse than the marketing he did with the branded mailings, posterboards, etc.
I basically decided there was no reason to spend the money until I had tried it on my own. I've also been killing myself with the decision you and your wife are, where to start! I'm thinking some sort of mail campaign is going to have to be a part of whatever I do (unless I go apt complex route) given all the talk of how hard deals are to find now. With HV, youre going to have to pay lots of monthly marketing as well.

I would like to rephrase my original questions:

Is it likely that a beginner would be able to do 2 or 3 rehabs in their first year without doing any marketing? ie, using MLS, creating relationships with wholesalers, and networking. (Dont worry Jerry, this road is still leading to you, I just really want to be sure before I go down that road).
I'm debating starting up a marketing campaign, although I'm truly interested in rehabbing rather than wholesaling. I'm sure the long time rehabbers have deals brought to them due to their reputation and experience. I'm wondering if a small time person has any hope of finding a few deals without spending a ton on marketing. I've attempted to get a few MLS properties, but they end up getting bid up way more than I think they're worth. I've tracked several through purchase, rehab, and resale through MLS comps, tax records, etc, and I don't know how these guys are making money?? Granted, I'm no expert at estimating repairs at this point, but paint, flooring, and kitchen updating would eat up the whole margin between what they paid and the confirmed sale price!
I'm working on building some relationships with wholesalers, but so far it hasn't been terribly fruitful. I don't know if they don't have deals, or if there just aren't enough left after they go to their "A list" of buyers.