All Forum Posts by: Skyler Smith

I'm sorry for your loss. Good for you on planning for the future, it sounds like you're going to make responsible choices with this gift. You'll find that real estate is a fantastic store of value. Single family homes and townhouses are often going to fluctuate in price more than apartment buildings, because they follow the retail market, where apartments are based on how much income they produce. 

There is for sure a middle ground between buying properties for cash and flipping houses. I buy primarily small multifamily homes and do venture in to the single family home realm a bit as well. By breaking up your $250,000 as several down payments on several mortgaged properties, or say a 30% down payment on an $830,000 unit building, you would accelerate the growth of that $250k much more than if you buy a property outright. We have a developer up in Logan that is building townhouse style 4plex buildings in the $620,000 range and I believe that will prove to be a great cash flow and equity investment. 

It sounds like you understand the risks and benefits relating to the different buy and hold strategies, and I highly doubt the two townhouses you've found could be bad investments. You've obviously thought through it, and can see that they will preserve your capital well and generate nice cash flow. If you parlay your down payment into leveraged properties, your money will grow faster, and that $250,000 could be more than enough to last you the rest of your life by the time you decide to retire. No need to flip properties, but I think it's worth looking at repositioning your portfolio every 10 years to maximize your equity and accelerate your wealth.

I agree with the importance of feeling safe, but I'm willing to rent, buy, and sell in areas that I wouldn't live in. 

Did you try fighting the appraisal? Are there comps that support your price? Is there anything about the home that will change between now and then to actually make it worth the offer price? If not, there's no point in waiting for them to qualify for an FHA if FHA is going to give them the same answer in a year that they did now.

The rent to own shouldn't open you up to more risk than just leasing your home would. I agree with Tom, you're right that they're more likely to treat the home like their own than just any renter. If your financing allows for you to rent the house for a while, do it. If you need to cash out quickly, I'd just wait for the next offer at that price - provided the home truly is worth the offer price and you could get it to appraise. 

Taking a smaller commission as an agent if the buyer will list with you is fairly common, at least in my area. I know agents that offer to list for less because many buyer's leads come from buyers calling on an agent's sign or ad. I think it makes sense, an agent should always be looking for more listings.

I also don't have a problem with using the listing agent to write the offer after they get the LOI, I know many investors that do that for a variety of reasons.

Ideally you'll want agents in your target markets that are looking out for you, and watching for deals. If you have an agent that can bring good deals to you, I'd give him a raise, not ask for him to share the commission! If he is the one who offers the discount, then he's giving you a raise as his client. To me, it's all in offering, not asking. If you were to take that to Grant Cardone, he would absolutely agree, I guarantee it.

Good luck. I worry that it's not a sustainable model. It might be a good way to catch some low hanging fruit, but it really will stigmatize your business in those markets that you run your campaign. So much of real estate requires cooperation, and it sounds like you will alienate 96 out of 100 agents, as you only have 4 that would work with you again after your campaign. I guess you could go through a new market every month and it wouldn't really harm you, but it doesn't seem like the most effective way to find deals.

Keep us posted with your success, I hope the flip goes well.

How about wood chips? Gravel and sage brush? 8D

this is a great start! I like your plan and your goals seem well defined. 

One small detail on the tenant move in, I would make sure that they get all the utilities in their name before they get a key. It can get frustrating and messy, and you lose a lot of your leverage after they've moved in. 

Craigslist is good for finding out of the box deals. Many wholesalers use it, also agents and FSBO's who don't want to pay a selling (buyer's) agent. Another useful tool on Craigslist is to search for keywords like "owc" or "owner will carry" which is a creative financing option for your second and third properties that are going to be harder to finance with a bank.

One way to look at your exit plan while you're this early in to it is to focus on what your end game is. If you are investing for cash flow in retirement, you should focus less on cash flow today, and more on building equity that will grow. As your investing career progresses, plan to reposition your portfolio from highly appreciating assets (especially assets where you control forced appreciation) to strong cash flowing assets. Repositioning your portfolio every 10 years or so will maximize the return on your equity and will give you exponentially more cash flow in retirement. A property kicking off killer cash flow now may not be your best investment 40 years from now. I'm excited about your plan, I hope it works out well for you! Good luck!

@Ryan O. I think keeping an active license and a full time job is manageable for sure. I got my license while working my full time job and at first didn't intend to go full time in real estate. I juggled both for two years, and could have for a lot longer. If someone were thinking about getting their license, I would probably encourage they keep working a job or have investments to carry them through the beginning phases of being an agent

I should really be taking notes during podcasts. I take them sometimes, but other times I just go through the old episodes like crazy just trying to find one line that would help me with what I'm working on. Gotta write it down!

Ryan, sounds like you've got some great goals and are certainly on the right track. If you do decide to get your real estate license you'll need to put time and money into it, so it's totally up to you but know that it's not just a passive thing to keep. For me it was the right decision, but if you don't do enough deals it gets expensive. 

$1,000 of passive income by 2020 is TOTALLY realistic, provided you get started. Have you looked at small multi family units near your campus? I got started right after college by getting an owner occupied loan on a four Plex. That sort of thing can be a great investment, it's hard to beat those low money down loans. I didn't have any knowledge of construction at first, but make sure the cash flow will cover calling professionals when the time comes.