All Forum Posts by: Leland Barrow

My wife and I stressed about how to find the right renters for our first rental. We wanted to make sure we were legal in everything we did. My brother in law who has been in the business for awhile thought it was funny "rent to who you want, you own it and they don't" was his advice. So, don't over think it. Can they pay? Do they have good references? Are they from all appearances responsible? Be picky and dismiss whoever you want for whatever reason that you want. Don't make an emotional decision and don't be bullied into commitments that you do not want to make.

I think that in any business you start small and scale. There are many examples of great ideas that failed to be executed because they scaled wrong...ie Webvan. If you wnat to open a restaurant then a good idea may be to start with a food truck for proof of concept. Proof of concept is not just proof in the market place but instead and most importantly proof to yourself. Starting off investing in homes that are 150k+ requires more of everything as they get more expensive. There is a price that everyone has to pay for experience and knowledge. It is better paying that price at lower investment levels where you can tolerate failures. Buy a cheap house in a war zone and use it as a means to educate yourself. Buy cheap houses in general and learn how to pinch pennies and master a budget. If you can be successful multiple times at 50k, then you can be successful at 150k, then 500k, and the a million.

Leave that strategy to the hedge funds and investment firms to go big and then later realize that they don't know what they are doing.

Mobile homes, approximately 9 of them.

Texas will slow but not decline. Some places will be hit harder than others. I would say that Houston has yet to see the decline that is due. Austin and I35 not as much. Every part of Texas is different and the Central Texas corridor should still be bullish. I personally am hoping that more deals can be cherry picked. My neighbor works from home for a large petroleum company, so not all petroleum dependent occupations are in Houston. It will be nice from my perspective to see the market flatten out and more inventory hit the market. The best part is petroleum will rebound in a few years and housing prices will jump in the areas that are becoming depressed. That is my two cents on Texas.

Being fat may not be grounds from a discrimination suit but the underlying reason would. There are all kinds of disorders that can cause weight gain. You might as well say: No one that is bipolar No one that has diabetes No one that has clinical depression No one that has a physical disability All of these can contribute to weight gain. Do yourself a favor and just worry about whether the tenant can pay the rent.

Like any other business when you have no money and no experience then your first investors are friends and family. The reason so many traditional businesses fail this way is because you do not get the experience of having doors shut in your face. If it is a good deal then put it in a professional plan and shop investors. Start with the most legitimate first like a locally owned bank, then keep shopping it. Expect to get told no, and expect the flaws in your great deal to be pointed out. This is how you use others to educate you in your market. This is how you make business contacts. Jumping in without going through that process is probably the easiest way to fail. Like the others said if it is truly a good deal then you will find an investor.

The "why" of the property being a short sale is important. Major foundational, flooding, or structural issues can cause a short sale.

Bandit signs are annoying. Build business without annoying people. I say that with good intentions and not to be a sour face. Honestly I take them down whenever I can safely do so. They add to blight and don't help neighborhood values. Of course I would see them everywhere around where I worked. It is not just REI that use them. There is an ethical principle that suggests thinking about an option and imagine every person doing it. If every person doing it would cause is unethical then a single person doing it is unethical. A similar comparison would be littering. One cigarette butt is harmless, 330 million per hour is not harmless and is unethical. Good business owners should choose behaviors that add value to the community and does not harm it. If everyone put their goals and needs above everyone else then this would be a pretty sad world to live in. Love, Mr. Sourface

I have been a fleet manager/ director for awhile. Managing fleets of 150 to 13,000. I am looking at houses the same way I look at fleet vehicles and I would like to know if my thinking is flawed. See below: I buy a standard setup because it is easier to run analysis and predict costs. For example I currently manage a medium sized construction fleet. Every foreman gets a crew cab truck, backhoe, trailer, generator etc. I try to buy the same models every time. So I want to focus on 3/2 houses of similar construction. No pier and beam, and nothing older than 1960. When it is time to plan fleet additions and analysis I pull current value, lease, service, and utilization analysis charts. I am looking at standard deviation and pinpointing outliers. If the value is high and service cost is low then I may sell it just as much as a value low and high cost unit. So in real estate terms I would sell those that have the highest equity every year and those that have low equity and higher costs. This way I am not losing money only offsetting costs as I focus on liquidating outliers and maintaining close to the standard deviation. In fleet management I have moved away from reactive maintenance to what is called predictive maintenance. Predictive maintenance is simply using available data to do repairs before they occur. It is based off of averages. For example the data shows that the mean life cycle of an A/C system is 12.3 years. An A/C system is 93.2% likely to fail between June 15th and August 17th. The average A/C replacement price is 22% lower if properly negotiated between November 1st and March 9th. The value of complaints and exposure by having an a/c system fail in summer on a renter is calculated at an additional 8%. Taking that into account all a/c systems would be replaced no matter what condition in fall/winter at 11 years old or more. This is a crude example. I am a newby to real estate but maybe predictive maintenance has the ability to lower costs like it does in the fleet industry? The idea is to always be in control and always avoid unpredictable situations. I want to know what my expenses are next year and be able to forecast out five years with greater predictability. What do you think?

Good morning BP! I have used BP as a resource over the past few years but never really engaged the community. I used to be a news junkie so part of my morning routine was reading the news. I decided recently that starting my morning reading mostly about what was wrong with the world was not the best way to start my day. So I am substituting that for interacting on BP.

I am an entry level investor. My wife and I moved to San Marcos Texas to be near the I35 corridor and what I am predicting this will be one of the hottest areas over the next 10-20 years. Selma, Schertz, SM, Kyle, Buda, Round Rock, Pflugerville, New Braunfels, and Canyon Lake are just a few of the areas that I think will be hot for some time (shameless keyword plug).

I grew up in California and I see some very telling similarities between Los Angeles suburbs and the suburbs around Austin and San Antonio. The corridor between San Diego and Los Angeles and the I35 corridor in particular. I also think that the contraction in petroleum production in Texas is going to turn the market from a sellers market to a buyers. Rising waters raise all boats but receding waters can beach more than those that are docked.  

Enough of the silliness. I have two real estate deals under my belt. I flipped ten acres of land  for twice what I paid for it. I am a disabled veteran so I used the Texas VLB. Then we purchased our first rental in the Austin area and it is cash flow positive and gained equity in it fairly quickly. I finally feel like I have momentum and want to keep it up by adding another rental this year and at least two next year. I personally want to focus on LBH, because I have a good career and I want to invest in real estate for the benefit of my three daughters. However, I love anything that is a good deal and I will adapt to any strategy. I was a 82nd airborne paratrooper in the military so I learned one important lesson about life "whether you are afraid or not, run for the door and jump with your eyes open".

I am not looking for a mentor but I would be very open to a partner. Someone with moderate resources like myself, that enjoys hard work, and absolutely hates to lose would be ideal. I would also be open to doing the grunt work for out-of-state investors if the situation was right. I think I will be good at building a real estate portfolio not because I need to do it, but instead because I am passionate about it, and hungry for it. I have all daughters and my oldest is 9, she knows how to do baseboards, trim, tile, and use power tools. I want to teach all of my daughters the important things in life, like the importance of a persons mindset about what they can accomplish and how hard work is its own reward beyond the monetary return.

Wealth is a consequence of passion properly executed.

You can quote me on that. At least I hope I have not plagiarized that. Hopefully this post comes across as slightly humorous and not narcissistic nonsense.