All Forum Posts by: Lee Hampton

Hold is your best option given what you have articulated. 1031 is NA given your desire to wait for return to normal, Normal? Market could rise another 30% before crashing by 20% which still puts you above your current sale price. Pick any 4 year period over the last 75 years with the exception of the 2007 subprime crisis and the housing on average increased. You also note the recent development in the area, not a sign that the area will experience price decreases soon. Your goal is to own 5, 1 is closer to 5 than 0. Lastly, you will not walk away with a net $80k, more like $55k after closing costs and capital gain taxes. Hold property and cash-out refi whenever(now or 3 yrs) u find another attractive property. Cash-out money to be used as down payment to your 2nd property. And so on......

@Aaron Kawamoto 

What is your timeframe?  I'm actively kicking tires, so still in concept stage, so timeframe is not immediate, more like 6-12 months. High level: Purchase a moderate size piece of land in Huntsville/Madison County, Land will be subdivided and several quadplexes built from the ground up. Subscribers will be entitled to their own subdivided piece of land complete with a new construction quad. I'm a builder/developer from Houston. My target is to get all subscribers close to 1% and definitely cash flowing.  

City of Houston will not allow you to place a triplex on 3000 sq ft lot. Parse thru chapter 42; The main sticking points will be navigating the combination of open space requirements, lot coverage, and minimum parking standards. So this leads you to a duplex. Since duplexes are governed by single family code and not multi-family, there are a different set of standards. Your main sticking point here will be the density regulation and minimum lot size reduction requirements. I have been able to get creative for a few people and do a SFR plus a separate small 1 Bdrm guest house, but that will depend on the dimensions of your lot. Sounds like you are flying solo, if so, you'll need to thoroughly understand chapter 33 and 42 of the code. And make friends with the COH permit analysts.

@Daniel Kim  

If you are looking to self execute a fix/flip, and you need someone to provide oversight and ensure success, I have a service that provides the structure and instruction for you to execute. Essentially, you are the project manager, I oversee. I'm not fishing on your behalf, I'm teaching you to fish. If you are looking for someone to execute fix/flip, that's not my business model. There are many others that are equally skilled at fix/flip that would be interested, not me. However, if you are looking for someone to execute lot/land development , this is where I have an advanced skill-set and a unique set of experiences that are ideally suited(see my bio on my website). The other area I am uniquely positioned is small multi-family construction. I'm happy to have a 30 minute zoom session to explore. I'm an engineer, not a salesman, thus I despise hard sales as much as anyone.

See this post from about a month ago, link below.  Same advice I gave then, now applies twofold.

https://www.biggerpockets.com/... 

@Jasmine Ward   $200k, positive cash flows and excellent appreciation potential. Sign me up for a few dozen of those. In all seriousness, that is what everyone is looking for and it is like finding a needle in a haystack in this market. Supply is limited, demand is high, money is cheap, consequently we have had a near historic rise in asset prices. Houston and Dallas both fall in this category, but Austin is other worldly and is quickly turning into a repeat of Silicon Valley. For $200k, you are going to have to anticipate the next hot spot, not chase the existing ones. You or your agent will need anticipatory skills. While 3rd ward, EADO are great Houston spots, they are no longer hidden gems and prices reflect that fact. Given you are from Ohio, there are some good markets in your home state that may not have experienced the same level of price appreciation as Houston. Are you finding it tough in the Ohio market.  Keep us posted on your Texas journey.

@Gold Akabuaku  With that additional information, seems like a solid Gold opportunity, pun intended.

On the surface, you may have a profitable opportunity, but you have way too many unknowns to make a true determination. You can't “who knows” estimated repairs. You need an estimate from someone who has experience estimating. Is it just cosmetic? Is foundation, AC, Water heater, roof, electrical panel good. You said you've been told, hopefully by a knowledgeable independent party.  The repairs may be  less than $30k, the problem is "who knows"

½ mile away could mean nothing or it could mean everything. A better elementary school, different tax rate, different HOA, all will invalidate your apples to apples comparison. Who says market value is $255k. You need real comps. Knowledge is your friend and the overlooked details are the devils. Eliminate the devils, acquire friends. --- Wishing you much success!

Lee

I have an unfavorable opinion of Home Warranty Companies (HWC). They are overpriced for the value they add, they are bottomless pits of service fees of up to $75 and in some cases $150 if they require two separate trades, .e.g., plumber and AC, even in cases where one trade is capable of repairing both issues. Then, there’s the fine print that you have to read multiple times to understand all the things they do not cover and all the ways they can weasel out of a repair. But worst of all, you are turning over the life cycle management of your cash cow to an entity that is purely transactional and one that sees you as their cash cow. Your objectives just don’t align with theirs.

And after my rant against HWCs, I still recommend you purchase a Home Warranty for 1 year, only one year. Since this is your first rental, you will need time to assemble the appropriate sub-contractors. Head lining this list are; electrician, plumber, AC guy and a jack of all trades. Once you have these in place, kindly direct the HWC “to the left”.

I get frequent requests to mentor. It is something I’d love to do but in this business, time is money. But I hate hearing someone tell me they spent $30,000 for a real estate program and yet were not given a realistic path to get started. Needless to say, I’m wary of these programs. The old saying is “those that can’t do, teach”. I’m only applying that saying to Real Estate. While I can’t change that, I can commit to taking on a virtual cohort of 8 mentees. It will not be one on one, but rather me with 8 mentees simultaneously. I’m committing to having one group session / month for six months and will cover A to Z. It will be interactive, not a lecture. My bio is on my website(www.leehampton.com) if you want to peruse. Email me at [email protected] if you are interested.