All Forum Posts by: Mel Park

@Rich O'Neill      

@Ben Nelson

Gentleman, thank you both for the replies. I read them both twice and have been digesting it for a day or so and *all* of your points are well taken.

Rich, yes - I am good being in an active business. My previous life - since age 16 was 70 hour weeks. Mind you it wasn't construction or manual work, but still - -6 days a week, late nights, fast food at my desk, and since age 24 - it was my net worth invested - - and I know how it I to make huge money one month, and to lose huge money another month.   In those days, I felt - -  I knew what I didn't know. I tried to hire people to compensate for it while I learned what I could and usually it worked.  At times, my profits were a bit 'under' the benchmark - but heck it was still a profit.      I realize - many experienced people will say the following is pitiful, OR too much....but I can only speak to my goals:

*To buy and sell (2) homes per year....and net about $40,000 after all costs, transactional fees, holding costs, etc.    Working capital: I'm ok with devoting $450k cash to it, give or take.

Thanks for the book suggestion I'm ordering it now.  

In the meantime - I know I can Google it - but I prefer hearing it from real people - syndication - what is it? How does one identify a good one versus bad?

@Brandon McLean I appreciate all your comments.  By staying retired..... I meant that for 20 years -  I've had 90% of my net worth invested in small businesses,  I've never had less than 40 full time employees, perhaps 1500 customers per month - tons of profit - but tons of risk and competition - - - and after monetizing that, I don't want to go back to risky cut-throat 24/7, where millions are invested and risked.      I am totally fine putting in all the time on a flip - but *1* unit, with say - $200k invested - with me, a lawyer, a realtor, a GC and some vendors - is more appealing to me than my old business life.

On General Contractor - yes, I am worried about being taken for a ride.  Do you feel it's realistic for me to find a GC, and establish a relationship that says "look, make your profit, that's business. If you fleece me, you win.  But if you are straight up, you get job after job" - - do they care?  

Vis a vis Raleigh/Wake - - are there areas that haven't boomed yet, but you feel eventually - will?   As in ..... any ideas what's the next Cary or next Apex etc?    Also, are there areas more conducive to finding a rehab and making it profitable? thanks

@Ryan Hesselberg

My opinion: You and Wife have invested your hard earned savings.  You are free to ask what rent you think is conducive. The tenants can accept it or leave.

You're not there to deal with a union. 

I own (2) rental units - 1 is fully owned, 1 has a mortgage.    

I do not have a 'job', I retired 8 months ago.   BUT, I can show 7-figure liquidity with zero debt. 

I'd like to buy 2-4 rental units and see if I can get a mortgage and I'm looking for a broker who knows how to work with a situation like this.    I was referred to one - - but it's been 3 weeks, and the guy is saying he's swamped and he hasn't even had a chance to look at my application.

Anyone know a good responsive broker in  Georgia, or 2nd choice, North Carolina?

Thanks

Experience: I own (2) units-  but they were turn-key, and are stable rentals. 

Strengths: Very liquid. For a deal, I'm ready to go.  Have done well in my previous business life (not house related). Also, full of time - I'm 46, and sold my company a year ago. 

Weakness: Can't fix a lightbulb, I'd be dependent on a General Contractor.  Also, I have no clue ....how to start.  

Geography:  Prefer suburbs.  Philly, Raleigh, Atlanta. 

Ny newbie vision.....  

1.)Pick my geography, find a realtor specializing in investors/flippers.  I'd like someone who can tell me..... "look, XYZ development in XYZ, NC - is  coming up or in demand. If you buy this, put around $75k into it......current market says you'll sell it for XYZ"

2,)Find a General Contractor - who understands what an investor wants, and have a relationship. That means - he tends to my project in a timely manner - and while I don't want to be fleeced, I'm fine with him making a good profit, and making sure he's paid correctly and on time.

I'd like the realtor to identify the unit.....and then have my GC go in and give me a rough estimate......and then be it cash or finance - do the deal and start.   I know I can't do the manual work myself, but I'd like to be visible on site - partially to get used to the flow, hear the kibitzing about buying materials, observing things about home repair - -and the work team sees that I'm visible, and watching. 

I just don't know how to start. Or WHO to contact.  I don't have HGTV visions of quitting my job and becoming Jeff Bezos. I don't go to free dinner seminars on get rich quick.  I've owned medium sized companies, been rather profitable, and feel I'm in a position - with a little luck to stay retired forever.   I'd like to start with ONE flip, and learn lessons bad and good - and then see if I can do, 1-3 per year.   Goal is not just to 'chase the dollar' which I like doing.....but also, yeah, to make some money.    Any suggestions, any at all would be appreciated. Thanks

@Justin Goodin As a relatively new investor, certainly I'm trying to be patient.  I own (2) rental townhomes and really have the time, need, budget, and desire to buy more.   But unless there's a permanent hike in rents, it's hard to justify.  

After the 2009 debacle.......do you feel that investors are STILL doing adjustable rate mortgages - knowing full well they'll reset?

@Jai Reddy.  Yes, Wife and kids.

@Aaron F. I am admittedly new to this.  This is my 3rd investment home only. 

Yes it is risky. But for me it's just diversifying a bit.  Sure it's nice to pull up my brokerage account, see them cute green arrows, and listen to talking heads shout "Strong Buy!" and "Conviction buy!" and sure, many times it's just fine to sit back, earn a 3-5% dividend and see one's stocks go up.  But - yeah, risk there too when it goes down. And people say "oh, I took a tax loss". "oh, I did dollar cost averaging" - which is all a fancy way to say - my $2.00 loaf of bread is now being sold for $1.00 today. And I'm trying to make it sound like I didn't overpay.

Real Estate Risk? Sure.   But as a diversification play - I like that it's bricks, not paper.   If currency goes to heck - and the new currency is marbles - I feel someone, will pay me marbles to live in my dwelling.   Also as far as risk - If I'm doing A/B properties, with A/B tenants - I feel there is risk, but minimal risk.

Really hoping I can qualify for mortgages. Would be nice to put 40-50% down, enjoy minimal cash flow + equity + appreciation - and with the leftover money, maybe dabble in  fixer-uppers, or take advantage of stock market dips.

@Aaron F.

$250,000 purchase price. 

$51,000 down

$199,000 [email protected]% for 30 years. 

Add $125 monthly insurance.

Add $200 monthly property taxes

Add $150 monthly HOA

Add $40 per month - CPA expenses. ($2000 per year, divided by 4 properties)

Add $75 per month maintenance ($900 per year - A/C, Plumbing, etc)

Add $160 per month upgrades.     ($1900 per year - eventual new carpets, new paint, replace HVAC, appliances)

*****$1,758 monthly outlay

Monthly rent: $1800 - management 180 = $1720 +$25 trash fee+ $1745 net rent.

Cash flow =.   Minus $42.00 per month. 

Also, I don't plan to do all my units cash.  I have recently early retired  - earlier than I anticipated (I'm 46), and I don't want all my money in paper assets with the stock market.  I'm fine with leaving cash idle till the right deal comes up, but I wanted to deploy *some* cash at least.    Also, this home along with my other rental is depreciated, that means my real estate company, on paper nets zero dollars..... so unto $80,700 worth of stock market capital gains and dividends - are taxed at a 0% rate.   This was just this unit.

Currently working to see, if I can get approved for mortgages without having a job or W2 income.

Well my deal got done around 4th week of September.  It was 3beds/2.5 townhome in Acworth, GA.  Was move-in ready, end-unit.

We got less applicants than we thought.  Perhaps 20 walk-thrus, and 3 good quality applications.  I"m hoping this was because it's October - and most families had already settled down over the summer. 

$1805 rent +$25 trash collection fee so $1830 per month. (Trash is included in my HOA fee)

It's a 2 year lease, and there's an auto-escalation for year #2 -  where it goes up another $100 per month. 

Tenant: 30something, he's got 2 bachelors degrees - working in his degree'd field for 5 years.   He moves around a bit more than I'd have liked - but it was all within the same company or industry.   Credit score is 850 - which is higher than I've ever seen for an applicant.     Gross monthly income is over 3.5 times rent.   Also his girlfriend went on the lease - smaller income ($2000 per month).

I know I can't count on meteoric appreciation like last year, but if over the next 5 years, I can average 3.5%-4% appreciation that would be just perfect. 

After *all* expenses, ROI on rent is 3.5% - this excludes any appreciation.

A week later, I saw the SAME unit as mine, in the same complex - it was advertised for $50 more monthly rent than mine, so I feel secure in my rental rate being at market.