All Forum Posts by: Michael King

When you said your wife loves this property...do you really think you can walk away scot free?

Like someone else said, where did all the equity go? Did they refinance after the rehab? Where did that refinance money go? If they didn't refi, where is the sweat equity, let alone appreciation equity? 

What are the management fees like on 30 properties? I'm in St. Louis, I have 5 houses, and I'm gearing up to move to my 3rd property management company. Every company I've used have offered competitive rates to keep or earn my business. And I'm just a 5 property guy. I imagine with 30, I'd have some serious leverage on fees. Right now I pay $80 a month per property, and one month's rent as placement fee for the tenant. It's going to be less when I migrate them to the new guy. 

Hello BP, I have this question.

I'm looking to potentially obtain a commercial line of credit with an interest rate of 5%, per the bank. I would be getting it against one of my rentals which is owned outright. This is as an alternative to refinancing it with cash out, at similar (maybe 4.5%) rate. So the commercial line of credit has so far 2 things going for it - an alternative to refinance and therefore closing costs, and competitive interest rate. 

Now supposing I got the line of credit for say $100K and over the course of a year paid $5000 in interest, is that interest treated the same way as mortgage interest?

I did search the forums a little, but went down too many squirrel holes before I gave up. I appreciate anyone's answer.

The numbers look good for an ROI perspective, I believe.

Hi Joseph, in order to give you helpful feedback I'll be honest. 

You're looking for high dollar but the photos don't justify to me high dollar. I see lots of junk, poorly lit rooms and crazy wall colors. Seems dark and dingy. If you're ready to move out, put all that stuff in storage somewhere, get a pro photographer in for a couple hundred bucks to get great photos. I know you're not selling it, but you are actually selling it. 

The camper in the yard, the dodgey low light sun across the front of the house, and several photos are doubled up. 

I didn't feel compelled to read the narrative, but glanced at it anyway. 

You're also marketing it as we come into the cooler season, where no one wants to uproot their nest to move unless forced to. 

Well there's a couple of thoughts for you, sorry to be so honest.

Jump on a plane to St. Louis. I'll pick you up at the airport, drive you around and show you the apartment building I want to buy. $40K will get you 50% partnership. I have $40K for it as well; $80K is close to 20% down. You'll have collateral for your cash, rather than a diploma in your office. 

 I totally echo Bob's statement. Took American Home Shield 6 months to replace every possible part on a 20 year old pool heater that was heavily rusted in the heater can (never replaced that, did they?). 3 different pool repair companies. The control panel replaced 4 or 5 times. They installed a ground rod and cracked the brick veneer of the house (like, a 4 foot long crack through the bricks). Then 4 weeks to fix a gas cooktop. 

These warranty companies would spend $1999 so they wouldn't have to pay out $2000. 

Chandler welcome to the forums! You've already taken the first step by stopping by here and listening to the podcasts. Seems like there is a myriad of ways to make money from real estate. I myself just started the journey involuntarily 3 years ago when I rented out a house I'd bought to live in (but it was too small for my wife!). It brought in about $300 or $400 a month net, so I repeated it a couple of times. My intent was just to buy houses for my kids to have or sell as their lives needed, I wasn't really into it for passive income. Stumbled across BP on YT and reading books and listening to the podcasts have lit my fire. I have 5 houses now and looking to either buy a 4 or more unit multi or do some BRRRR.

It takes time and money. If 1 property nets you $100 a month, then 10 of those is $1000....you get the picture. I think for low initial startup cost, coupled with sweat equity, the BRRRR strategy would be the quickest and cheapest way to your goal. Only you can know that though.

Chris, thanks for your service. I wonder, did you make the move and buy something?

With respect to tur(n)key properties, I was considering them but I personally feel they are just set up for lazy (or in your case, unable to access the market) people who want to throw money at others in the hopes of getting strong rewards. I considered a couple of companies, including Morris Invest. One company advertised some good looking deals, and when I went after the particular property, it would be unavailable and only poorer performers were available - I guess I fell for the clickbait. Then I saw the info and complaints about ripoffs with respect to Morris Invest.

If in your shoes, I wouldn't throw money at a turkey provider in the hopes of early retirement; remember, they're in the business to make money for them, not you. There are reasons they don't want to carry the financial burden of select properties; you can bet the good ones are in a nice portfolio somewhere. 

Anyway, that is my opinion and I'm probably a bit negative. I know there are some highly ethical turnkey providers out there, but I don't know who or where they are, and I don't know the difference between a turkey and a turnkey. I'll just stick to investing locally so I can see what I'm getting. 

Good luck.

Not that this is much help, but I was talking to a commercial lender about this last week and he told me that lenders don't bother because they have so many thousands of loans out there.