All Forum Posts by: Mariah Jeffery

Thanks! I should clarify, though, that I'm not actually planning to move. My job is portable but my husband's isn't. RE is still a part-time thing for us (mostly me). I'd love to live in Orlando, though.

I have 19 units in South Dakota where my husband's family lives. They do the maintenance and property management for us. The reason I chose to buy there instead of where I live is because in the Portland area, it's been near impossible to buy anything with decent cash flow for the last 5+ years. In SD, I have one property that meets the 2% rule and the rest are about 1.4%-1.7% (most closer to 1.4%). This gives me enough room to pay a property manager and maintenance person (w/ family discount), and still have good passive income. Doing business with family has it's pros and cons, but for the most part it has been working well.

I'm considering switching investing areas for the following reasons:
- There is a huge amount of competition for properties where I invest now. Last week, I put in a $65K bid on an REO listed at $59K. There were 4 offers the first day of the listing, with mine being the lowest. I have not bought property since March due to being outbid every time.
- A large percent of my family's net worth is already dependent upon the economy of a fairly small town, as well as familial relations.
- Things have changed here in Portland; I have actually seen duplexes in moderately nice areas listed on the MLS that almost meet the 1% rule. If I get really lucky, I may be able to find one that brings in 1.1% (since I'll only consider investing in a nice area that's within 10 miles of my primary residence if I'm going to manage it myself).

I'm considering trying to buy a property locally. Returns are still fairly meager, but I think I could get over $100/door cash flow if I find a good deal. The main benefit would be the control I'd have over it.

Another option is to try to buy properties in Orlando, FL, where I'm from and have family. My parents (60 and about to retire) are not interested in doing the PM work, so I'd have to hire a company, but my dad would help with minor maintenance. He'd help me look for a property and check up on it every now and then. I've only done a little research on price to rent ratios in Orlando, but on the surface they look to be much better than Portland and probably at least as good as SD. I visit Orlando once or twice per year anyway, so it would be nice to be able to write off some of that travel and to combine business with pleasure.

Changing investing areas will require a time huge commitment to do the due diligence, find a good agent, build a network, etc. I either need to go all out or just stick with the status quo. In Portland I could join the local REIA, but in Orlando I don't know where I'd begin. Any thoughts?

Originally posted by David Breitzmann:

Mariah,

It's always wonderful to learn - though painful at times. Just curious, what was the final sales price? Interested in the spread b/w the two numbers.

The final purchase price was $48K cash. It's probably best that I didn't get this one since I don't know what I'm doing when it comes to flips. I have to start somewhere, but this was probably too ambitious.

Thanks again for the advice.

No reason why this couldn't help you gain valuable experience with rehabbing. You can purchase a property that needs rehabbing, work on one unit at a time and rent out each unit after it is finished, Then sell the property to an investor and the sweat equity will be yours to invest in another property.

How about buying a 2-4 unit property and living in it for a while to get the more favorable owner-occupied rate? You can have your tenants pay for all of your expenses and save money pretty quickly that way.

All of my properties are outside of my local area. They are in the area where my husband grew up and where many family members live, and we would be visiting once or twice per year anyway. Most importantly, we have my father in law living within 3 miles of all of the properties, who does maintenance and manages most of the properties. He knows just about everyone in town and always knows where to go to find an inexpensive, good quality plumber or roofer or cheap materials. He also constantly finds leads on motivated sellers for us.

I've found that it works out well, for the most part. I can pay a property manager and still get much better cash flow than I could find in my local area managing myself. On the other hand, I don't think I'd consider buying in an area I'm not familiar with. I'd be totally at the mercy of a PM co with no one checking up on them for me.

Maybe I'm not creative enough, but none. I've bought 8 properties with 20-25% down. I've tried to go for owner financing with 10% down and always been rejected. That seems to be much harder than the gurus describe.

Our properties are actually in South Dakota and no license is necessary, so I'll have to think up another excuse. Maybe he won't be upset if we keep him as the maintenance man.

The funny thing is that when it comes to maintenance, he goes above and beyond. He takes personal pride in making the properties look nice, taking care of the lawns, and taking care of the tenants. The other day a tenant called and asked him to adjust her blinds, and he rushed over and did it! I think maybe the issue is he's trying too hard to be friends with the tenants.

I wonder what kind of inappropriate comments he might have been making that could get us in trouble. For example, he told me once that he wouldn't show an applicant with 4 kids the top unit of our duplex because "his kids would run off the neighbors". Probably true, but not PC, and I'm sure the prospective tenant could have sued us for that comment if he was so inclined.

Correction: We started buying more in Oct. '09.