Skip to content
×
Pro Members Get
Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
ANNUAL Save 54%
$32.50 /mo
$390 billed annualy
MONTHLY
$69 /mo
billed monthly
7 day free trial. Cancel anytime
Pick markets, find deals, analyze and manage properties. Try BiggerPockets PRO.
x
All Forum Categories
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

All Forum Posts by: Mike Kehoe

Mike Kehoe has started 9 posts and replied 80 times.

Post: The Truth about Wholesaling!

Mike KehoePosted
  • Wholesaler
  • Chicago, IL
  • Posts 84
  • Votes 81

@Will Barnard Good post. It sounds like they have issues with accurate underwriting, rehab costs, and comps. Ouuuf. Not great for a wholesale company.

With that said, as an investor, I never look at rehab numbers or ARV from a wholesaler. We always run our own rehab budgets and ARV comps.

When you receive a deal from a wholesaler, my recommendation is to first pull as-is, cash sales, within a year and quarter-mile to determine if their price is in line with recent sales to investors. If it is, I'd then pull ARV comps and visit the property to determine my own rehab budget. If you consistently see deals from the same wholesaler priced well above as-is cash sales in the area, I'd request to be removed from their list.

As a wholesale company, my team and I don't provide rehab costs. We only work with investors that can analyze the rehab numbers themselves. Some of our investors do rental grade rehabs, and others do top-notch rehabs. Everyone's cost of labor differs as well. We'd be doing a disservice if we provided rehab numbers. We provide ARV comps within a year, quarter-mile, within 10 years above and below the build date, property type, etc. Sometimes we have to expand those parameters when there are no recent sales, but we show that to our investors.

Our focus is on finding great deals that we offer below or in line with other as-is cash sales in the area. For us to make any money, we have to get it under contract below that price.

Post: Seeking (More!) Biggest Mistake/Lesson Learned Stories

Mike KehoePosted
  • Wholesaler
  • Chicago, IL
  • Posts 84
  • Votes 81

Hey @Melanie Stephens, I have stories ranging from having six figures stolen from me from a "mentor" that turned out to be a scam artist, to having a four-unit building wit on the southside of Chicago with every unit being occupied by gang member squatters. Within each, there are micro-stories. Let me know if you want to talk. 

Post: Quit My Job and Plan to Wholesale

Mike KehoePosted
  • Wholesaler
  • Chicago, IL
  • Posts 84
  • Votes 81

@Melanie Hartmann I'm reading this a few years behind, but I absolutely love this. I would have advised against posting originally because, as you saw, most people try to discourage unconventional ideas, but I'm glad you didn't listen to them. 

10 years ago, I quit my full-time job immediately after my wife and I got married to build a software company. Her job covered our expenses. EVERYONE besides my wife discouraged me from quitting and thought I was crazy. I sold that company six years later for 7 figures. I would have never had the freedom I have now without taking that leap. 

You took a calculated risk, and you're receiving the benefits of doing so. 

The other thing that is glaring to me, that many naysayers on this forum don't realize, is that if you're building your wholesale company correctly, you're building a saleable asset. This could give you a far greater return than any real estate investment ever could. Just make sure to focus on building your systems so that the company can run in your absence. 

You can also cherry-pick the deals that make sense for your investment strategy and pay way less than other investors that buy on the market or from other wholesalers. 

Congratulations on your success! Keep pushing! 

Post: Zoning/Land Rights Attorney Needed in Raleigh-Durham area

Mike KehoePosted
  • Wholesaler
  • Chicago, IL
  • Posts 84
  • Votes 81

We’re looking for a solid zoning/land use attorney in the Raleigh-Durham area that we can build a relationship with and utilize regularly.

Does anyone have a good contact for a zoning/land use attorney or specialist that they’ve had a good experience with in Raleigh-Durham?

Post: Dropping out of High School.

Mike KehoePosted
  • Wholesaler
  • Chicago, IL
  • Posts 84
  • Votes 81

School wasn't my thing either, but dropping out of high school shouldn't be an option. Even though I got my bachelors degree, I don't think college is necessary in most cases. Completing high school is necessary in all cases. Don't shoot yourself in the foot before you even start.  

Post: Is it best to niche down, or be a generalist?

Mike KehoePosted
  • Wholesaler
  • Chicago, IL
  • Posts 84
  • Votes 81
Originally posted by @Adam Johnson:

I will chime in on the common sentiment here - I think it is better to find what you are good at and run with it.  When I started investing, I was highly focussed on fix and flip single family homes.  Turns out, I was pretty terrible at it.  During the same start-up period, I also happened to buy a couple multi-family fix and hold properties in the same are.  At the beginning, I swore up and down I didn't want to be a landlord.  It turns out I was pretty good at that and more successful.  Over the first few years, I developed the "profile" of my style - I buy distressed multi-unit properties, fix the problems, and hold them long term.  I started out 12 years ago (wish I had started sooner) and that has worked for me.  I used to buy only 2-4 family.  That evolved into a preference for 4+ units, then evolved further into a mobile home park and more recently mixed use properties.

My thought on your situation is that you are overwhelmed trying to emulate your mentor, who has also very likely evolved through his own experiences.  You will do far better to focus in the beginning, and analyze the results.  If you are consistently doing well with a particular type of investment (or location, or whatever is common among successful deals), keep doing those types of deals.  If you flop on a deal, look at why and try not to repeat it.  Not repeating it could come in the form of learning from a mistake, or by staying away from a particular kind of deal that doesn't work well for you.

Over time, you will add to your education and experience and will probably branch out into more diverse investments.  In the beginning, however, it is critical to be focused on your education and deal-making.  Some of my "best" deals ended up in a garbage can because I didn't know what I was doing and was either forced out of the deal or couldn't put the money together.  The latter was the result of much more experienced investors looking at the deal, looking at me, and simply saying no way.  Looking back, it is likely that more than one of those deals could have wiped me out.

Through the experience I have gained, I have found myself to be a patient hunter.  I run other businesses too, so I can't always devote as much time as I'd like to my investment growth.   However, I will sit and wait in the weeds for quite a while to wait for the trophy to walk into my scope rather than simply taking shots at everything that moves.  That's my style.  Other investor friends seem like they are taking down a new deal all the time, that's their style.  Develop your own and you will do well.

 Thanks for sharing your personal story. Very helpful!  

Post: Is it best to niche down, or be a generalist?

Mike KehoePosted
  • Wholesaler
  • Chicago, IL
  • Posts 84
  • Votes 81

I'm a new full-time real estate investor, and I'm having trouble figuring out my strategy. I've developed a relationship with a mentor that does new SFH/2-4 flat development, SFH/2-4 flat fix and flips, wholesaling, BRRR strategy and even some larger syndication all at the same time. In terms of location, it doesn't matter where the investment is, as long as it's in Chicago (not the south side) or the surrounding suburbs. Historically, in my past businesses, I could be caught saying "riches are in the niches", so I'm having trouble jumping on board with his strategy. While he's successful, his strategy or lack thereof seems all over the place, and a bit overwhelming to me. If it's a good deal, he'll most likely entertain it.

As a newbie, I can't tell if I'm just overwhelmed with being in a new industry, or in fact, I don't believe in his strategy and would rather niche down. 

In your opinion, is it better to specialize, or is it better to be a generalist and make money with several different real estate investment types? 

Originally posted by @Julie Kern:

Hey B-Peeps! Wanted to do a quick update after leaving my W-2 job 18 months ago today, with some reflections on what those 18 months have looked like and where I'm headed from here.

Quick background: I got started in REI a little over 4 years ago with one SFR rental in Kennesaw, GA (Cobb County, northwest Metro Atlanta). I still have that one, along with 7 others for a total of 8. My original reason for getting into real estate investing was to build a portfolio that would cash flow from now into retirement (vs. continuing to throw money at a 401K and hope for the best, which was basically my "plan" prior to real estate).

In August 2017, I left my full-time job ( of almost 20 yrs, multiple 6-figures) because I couldn't see myself sitting in front of a computer for another 20 years, withering on the vine (pretty sure that's the phrase I used with my husband every other day in the last few months before I quit ;) ).  

My plan was to do a few flips a year to supplement my husband's income and work on creating more cash flow through SFR rentals. As I was making moves to leave my job, friends that we were already lending to for their flipping business approached me about starting a wholesaling business, so that's what we did.

I bought a couple of properties in 2018 through that business and flipped them - one went great, one was a financial disaster (didn't lose money but didn't make much) but I sold it to my daughter and son-in-law and they love it, so it worked out. I also flipped one more I found outside the business and did a few JV's with my partners, so total net (pre-tax) income from flipping (not counting the wholesaling business) for 2018 was around $100K. The wholesaling business did ok also, but I can't give exact #'s until my taxes are done!

Now notice what I did NOT mention in all of this.  We didn't acquire a single rental property.  Not one, even though I had access to deals through my business.  I got completely focused on running the wholesaling business and doing TRANSACTIONS that I completely moved away from building that cash flow that was the whole reason I got into real estate in the first place.

So... at the end of 2018, my husband and I did a serious evaluation of the past 12-18 months and decided to get back to our REI roots. What does that look like?

  1. The wholesaling business is being phased out.  I was working my tail off in a business I didn't really like that much anyway, and I wasn't building wealth, I was doing transactions.  Once that decision was made at the end of 2018, I felt a huge sense of relief.  It had become my whole focus - I had effectively landed myself in another job that was a lot more work than my former one and didn't pay as well!
  2. I'll only do flips if they are light to moderate rehabs and the numbers make them a no-brainer, but I won't be aggressively looking for deals.
  3. No more SFR buy and holds. While it is certainly possible to build wealth and create cash flow with SFRs, my time frame is too short (see 4 below) to accomplish what I need to in the SFR space.
  4. So all of this led to the next logical step... multi-family investing.  My goal is to retire my husband in 4 years (he loves his job, but in the event he doesn't in 4 years, he'll have the option to leave if he wants to).  That's my why, along with being able to give freely and be a blessing to others, both financially and with our time, out of extreme gratitude for the countless ways God has chosen to bless us.  

To accomplish this goal, we'll need net cash flow of $20K/mo, but would ideally be at $30K/mo.  For 2019, our goal is to acquire at least 50 units.  In a perfect world, that's a single property (apartment, mobile home park or self-storage facility), but could be spread across 2-4 properties.  I just prefer less transactions, so the bigger the better!

My biggest advantages going forward are having a decent amount of capital to invest and knowing several folks already doing multi-family successfully who will be resources as we move through the process of identifying, evaluating, acquiring and operating multi-family properties.  

My current biggest disadvantage is battling the wrong mindset and limiting beliefs, but I'm overcoming that with education (books, podcasts and forums like BP), reaching out to brokers and lenders, marketing for off-market deals, and telling everyone I can what my goals are. Basically the same process I went through to buy that very first SFR rental property.

If you're still reading this... thanks for sticking with me!

Once I've hit that 50 units, I'll follow up with another post :)

 Love it! Thanks for sharing!

Post: What would you do if you're just starting out?

Mike KehoePosted
  • Wholesaler
  • Chicago, IL
  • Posts 84
  • Votes 81
Originally posted by @Caleb Heimsoth:

@Mike Kehoe. My advice is never post how much money you have or want to spend on a public forum

 Good call. 

Post: What would you do if you're just starting out?

Mike KehoePosted
  • Wholesaler
  • Chicago, IL
  • Posts 84
  • Votes 81
Originally posted by @David Cruice:

What you describe sounds like an excellent plan, @Mike Kehoe .  I would also recommend focusing on strengthening your personal balance sheet and income statement in preparation for starting to network with local (to where you are going to be investing) commercial lenders.  You'll need to line them up prior to getting your first commercial loan, which can be quite difficult without any prior track record.  

Hope you're enjoying the weather in the Windy City.  Keep bundled up and stay safe.  Best wishes and continued success!

Thanks, Dave. Preparing for commercial lending has been a topic that I've been thinking about. I appreciate your guidance!