All Forum Posts by: Paul Wurster

@Rick L. 

That is the same trailer I have.  I use my 98 toyota RAV4 as the tow vehicle.  It has a small 4 banger so I think almost any vehicle could tow it.  I've had lots of wood on it, a scrapped metal shed, and the Atticat machine with 12 bales of insulation on it at different times.  It was a good trailer.  The folding thing annoying, but it works.  

There is one in Montgomery that I used to go to.  

I would want to see your projected returns.  What are your price points?  

This neighborhood exists already, and it is called Deer Creek.  Are you planning on replicating that in Pike Road nearer to the new schools?

How would you add value to the market?  Can you solve the problems you stated?  I agree that it is primarily about the schools in Montgomery, but it is starting to get to be about the drive too.  I don't want to go farther than exit 11 personally, but this is a subjective thing.  

I just graduated from the last ACSC class.  The reason people live in Deer Creek is because people lived there last year.  It is the only name you hear.  I think you would have to duplicate something similar with all of the accouterments that go along.  

For me, the investment opportunity is difficult in Deer Creek because you cannot get a great price compared to the rent.  It would fall below the 1% rule most of the time in a town where you can find properties that meet the 2% rule.  

Those are the kinds of questions that I would like to see answered.  These would be A class investment properties, and they have their place.  Most of the people on BP are probably looking for B and C class properties so I think you are going to have to convince me why and how your development would be better than existing home stock.  

Good luck.  It sounds like an interesting project.  

No problem. I can't get this kind of discussion anywhere else. It is something to think about. In my type of buy and hold investing, I cannot figure out why CAP rate would ever be useful to me which is why I focus on cash on cash return. The 50% rule is a great guideline to price in future cap ex. I actually have a worksheet from a book that I got in the 90's that helps you break out and amortize expenses like a roof or an AC unit over a ten year period. I think that is just a long form of the 50% rule.

 David,

I once took an investment class that flipped a common financial planning rule around.  We commonly see the investment calculators that calculate how much money you will have at age 65 if you put in X amount and earn a (completely BS) average market return of 12%.  You know the one that is on Fidelity or Vanguard's site.  Well, what if you determined what you needed and then solved for the rate of return?  This is much more difficult for a financial planner to do, and it is even harder to provide you with above stock market rates of return; however, I think this is the key.  Hidden in the J. Scott vs. Bob Bowling glossary war of mid-2014 is the idea of cash on cash rate of return.  How much is your invested amount making you is the real goal you need to look at.  If you can figure this out, then you compare multiple investments.  If you need 6% to get to your goal, but 6% yielding assets.  If you need 20%, buy those.  Most of us BP kids like real estate a lot.  However, there is such a range of returns out there due to different markets and techniques.  J. Scott is no amateur so he his advice and plan on those capital requirements coming in the future.  If you can structure your investment while planning on this factor, you will be successful for a long time and not just the next few years.  Ultimately, that is what we are all doing this for isn't it?

Aaron,

Welcome to BP.  I'm in escrow right now selling my only property in CA.  Most of my properties are in Alabama.  I love it there.  

I hear Atlanta and Memphis are great too.

P.S. We are trying to leave Alabama as a well kept secret.

Owner finance or rent?

What is your goal?  

Talk to your closing attorney.  It was well worth our time and money to ask questions of our lawyer when we were doing closings.  She would grab examples and show us what was required.  We offered to pay for her time, but she never charged us.  It was extremely worthwhile.  

It should be a month to a month and a half.  Make your offer contingent on them being evicted.  It will be much easier for the original owner to get them out.