All Forum Posts by: Phyo Ko

Congrats on passing the exam.

Where are you stationed now and do you plan to stay there when you finish your commitment?

We have a new Military Division at KW to help give you a network and make the transition.

@Phyo Ko Training and opportunity to learn is the most important thing for a new agent. I would not concern myself with the split right off the bat. Spend your first year learning and being a sponge and the checks will come. Interview all your local brokerages and ask what kind of training they offer and see what kind of culture they have in their office (is it cut throat? Or is everyone out to help each other?)

Welcome to life as an agent!

I’m rather new myself, but my decision for choosing a brokerage largely came from what I needed now.

I’m active duty Air Force (final assignment before retirement as well 😉) and found that many brick and mortal brokerages wouldn’t work for me. I found a great cloud-based brokerage that will allow me to train without physically being in the office taking leave from my military position.

I think about finding a brokerage like going shoe shopping. What works for you today, may not work tomorrow. Make the best decision for you today. If you find it doesn’t work, make the best decision that day. There’s so many options otherwise that will keep your head spinning.

Lastly, remember that you are interviewing the brokerages not the other way around. Be yourself and go in with what you are looking for. I had three things, but they changed as I visited more brokerages and narrowed down what I really wanted.

@Phyo Ko - Hi, and congrats!

When you look for a team/broker (which area are you?) It's easy to go with a big name, KW, compass, Coldwell etc, but if you jump on a team the biggest thing for me is looking at the splits they offer.  That being said, being on a team can be a real jump start to get the experience you need.  I joined a local broker when I first started, I interviewed at the big ones, but ultimately I connected with a broker that was very hands on.  She provided a boot camp all new agents went through, not only that but she conducts the whole boot camp herself to make sure agents are taught the right way from day one.  Sadly nothing in the exam teaches you to become and agent.  If you find a broker that has some kind of mentorship within, say with an experienced agent and they take a small percentage of your first deals, I would always go with that now versus a big team... There's experience to be found in both sides, if your confident in yourself to go out there and find leads, then it becomes about focusing on a niche, your local farm, a particular type of lead, vacants, out of state owners, pre-foreclosures etc and learn how to drive leads.  Sad to say it's a tough market right now, but using your military connections can be a great way.  I took a military relocation program certification to specific help those that needed to relocate fast.  

@Phyo Ko what @Jaron Walling said is 100% correct.  Yes, doing your own PM is intimidating at first. However, getting PM experience is a fundamental piece of becoming a successful RE investor. Even if you have PMs working for you, YOU still need to know the basics of property management so you can effectively manage those PMs. 

Owning a portfolio of PM-managed properties without any personal experience in PM is a bit like trying to manage a mechanic's shop with zero experience fixing cars, or trying to manage a law office with no legal experience.

Good luck, and let us know how things turn out! 

Don't be scared of doing the PM yourself..... its not that hard when 95% of the time everything is on cruise control. That 5% of the time where its "hard"...... like an eviction....... you can hire a pro to handle that part. You can learn to screen and select tenants..... find people to fix issues if you cant fix them yourselves...... its a challenge and a learning curve, but its not that hard most of the time, especially if you are in B and A class units.....C/D is a whole other game....

When you are killing it and your time is worth more than the 8% to hire out, then you turn it over to a pro PM...for now, do it yourself.

San Diego and most of CA is a different game..... I bet most of the "sell and get out" crowd doesnt play in CA let alone SD. 

I have faith, in the long term, in imperial beach RE market.  It is the cheapest beach community in the US for 100s of miles.  If the water pollution issue can get resolved, and it has never been closer to being resolved, that would go a long way in helping IB’s RE prices.  

You would take a beating selling now. 

Beach cities have finite properties.   long term, I believe IB will out perform the general San Diego RE market.  I expect long term the general San Diego market to do great so outperforming it would be real great.  

When my mom was purchasing her first rental property (late 1970s) we had very little money. Her final 2 choices consisted of a thrashed property about 100’ from the beach in IB.  Across the street from it was a MF that had obvious drug sales occurring.  The 2nd choice was a less thrashed property in Chula Vista on a more quiet street.  My brother and I (my brother was pre-teen and I was barely teenage) did not understand the value of the beach properties.  We advocated for the Chula Vista property which is what she purchased. Knowing what I know now, I wish we had purchased the IB property.  Beach in So Cal is that desirable.  

I have faith that your property will do great as a long term hold.  It will start with poor cash flow, but quickly improve.   the rents will increase 10% the first year (virtual guarantee) which will improve the negative cash flow a lot   

Good luck

A couple of things:

1. You are not alone. We have all had challenges in this and you should be proud of what you have accomplished. People who love to own property but can't for a variety of reasons. Take a second, breathe, and write down how this experience has made you better in the long run.

2. Have you explored renting by the room, vacation rental, traveling nurses, rent for filming, etc. to increase cash flow?

3. I know it was mentioned earlier, but you really need to have the conversation with your CPA. You may make up some of those loses in tax savings.

4. This might be a long shot but have you considered moving into the duplex? By doing this, you could refinance into a lower, owner occupied rate. Maybe your existing residence can become your new rental.

5. Can you offer any other services at the duplex to increase cash flow? For example charging a utility fee for the water or providing coin operated laundry.

6. Can you bring in a business partner? They can help you in recouping costs and you split the property management work. It can get messy but just something to think about.

I had gone way too deep on a property before. My wife and I ended with over $100K in credit card debt, plus stress. We ended up moving into the second unit, which was a 360 square foot ADU and rented the main house. After two years, we refinanced twice and moved into the main house. Now we could move out and this would cash flow. It just takes time.

As Brandon Turner said on one of the podcasts, "Real Estate is very Forgiving." 

@Phyo Ko as @Barry O. mentioned, renting it by the room can often greatly improve your numbers (but, it also increases your work).

You can also usually get more if it as a STR or MTR, but that's even more work....

What do your numbers look like if you self-manage it as a LTR, and what do your numbers look like if you self-manage it as a rent by the room?

At the end of the day, it sounds like you were way off on your original analysis of the property, which often means that the only way to salvage it is to put in some work (and frankly, I'd say that anyone who wants to be a real estate investor needs to put in some time self-managing their properties and learning from that experience before handing it off to a PM...so, if self-managing this thing makes it salvageable, I'd say that's a blessing in disguise).

Regardless of what you decide to do with the property, take this situation as an opportunity to LEARN, because there are a LOT of valuable lessons here...

Good luck out there!

I have to look at the number but just with a brief estimate it looks good. Save 8% on management and with each room about 1.2 - 1.5 that would 8-9k which would cover mortgage