All Forum Posts by: Steve Olson

Hi @Liz C., I still think it's a good stable deal for you :) Remember, you can always get a "better" deal if you are wiling to go to a market, source a deal through the MLS, auction, etc, hire contractors, and all that fun stuff. But if you don't have the time/know how/desire to do all that, then you have to make the personal decision on what to do with your money. What kids of investment returns are available out there? Personally I think you'll find that a good property in a good market will do well not just because of the cash flow, but the depreciation, appreciation, etc. So the "cash flow" on paper isn't the end of the story. And of course, "direct ownership" of real estate is never a totally effortless ride. As @Gaurav M. points out, you'll have maintenance, etc.  

You can always go to other markets besides Houston for a higher "return."  It's a cost benefit question and you have to go to the market that's best for you taking all these things into account.  I recommended Houston to you because you indicated you want a smooth transaction and a stable market and turnkey operator.  I can tell you the team I have you paired with there are good business people.  They do great rehabs and they run their property management professionally.  Unfortunately I can't say the same about every operator in the turnkey space.  

Anyways, you know where to find me when your'e ready to chat more.  Thanks!

Hi @Vanessa Castillo, @Account Closed is correct.  You need to figure out what the mailing address of the owner is and start sending them letters.  You may never know why it's so run down...but when they look like that at some point SOMEBODY is going to need to sell.  It could be inherited and the new owner just doesn't care, the current owner just doesn't care, etc.  Bottom line is somebody doesn't care.  I've seen investors use online background services to look for phone numbers too, if they're feeling really aggressive.  You need to just put them on a regular campaign and chat with the neighbors.  And then you need to go do this again and again because it's a numbers game.  Good luck!

Hi @David Davidenko nice to meet you.  I work in new construction 4plexes and sometimes larger in Utah, Texas, and Idaho.  Most of my clients that are international have purchased cash and then refinanced through commercial financing once the property is stabilized.  I have a commercial lender who may be able to help you.  I'm thinking that the terms should be close to Fannie Mae, but because it's a portfolio loan I don't think they'll require a US citizen as signatory.  If you'd like an intro please let me know.  Good luck!

Hi everyone, Steve Olson here and I work with Norada, who is assisting Jamie in locating investment properties.  Some great points on this thread from some people in the Memphis market I have known a long time and respect.  

@Jamie Henkin, looking forward to chatting with you more about this tomorrow.

I'll throw my hat in the ring everyone else here and say that this isn't a B class property.  Norada's website uses some 3rd party data to determine neighborhood class and it works most of the time. But in this case, it didn't, for a couple of reasons 1) @Alex Craig (while his choice in sports teams is questionable, his knowledge of Memphis and Little Rock real estate is not) made a great point about some good B class areas being just down the street.  In a midwestern market like Memphis where neighborhoods change quickly, a tool that relies exclusively on "distance" might not do the trick. You'll see some good data but it may not apply to your property (the reverse is true as well).  2) The use of "A, B, C" neighborhoods isn't always an apples to apples conversation.  There seems to be some disagreement out there about what these letters mean, yet many talk about them like they're talking about the same thing.  Many times they aren't.  In this thread however, I agree with how everyone is using them.  C neighborhoods = potential if you know what your'e doing and are on the ground...but C neighborhoods often = big problems for out of state investors who want a more hands off approach.  

It's not a perfect science, but I've noticed that in most midwestern markets like Memphis, Indianapolis, Kansas City, etc...Anything that has a true market rent of "around" $800 and below is almost definitely a "C" property.  As you move higher into the $800's and approach $1,000, you're likely in "B" territory, and as you pull away from $1,000 you're getting into the A's.  At least by my standards anyway.  This is a great way to quickly tell if there is a flaw in the data you're getting.  A property that rents for $600 a month and is an "A" area just doesn't exist.  It's a golden unicorn.  Ask whoever you're working with about it because something is just off there.  

The whole debate of "C" class properties really centers around expectations. I'll echo @Jay Hinrichs in saying that you're dealing with tenants here.  And tenants in this price range are so much more volatile than say, $1,000 a month tenants.  Out of state investors and many international can get sucked into a proforma and think they're basically buying a treasury bond with a guaranteed yield.  Sure, it's low cost and looks very attractive.  And like @Matt R. said, some savvy investors can really make these work because they have the right expectations and know how to drive these kinds of investments.  But in the end, you have a HIGH chance of getting hammered by vacancy and turnover and then...your only exit is to another investor for a huge discount...and then the whole circle of life starts over again.  @Jamie Henkin, you and I will talk tomorrow about how, given what you're trying to achieve here, a solid B class deal from somebody like @Alex Craig will be a much better choice.  Talk to you tomorrow!

Sure @Shital Thakkar. Send me a contact request with your phone/email and I'll get the info over to you.  

@Tyron McDaniel...interesting you should bring this up.  I work with a builder here in Utah that has completed 10 brand new 4plex developments over the last few years.  We expanded into TX and just sold out of our first project in NW Houston...right off of Mills Rd.  That's comprised of 10 new construction 4plexes that we manage.  We're in the process of locking up land for a larger development of new 4plexes in Katy.  Message me if you'd like details.  We just finished all the prelim info on tax, rental, vacancy and have a pretty solid proforma put together.  

Sounds great @Tony Castronovo.  Shoot me a colleague request with your email and I'll get you the info.  

Hi @Chuong Pham I have a great attorney/cpa I've used.  He's not based in Dallas but does this nationwide (I've put many clients into TX that he has helped with asset protection on).  Message me if you'd like his info.  

Hi @Lee Marsteller I have one I can send you for some mixed used properties I do here in Utah.  Send me a contact request and I can get it over to you.  

Hi @Roberto Costa, i'm not positive on this, but if the purchase price and ARV is legit, a conventional lender may be willing to do the financing for you to minimize your cash out of pocket. I have some clients that do this on single family. Buy it for 75% of appraised with hard money, conventional lender is willing to refinance them out with now down payment because the 25% equity spread is already there. You would still have to pay the closing costs on the hard money and conventional closings, but it could minimize or maybe even eliminate the 25% down payment.