All Forum Posts by: Raky Patel

I had a house here in Houston that I would consider A-/B+ (prob more B+). It appreciated significantly and I sold to lock in the gains. I barely made any positive cash flow but came way ahead from an appreciation standpoint. While this worked out great for me, my strategy going forward is not to count on appreciation. I am now in the process of buying homes in other markets that will likely be C class neighborhoods. My focus at this point is cash flow. I figure after 7 years I will have made 2.5x my initial leveraged investment from both positive cash flow and principle paydown. All properties I acquire have property management in place so I am not dealing with the bulk of the issues, so really the return is all that matters to some degree. I am concerned about an exit strategy but by investing in cheaper markets I think my downside risk is somewhat limited and even if I sell near what I bought it for 7-10 years later, I am still making a healthy profit. 

I think that Houston is a sellers market right now. The outlook looks pretty good as we have a diversified economic base. There is not much inventory. The issue I have is that the home prices have increased dramatically over the last few years that it is hard to find a good deal. I see wholesalers send out "deals" that need $20k+ rehab priced at 90% LTV on a $100k house. That being said, if you look hard enough you can find a decent enough deal. I actually just sold my rental here in Houston after pretty significant appreciation and will use the proceeds to buy at least 3 houses in another market. My thought is that if the market turns I don't want to be the sucker that bought in at the top. Obviously nobody can predict the future but I think that Houston will continue to grow over the next 2-3 years but not at the same pace as other markets. That said, if I found the right deal in the right area, I would consider buying here. I chat with some of my friends here and the consensus is that this actually would be an ideal market to flip in if you had the infrastructure set up to do so.

Hey y'all, can anyone recommend an appraisal company in Cleveland, OH? I am looking to acquire several properties over the coming months and am working on building a team. As I am not boots on the ground I think it is prudent to have an unbiased opinion. I know banks typically provide an appraiser but in this case I am also examining the possibility of owner financing and would like to have more options. Thanks, Raky

Low expense ratio (under or around 1%). I would review the summary of each of the funds you are considering to see their top holdings. The funds within your plan are likely comprised of different sectors - Large Cap, Mid Cap, Small Cap, World Stock, Specialty, Target Date Funds, etc... Select which ones interest you and you believe are poised for a return that meets your risk tolerance. Remember past performance is not a predictor of future performance.

I would say that it depends on the asset class and the days on market for comparables. I would rather be priced slightly less than market and have a quick turnaround time. Vacancy is a killer. If you have several applications you can be selective.

This is an interesting topic. I was having coffee with a couple friends a little while ago and we discussed vacation rentals. The returns can be better but in a place like Galveston would likely be cyclical as most people tend not to head there for a vacation during the colder months. You also have to factor in make ready each time the short term renters leave. I think Sun and Sands is a property management company that can do that. I am also interested in Galveston, but more so the idea of buying a beach/summer house for my family. I am waiting for the next downturn though as I am in no rush. 

I was just thinking about this on the way to work today. For me personally I plan on acquiring 10 houses as quickly as possible. From there I will use the cash flow from each to pay off one house. I will then get acquire another leveraged property. Rinse and repeat. Essentially I would like to build a stream of $20k/month. I will eventually get into multifamily as well. Not sure as to the number of units my plan will take/what my plans will be at that point in time, but that is my goal for now... I have been known to change my mind. :) I suspect in the vicinity of 30 paid in full units.

I think if you can afford to not live off the cashflow, it would be wise to use it as a tool to expand your real estate business. Figure out when you want to retire and plan around that. For me, I am 34 right now and would like to be retired around 50. 

I am a basic member of Lifestyles. I honestly think that for true beginners they have a good program to teach you the basics. I knew the bulk of what they teach going in but I learned thru reading different books, searching BP, and my own personal experiences. A good friend of mine joined Lifestyles at the same time I did. His eyes really opened up and he was able to take action right away. I would say the biggest benefit to Lifestyles is they have a model that you follow with all the infrastructure built in to support you:

1. Will teach you how to locate ideal investment property 

2. Will teach you to run the numbers

3. Will provide you with connections for hard money loans, contractors to do rehabs, and property management if you choose to go that route.

Ultimately it is up to you to decide what you need. You can find deals yourself and honestly you can probably find a cheaper contractor than the ones they suggest. My thought in joining was that it is good to surround yourself with like minded people. That said, I will likely not renew my membership unless I plan on going the multifamily route. 

I would caution anyone to really understand all the costs associated with buying a rental property. Some of the examples they provide are best case scenarios which may not be applicable in the current state of the Texas market. 

Thanks guys, you are all awesome! I think there is a good chance of me buying in Ohio now :). I was just concerned that taxes would be something like $10k for a $50k property because my other income earned in Texas would be counted... That appears to not be the case. 

Hey y'all, I am considering buying out of state in a market that has state income taxes. I live in Texas where we do not have state income taxes. In this case, how does that work? It is my understanding that profit made from an investment out of state will be subject to state income taxes. Just for the sake of numbers lets say I make $100k/year here in Houston. If I buy a property in Ohio and profit $3k on it, am I only taxed on the $1500 (factoring in $1500 depreciation: 3k-1500)? Do they use my total income earned from out of state and in Ohio to determine the basis for my tax (could be a difference of .5% and 5%)? I just need to better understand the tax impacts you guys are having for investing out of state. If anybody invests in Ohio, I would love to hear from you with regards to the state income taxes you pay. Sorry if this email is confusing, I have a bunch of thoughts in my mind...