All Forum Posts by: Ray Johnson

@Eric Carr I think it's the property holding pattern while gambling on the hopes of that long-term equity growth is the problem for many people. 

I saw a lot of growth in Inglewood, Hawthorne, and the DTLA stadium radius from 2012-2017, last year the potential profit numbers were really small or non-existent as a lot of properties have been exchanging hands, some multiple times on the same property (someone buying a flip where values move-up so quickly they then flipped it again without doing any additional work), similar to what was happening before the last downturn. 

Even the Wholesale deals I'm seeing in the area aren't good for flips, Buy-and-Hold maybe but nothing more.

Are you still seeing any meaningful profitable deals or is it all negative cash flow and hopes and prayers on equity growth?

@Clifford Paul It's clear you know what you're doing. Most of the newbies that make these post aren't really investing, most are prepaying some cash flow, and hoping the deal works out as a long-term hold.  

The number of doors is a Guru tactic to excite the masses, draw crowds, and get the inexperienced to buy products like a 20 Unit building for $180,000 - $200,000 in a Class D neighborhood in Cleveland as their first deal.

Unfortunately you're probably right, they will probably continue to post the number of doors as the main highlight to hide the fact that they aren't buying sound investments. 

@Alan Feldman Thanks Alan! Hopefully this will become the norm.

My goal for 2019 is to get the Bigger Pockets community to change the way we post multifamily successes. Instead of being heavily focused on the number of doors, I'd like to ask the posters to become more focused on actual Net dollar amounts, IRR, or some other statistic that would be of good value to investors.

In 2018 there were 100’s if not 1,000’s of post along the lines of:

1) I just closed my first deal, 20 Doors in the Hough district of Cleveland (or some other neighborhood) It's a great deal.

2) What’s the best way to get to 100 doors quickly? I see a variety of this question every few days

3) My goal for 2019 is to get 400 doors (no associated Net cash flow dollar amount for those 400 doors, I guess they just want to get the 400 doors, doesn’t matter if those 400 doors lose $100 a month or make $1 per month) just get the 400 doors. 

4) Grant Cardone says getting as many doors as fast as possible is the only way to invest or you're wasting your time, How do I get a lot of doors quickly (No Net dollar metrics asked in many post like these, just how do I get a lot of doors quickly is the main question asked)

5) I just closed on an owner finance deal of 80 doors, It’s 20% occupied and I have 5 years before the balloon payment or refi takes place, I’m going to rehab all 80 units and raise rents to market rent levels. No info on how the transition takes place, what the hurdles are during the 5 year period, repositioning targets, etc..

The one thing all of these post have in common is they mention the number of doors on deals and never mention actual Net cash flow dollars, profit amounts per door, or deal strategy, some will post Gross dollars per door but that has zero value for any real insight in my opinion, we all know it's not how much you make it's how much you keep.

In my interactions with wealthy Real Estate investors, when talking about multifamily apartment deals, they discuss acquisition goals and projections in dollar value and/or IRR not the number of doors as the highlight of the deal.

I’d like to ask if the BP community will help change this Guru imbedded mindset about the number of Doors being the measurement of success. If you're going to use Doors as your main posting point, maybe you can do something along the lines of 80 Doors at $220 Net cash flow per door, or 80 Doors at $211,200 annual Net cash flow, or 80 Unit apartment deal at 16% IRR with exit on year 7.

In 2019 we need to raise the bar on some of these post to make them meaningful to everyone at all investor levels of the BP community not just clickbait for the newbies. 

@Eric Geers Welcome to BP Eric! I live in Irvine as well near Irvine Spectrum.

I've looked at the Midwest and other Out Of State locations, IN. OH, TN, OK, VA, MD, and DC. With the exception of DC and VA I haven't been able to find any solid overall investments.

I'm seeing some Cash flow opportunities but they don't fit my criteria because they're in Class C- D neighborhoods which I don't invest in. If you're from the IN area you may have better luck finding deals because you'll know the neighborhoods better.

@Mindy Jensen I uninstalled the version I had and downloaded the latest version from the Google play store then noticed the same issues with my latest post, I then looked at the date of the most recent update and it's August 2018, Am I correct in assuming there isn't an update on the Google play store platform yet?

@Josue Vargas This is very true. This past summer my friend Monica receive the family home she grew up in, her parents purchased it in 1973 for $82,000 here in Newport Beach, CA, it's now worth $2.1 Million with no mortgage on it. One of the things I have done is buy a Class A new construction property in a similar scenario for my now 7 month old to have at some point in her life. I will keep as a rental until it is turned over to her in the future.

@Jaron Walling I agree, Millineals will start to buy homes in larger numbers once social media tells them to do it, sad but true. I will add that I do see a divide in the Millineals where the more financially successful ones tend to spend less time on non-business related social mostly focusing on the use of social media to enhance their lives.

@Llewelyn A. Great post! @Account Closed mentioned about property types, Those $30,000 Duplexes in Cleveland won't need an IRR template but the property in Brooklyn, NY or South Orange County, CA will.

@Christopher Lane Unfortunately it sounds like your wife sees you as a financial failure and doesn't want to risk losing any more household money, The good news is you can change this.

Does she understand you failed at the Salesperson job because you had no passion for it and didn't really want to do it?   

Maybe the middle ground would be getting a statement from one of her stock or 401K portfolios (safe investments in her eyes) show the annual return, and break in down to monthly, it will probably be around the same $300-$400 per month she's mentioning to you about your RE investment strategy, then explain the various Tax advantages on top of the real estate similar gain. While neither Stocks or Real Estate investing is clearly better than the other, the goal is to get her on the investment diversity roadmap.

Next you ease her into investing with a Class B/B+ property that will be safer, a little less cash flow money coming in but it will show her that it's not going to be taking your time away from the upcoming baby and family time. Make sure she knows your stories of collecting rent with your Dad, mowing lawns, etc.. are a thing of the past and in your vision of 2019 investing, property managers and online deposits will be happening. Looking at her comment about you chasing $400 and headaches means she see's old school landlording or Class C- and Class D landlord which is a headache unless you are familiar with this specialized property class.

Start with something that resembles what she's use to, less work, less hands-on involvement, yet comes close to what she's seeing in her stocks on a monthly basis.

Lastly I would ask her to do a mock REI portfolio with you, find a property online, if needed do a mock rehab on it, rent it out at conservative rental rates etc... maybe this will let her see that you know what you're doing without initially taking the investment risk, just be conservative on this because if your Mock portfolio fails it's over getting her to say yes.