All Forum Posts by: Ray Johnson

@Ryan Nguyen One important thing is what @Frank Wong mentioned about needing to go to the property and decide for yourself since Ratings from A-F will vary by person. I'm from Southern California and when I went to Cleveland to look at a few Class A- and Class B properties, In my opinion these were Class C-, and Class D properties and neighborhoods. Another reason you will want to visit the area is because neighborhoods can be broken down into blocks as far as property class, I've seen a nice property on a nice block in a crappy neighborhood, If I had not gone to visit the property I wouldn't have seen the "Corner Boys" working two blocks away from the potential property, knowing potential renters will see these same guys working the streets I passed on the nice property on the nice block, luckily I went to see the neighborhood. 

My advice is to factor in a travel budget for your OOS properties so you can visit them before and after purchase, that's what I do.

@David Le I live in Irvine, a few blocks South off the 405fwy near Irvine Spectrum, You're not going to be able to execute your plan in South Irvine at the price point you're targeting, I think there are some options as you go North or further inland which I'm sure that's not as desirable for you. 

If you prefer to stay in South OC, Mission Viejo may be an option in the older neighborhoods away from the Lake, other options are Lake Forrest, Laguna Niguel, and maybe Aliso Viejo, the problem I'm seeing is most of these neighborhoods have seen a run-up in prices as most people that got priced out of Newport, Laguna, and South Irvine have travelled further South to these cities. 

One of my first OC properties was a Condo near South Coast Plaza which I got as a short sale, It was a two bedroom and I rented out the other room while I lived there for 16 months to satisfy the 12 month Owner Occupant period. 

As a newbie, your first property may not be in a Class A neighborhood like South Irvine if you want to be profitable on the first deal, and not prepay your cash flow by putting a very large down payment on a deal. Most recently I was looking at an REO in Placentia, that's how far inland I had to go to find something in OC that wasn't Santa Ana, or Anaheim.

@Zack Karp perfect explanation of how it works. You need to provide the Boot camp class to the BP community, as you noted many people are posting partial or wrong information. Thanks for the great information being posted.

@Jay Zoo I think you should contact your All-Star Property Manager that came with purchase number 1 from Mike. It seems like they know what they are doing and you should be able to negotiate better discounts as you list more properties with them. See what the new quote comes back at when using PM 1 for the same work your current PM is quoting you 10k on this property. Regardless the PM on this property needs to go. I don't how well it Cash flows but for Indiana, and a Turnkey property, 10k might be wiping out your cash flow for the next Three (3) years, hopefully you won't encounter anymore vacancies, evictions, or CAPEX while you try to get back to positive.

@Caleb Curry Look at it this way, Are you in a position to pay someone to live in your Austin, TX property? That's what you're suggesting, subsidizing your tenant by paying extra money out of your pocket so someone else could live in your property. 

The property should be on a 30 year mortgage, Will it cashflow if you refinanced it into a 30 year mortgage before moving? That may help you keep the property as a rental if you can get the mortgage below what it cost to rent plus expenses.

@David Lecko Congrats! A 100K property in the Class B category and meeting the 1% guideline! 

I've looked for Class A and B properties in Indiana, Ohio, Oklahoma, and Nashville, TN. but haven't been able to find anything in the metropolitan areas that meet the 1% rule or anything near it, How big in the town/population where you found your property? I'm only seeing it once I get out to the suburbs which is are areas I don't invest in. 

@Michael Ashley Your two scenarios include language like "renting above 1% rule" or "close to 1% rule", you're not clear if the properties are operating at these numbers due to your purchase positioning or if this is what they will operate at on todays market sales projections? There's a big difference for you and an investor, This will determine if someone buying today will be coming from an investor pool or an end-user Owner Occupant pool.

1) Possible scenarios not listed is you may accidently come across someone trying to place 1031 money last minute and will do the deal.

2) You have two distinct groups of property, 7 of them are Class A/B+, and 9 of them are Class B-/C, maybe you sell the B-/C properties to the investor community in bulk which would be easier if you didn't have the Class A/B- properties that won't make any investor any money, just sell the higher class 5-7 properties to OO's.

@Matt Mcnulty Josiah is doing nothing new, AstroFliping is just a marketing buzzword to get people to look at the specific technology product he's pushing, his App. Using the word "Flipping" will not get people like you to give him your email address to see the video while also building his email list, the additional step in this is getting registered users to sign up for the App. We are taught this strategy in Business school, It looks like he's either trying to get enough registered users to get Series A funding, or he's already received a small Series A fund and is now trying to beat his obligated milestones in order to get Series B funding. A typical hurdle for obtaining Series B funding is to achieve a large boost in registered users for your App.   

When I attend the larger REI conventions I see many companies pushing this concept of Wholesaling via an App or as you've been pitched to as "AstroFlipping". Most of the larger late night TV "We Buy Houses" commercial companies have all moved into this space as well, some have terrible Apps because they aren't really tech savvy and didn't want to spend the money, others really don't understand how important the algorithms are in the ingenuity of their platforms.

What he's trying to do is capture the portion of the flipping market that isn't aware of the latest use of technology products in the REI industry. There are Real Estate tech companies that have created Apps that do what traditional wholesalers use to do with Direct mail campaigns and Cold calling from list.

@Prabhjot Khinda Like @Tim G. says, you'll need to look at a more creative techniques to market.

When I attend the various REI conventions many of the companies in the Exhibit areas are Tech companies that are putting Direct Mail and Cold calling out of business with digital marketing approaches.

For me personally, Whenever I've received Direct Mail envelopes in the mail for any of my properties, I just throw them in the trash without even opening them, partly because I'm usually not selling any of my properties, and if I were to sell I know what I'm doing so a Wholesaler would never be factored into my sales channel. 

@Timothy Ryan I don't see any additional information like price, square footage, major cross streets if you don't want to list the address, etc... I own properties in the DC,VA area so I trying to assess where in Alexandria this is, near the Yellow line, King street, etc