All Forum Posts by: Ramsey Blankenship

@Ryan Fox thank you. That was a great read and very helpful

My partner and I are multi-family investors who live in areas where investing is difficult. After conducting some market research, we have narrowed our search to 3 cities each. Now it is time to understand the neighborhoods of each city.

Any investors/agents/managers in Kansas City, Mo. familiar with the area willing to share an area overview?

Kansas City has shown great population growth, job growth, median HH income growth, and crime is on a downward trend. It appears to be affordable however I am unfamiliar with the area and need help identifying the specific neighborhoods to avoid.

Thanks in advance!

Ramsey

thank you guys for your responses. I am building a spreadsheet over over 50 cities and am not concerned about the details of either at this point.  My question is only about the understanding the relationship (at large) between Median HH Income and Median Home Price. 

For example, some markets show Median Home Prices 6-8 times higher than the Median Income and I can tell it will generally be hard to find cashflow, the opposite is true for equity. 

The best answer I have heard was people can generally afford 3-4 times their annual salary. This helps me understand If a market is more stable (again, speaking generally).

if there is anyone who looks at this data and knows how to understand it - please - let me know

What is the happy medium for me as in an investor in regards to a city's affordability for its tenants.

For instance - Austin, Tx. has steady increases in job growth, substantially increasing the population, raising the median household income, ultimately driving up the median home prices 61% over the last 16 years.  What does this mean for me - The city of Austin. Tx is doing amazing! - So amazing, it's unaffordable :(

Cities such as Shreveport, La. and Montgomery, Al. have decreased their population over the past 16 years, having the opposite effect making homeownership affordable for its tenants. What this means for me - Affordable properties with high vacancy rates :(

So - What is the happy medium? If I find a city with a healthy increase in job growth, population, and median household income - how can I understand if it will likely be a rental market which will cash flow.

Please note that I understand picking up the phone and calling professionals in the area is the best way to get the ground truth.  I am trying to understand data and trends from a Macro perspective. 

Ramsey

Hit up @Cain McNeil for real estate listings and @Nicole Ludwig for short term management if that is the route you are wanting. 

I am a San Diego resident and own 12 rental units in PC. They take care of me

Ramsey

At the moment I am not interested in fix and flips Of single family homes, however I like the idea of pooling together investor money to purchase an apartment complex of 10-30 units, raising the tenant class through renovations and amenaties. Increasing the NOI, and refinancing to pull out the initial invesment. EssentIlly doing a BRRRR on apartments. My goal would be to own the asset outright after the project is complete and have investors paid back with interest and a kicker if possible. I have experience doing this to an apartment however I completely funded the down payment, renovation expenses, and did the work myself. I want to raise capital to do larger projects and hire professionals to do the renovations.

Me funding the projects myself limits my buying power, which limits the number of units, ultimately limiting the projects return.

I am trying to learn how to raise capital. More so, I am trying to learn how to structure a deal so that I am not married to another investor for 15-30 years. I am a military man and many of my friends out here in San Diego have a respectable amount of capital saved up ($50k-$100K range) and they tell me "Ramsey, hopefully one day you will let us get in on a real estate deal with you." I do want to involve them however I am unsure of how to put THIER capital to work without being on a long term mortgage with them.   I understand the broad stroke differences between a Joint Venture (Partners own a percentage of the property) and a General Partnership (Investors provide private money loans at a locked in rate of return) however I am looking for exit strategies.  What is common for either strategy. 

Surely investors do not want to lock in their capital for 15-30 years. Should I be raising capital only to fund MY deals and eventually refinance to provide my investors an Exit - leaving me with the property. 

Should I raise capital to buy a performing asset in which I provide partners with a long term investment in which they own completely and I am compensated for structuring the deal as a general partner? 

Please post replies below however I want to jump on a call with someone who has done this before.

Thanks in advance! 

Ramsey

@Karen Johnson, please do.

Our property is in the Highlands area. As stated in the OP, Shreveport can be block by block and sometimes building by building. We are aware of this. Our property is nothing exceptional and we do not intend on making it the best property on the street. We are simply doing cosmetic renovations that will attract better tenants that the current layout. We want to divorce it from tenants who get by on government subsidy, and attract the working, lower middle class tenant. We have no disillusions of these units being luxury condos - however clean, affordable housing is the end goal.

@Andrew Jacoby, discuss with your bank if the seasoning period is even mandatory. You being a new investor, it very well be a mandated policy by the bank however I have discussed with my banker in Florida, and he explained to me that this is simply common practice however there was nothing in writing that mandated a seasoning period and he, as a senior loan officer could make the decision to refinance once he recognized the property was stable enough to handle the higher mortgage from the refinance. 

In my situation, I had owned the property for over a year however I was consistently raising the rents as I renovated each unit (multi family - 7 units). Once I finalized the last unit, I immediately refinanced at an appraisal which was based on the final income. keep in mind, the property had only been producing its highest yield for 1 month and my banker was happy to refinance.

Ramsey 

I live in San Diego, Ca. which is one of the few markets it is cheaper to rent than to own. If you can save $500 p/month by renting, and repairs/maintenance/management is handled by your landlord - you can stack up some great cash for investing in markets that will produce an actual cashflow. Cashflow is king when you are getting started as most young investors can not afford to let their money sit stagnant for prolonged periods of time.