All Forum Posts by: Robert Rixer

As others have said, very important to look closely at the HOA. A poorly run HOA can devalue even the nicest of properties. You can suggest to set aside money for CapEx items but they get capitalized in the value of the home i.e. A brand new furnace will, in theory, raise the value of the home by the cost a brand new furnace.

You're conflating CapEx and maintenance in a couple of these which makes a difference when it comes to underwriting deals.

Why house hack? The ideal investment and ideal place to live are rarely the same place. If purchase price doesn't make sense in San Diego, rent there and save the money to invest in a market you know and works out on paper. 

Closings on commercial and otherwise larger deals are rarely ever done in person. I haven't been to a closing in nearly a decade. It's more to do with convenience as buyers and sellers on larger/commercial deals are often not located in the same state. As long as you have a proper representation, it should not be a concern.

Don't do it. I know this exact model and have seen it from a number of Gurus. They are not outright scams and people do some deals but you almost certainly would have been better off saving the money and profits and doing it yourself.

They call the up front fee your "skin in the game". Years ago when I was considering this, I asked them if they provide capital, sign on the loans or otherwise put up any risk? No, No, No. Ironic considering they were pitching me to have skin in the game by paying their fee.

You won't hear a ton of bad reviews on these guys, mostly because they hold you to confidentiality once you sign on and most people are probably too embarrassed to say they got hoodwinked.

A number of reasons that others have mentioned. The more common one I'm seeing is just pure speculation that the value will continue skyward in the future. Buying a SFH to live in doesn't cashflow at all but if you think the house will be worth 3x in 15 years then it's a no brainer. This same logic has been extending toward multifamily.

A lot of multifamily's especially larger ones will transact outside of the MLS. Check Crexi and Loopnet as a start. A lot of commercial/multifamily brokerages will only advertise their listings on their own website so identify who these prominent multifamily brokerages are in your area and subscribe to their email list or just check their inventory periodically. That's a good start.

I've had this before with in-place rents at $800 and market rents at $1200. Raised rents on existing tenants to $1150, a little below market. Some got mad and threatened to leave but when they had a look at the market they decided $1150 was still a good deal. Those that couldn't afford it, left but those tenants would not have been viable long term tenants anyway.

Quote from @John Michaels:

Quote from @Robert Rixer:

You have to be careful with these lists. If rents are high compared to sales price, then you have to ask - why aren't these renters buying? The answer is usually due to no savings, poor credit score, lower income, etc. If this is your tenant base then your rent roll may be high but your probability of actually collecting that rent roll number is low.

 That's a good point but isn't the main reason people rent vs not buying a lot of the time is because they don't have the down payment?

Yes, as I said, no savings (or saving ability). The highest median sales price on that list was Lubbock, Texas at $156,000. You can put as little as 3.5% as your down payment. You're telling me that someone can't scrape together $5,460 to own their own home and be in a better financial position than renting? Again, that's the kind of tenant base you will be dealing with.

Do you have a link to it?