All Forum Posts by: Ron Flatt

IMO-  I noticed you are in Florida,  so is it close enough, that you have other property in the area that it can use the same property management company or close enough for you to self manage.  I enjoy the small markets but there are some that I stay out of.  Is there jobs, or do they have to drive a distance to work?  No Job, community getting smaller,  probably going to turn into a Section 8 property, that I do not invest in.  

I would want it to be well over a 10 cap and still would wind up passing on it.

For what you are buying the M2M is great.  I currently negative cash flow $500 per month.  However, If you start with a vacancy or you go up and some leave.  You will have empty units to repair.  

I really like to do one building at a time.  Offer it to current tenants at the new rate on a lease and then move to the next unit.  

This does several items:

1)  Your buildings are not vacant (which in some areas can lead to vandalism, and problems getting insurance.

2)  The building are paying something until you get to the updates you wish to make. 

3)  You will have some vacancies just naturally occur, which gives you the next one to fix.

4)  The tenants see the improvements you are making, some will want to stay.  Since they are on a M2M, you will see their pay history (for real) and see if they are willing to stay with increased rents.  

5)  Once you have 3-4 of these duplexes completed, you will not be in the red and slowly building towards a great cash flow.  

I try to avoid negative cash flow properties, but if the deal is right and it is only for a very short amount of time I will consider it. 

I have not listened to BP 221 yet,  I am on 123, going thru each one.  Usually no money down, is not your money down.  I have always had to find money to put in the deal, sometimes it was borrowed or partner money.  

My daughter lives in Converse.  I helped her buy her home there.  I think you can find a better deal.  I am not a fan of "alligators"(negative cash flow).  A bad renter, a large capital expenditure will put you in a rough place.  Remember Murphy's Law,  when you least can afford it, is the exact time something happens.  

Others who live there may have a different  idea, but with the numbers you gave, it would be a pass for me.  There are many homes that will give you a better return.  

If you can swing a loan yourself, and could get a short-sale, it might make sense.  Hope that helps.  Short-sales can take a long time to close.

I have been in the rentals since 2001.  I have always dappled in Real Estate, but got serious in 2002.  My two brothers was watching what I was doing with tax sale properties and wanted in.  We formed a S-corp and let it build.  We now have a nice base of rentals, We have some notes that we are owner financing, We also have done a few flips, and have several properties, mainly raw land for sale.  Feel free to follow me or connect with me.  I am always looking for someone to bounce ideas off of and let them do the same.  

Outskirts of DFW can be very lucrative.  I am south of DFW and stay within 35 mile radius of my home.  

I like Cleburne, Burleson, Waxahachie (seems to be a little high).  I like little bedroom communities for cash flow, the appreciation may be slower, but I would prefer 10 -  $50k houses over 5- $100K houses.  

• I am the odd ball in the lot.  I will rent to a person with an eviction, but let me qualify.  
• I increase the deposit by 50%
• the eviction has to be older than 3 years
• their current employment has to be more than 2 years.
• Very few can meet all of these, but I do have 2 that are great renters for me.

welcome to BP

first off welcome to BP.  Second, I would invest closer to home if I were you.  You are in a great area between McKinney and Greenville.  I do not know the amount of your inheritance but if you take your time you will find some great deals within a 50 mile radius.  I limit my area to 35 miles of either my brothers residence or my own.  There are more deals than I have money or time to track down.  

It was pointed out, that DFW is increasing in price rapidly, you are close enough that you will be picking up that appreciation also.  I am south of DFW and have noticed it. 

Howdy Sean,  I am an old hand on rentals and owner financing, but I am still learning.  I am fairly new to BP myself, that my son got me associated with.  I am working my way through the podcast and I am up to podcast 123.  

I welcome any questions or bounce ideas off.  Good luck and good investing.