All Forum Posts by: Russ Maynard

Quote from @James Wise:

Quote from @Russ Maynard:

So I just perused the 100 cash flow markets posted on BP at https://www.biggerpockets.com/...

I get that these are averages and rules of thumb are just that, but I only see 5 passing the 1% rule of thumb for RTP. What am I missing here?  I know a lot…I’m just getting started in this. How does this list that includes Los Angeles as a top 100 cash flow market narrow down my focus?  Thanks

 What you buy IN a market is so much more important that what market you buy IN.

Great point. Thank you. 

Quote from @Mike D'Arrigo:

@Russ Maynard I think what you're missing is that the 1% rule is a meaningless metric. Ask yourself what it tells you about the total return of any property. It's particularly meaningless when you've comparing different markets. A 1% price ratio in a market with high property taxes could conceivably have a lower return than something with less than a 1% ratio in a market with lower taxes. When evaluating an investment, the only things that matter are total returns from income and equity. 

Thank you. Appreciate the insight. 

Quote from @Kyle Mccaw:

@Russ Maynard check out vestmap. I use it to get a good idea of future growth and who my tenants are.

Thanks

Thank you Matthew and Aj for your responses. 

So I just perused the 100 cash flow markets posted on BP at https://www.biggerpockets.com/...

I get that these are averages and rules of thumb are just that, but I only see 5 passing the 1% rule of thumb for RTP. What am I missing here?  I know a lot…I’m just getting started in this. How does this list that includes Los Angeles as a top 100 cash flow market narrow down my focus?  Thanks

Thanks.  Why do you say recession proof?

Do you have any good websites or resources for narrowing down and identifying a new market for a long term cash flow rental property?  

How do you determine that a city isn’t largely supported by one employer which could cause a mass exodus if that employer left?  

I hear all the talk of buyers following where people leave CA for example for more business friendly states…seems like when that market is hot, purchase costs would outpace rents? Yes/No?

I know it might seem like I’m looking for a crystal ball to see in the future…if you have one I’d like to know what it is 😂 but I’d settle for any techniques that work…or don’t. Thanks

Okay, as I've watched more videos of the BP calculator, they often use a 5% figure each for CAPEX, repair and maintenance and vacancy. Obviously these are rules of thumb but in the case of a BRRR, would you estimate 5% of the sales price or ARV? Anybody have other numbers they use. Miscalculating these can turn a great deal sour in terms of cash flow.

Quote from @Bob Stevens:

Quote from @Russ Maynard:

Hi

I am new to this site and intend to finally get into real estate investing. I’d like to start with a small Single family or duplex to get the first deal going, learn something and build from there.

I understand “He who will not risk, cannot win”-John Paul Jones 

I also dealt with risk in the military and now commercial aviation. In both arenas we mitigate risk through detailed planning and great training as well as putting “handcuffs” or limits on ourselves. A new guy won’t fly into the same weather as a seasoned aviator. What are some controls you have used early on to keep yourself out of trouble?  Leverage is great when it’s working for you…how about when it’s not?

In aviation, we never put ourselves in a box where there’s only one option like having an alternate destination if the weather at our intended destination is bad. How do you structure acquisitions so that you don’t end up with nowhere to land (in real estate I guess the closest analogy would be losing the property, your investment and lowering your credit worthiness).

Thanks in advance. Sorry for the aviation analogies…it’s what I know.  My other interest of music doesn’t seem like it has a good analogy 😂

 Is there a question ? 

2 in that post but I’ve got a more direct one for you since I see you are a property manager. Have you had any clients whose property you manage who got themselves in trouble? If so, how and how would you advise them to avoid it?  Thanks in advance. 

Thanks Benjamin. Great inputs. Yeah, I’m trying to figure out the scenario where you eject or crash…cut your losses or lose it all. Leverage works going up and down but it seems like downside leverage only hurts if you can’t keep it afloat until it goes the other way or need the $ now. Inputs like yours and others is helping as I make my plan. Good idea on the checklists…