All Forum Posts by: Ryan Blake

Hi Drew!

I hope you are able to get to $1m net worth much quicker than I did. It took me until I was 37. I tried to answer some of the questions that I have some experience with:

When buying a property for a low value ex: a duplex in Cisco TX for 95k and probably cheaper. Does that have increased risk?

I don't think the value comes into play with the risk. It is more about the location. Cisco is a small town over an hour away from a city with 100,000+ population. Not saying it won't be a good deal but you have to know that vacancies can last longer the lower the population. It will ultimately be based on the supply and demand of the area but you have to keep an eye on the total renter pool as well. You also want to keep in mind a exit strategy. It could take longer to sell when you are ready to move on to a bigger / better project.

I have about 25000 saved up and I'm living at home for free how much of that should I spend on a property or save.

You will always want to spend a little as possible. But you also want to make sure you have enough left over to make sure you have some holding costs should things not go as planned. You don't want to get yourself into a bind on your first property. I would say you want to keep your cash to close to $15k or less so you have a little bit of runway if it takes some time to get it rented.

How does someone truly manage a property "effectively" from a distance?

I would highly suggest you do not start remote for your first deal. Specifically as remote as Cisco. It is a 2 hour drive from the nearest commercial airport. I think there is a valid time to invest remotely but I will be honest, I have never done this so take my advice on this for what it is worth. I would say you will want a local property management company if you plan to be remote.

How do I find new expanding and promising areas?

Follow the money. Where are locations that are getting big investments. Where are areas that have a diversified economy? Where are areas that are growing? Those are good questions to research when looking for good investing areas.

Hope my answers help at least a little.

Welcome! Wish you luck. BP is a great resource. Reach out to people. I have found many people on here are willing to answer questions and share their time. We have all had people help us find the success we have had and are willing to pass along the info we have picked up.

Southern Cali style homes are on the rise in DFW. Specifically the modern style with white stucco walls. Just 10 years ago you would never see a stucco home in the metroplex.

I have some friends that do higher end homes in the North Dallas area. Would be willing to make some introductions when you get out here. One focuses on the $1m to 1.5m range and another only works with homes in the $2m+ range.

You should share some pictures of the homes you have built.

I have been investing for awhile but have only recently started picking up properties that I know will not cashflow because of the prices in the area I invest (Dallas/Fort Worth) and the higher rates.

I am still picking them up because it will still pay down debt and provide me with depreciation that I can use to offset my flipping and lending income. It is also a little bit of speculation on my part that 1) home values will continue to appreciate at or above the inflation rate and 2) that eventually rates may drop 1 - 2% (I am at 7.5% on my most recent refinance) and will be able to do a cashout refi in 2 - 5 years.

What are other's thoughts on this? The first 10 years of my investing I would have completely suggested against doing what I am doing now. I thought of banking on appreciation and rate drops as pure speculation and akin to gambling. The only thing I can do to help justify it is that now with income in the highest tax bracket, I am saving 37% on any depreciation I can get.

Will someone either wake me up to my new found delusions or encourage me that I am still on the right track.

I am not sure what your exact lending product is but for me, I focus on transparency. If I have clearly explained the requirements, the time frames, and clearly set expectations, I know that the borrowers will be happy with our service. Issues arise when borrowers feel blindsided with items or delays. Keep them in the loop as much as possible.

I send out a one sheet that has our current rates and terms, all the steps involved, and expectation of documents needed. This has been very well received and we get compliments on it all the time. I keep that one sheet attached to most communication I have with borrowers so they will always have it and I can refer them back to it as necessary.

Hi All! Looking to connect with people in the Atlanta metro area. I have some connections already made and fly out in 2 days for a week long visit. Just curious if there are any meet ups I should attend. I am looking to invest in long-term rentals mostly but am not afraid of a flip either. Thanks for any help.

@Alice Yu I suggest you don't pay $25k+ to furnish. I run my AirBnB in the DFW area and I paid $8k to furnish the place (3/2 with 1,400 sq ft). I could go into detail but I don't think it is necessary, just to say that you need to find out what your place needs. The most basic question to start with is why are people coming to your area? If they are going and making your house the destination, then you will need to spend more to have "extra" activities and amenities. If they are there to visit the area and are using your place just as a hotel to sleep at night and maybe cook a few meals, then you can get away with much less.

I have ran my place for 3 years now and have changed very little furniture of the original $8k I purchased. I charge $229/night and am booked 75% to 80% most months... And before I get blasted, yes I am raising my rates so that I can go down to 60% to 65% occupancy (considered the ideal number by many investors for STRs)

@Burke Fisher Sounds like a great deal. It just may be hard to do without any cash. I think your best bet is going to be going to family for down payment help with a clear payback plan or to talk with the current owner to lower the down payment to something that you can afford. How much cash do you have?

@Karl Denton has some great ideas on how to attempt to raise the funds yourself. I agree with him that hard money lenders won't want to touch it because they will be in second lien position and I don't know of any lenders in the area willing to do that right now. It would also be hard to find a bank that would give you money on a second lien position on a deal like this unless you have a good working relationship with them and plenty of capital in their bank which I am assuming you don't if you are looking for the $30k for a down payment. Karl's other options are great thought. 401k loan, partnering, HELOC on another property. Those are all good options to pursue.

Hope this works out well for you!

@Ricardo Ramirez I can't speak for every state as each has made different rulings in regards to wholesaling. In Texas you most definitely can wholesale properties that are on the market. Some things to note with that.

1) You will almost always get asked for a proof of funds if you are doing a cash offer or for a pre-approval if you have a financing addendum. My suggestion is to find a local hard money lender who will draft a same as cash financing pre-approval. Then write your deals as cash offers but make note that you are utilizing hard money that will allow you to close in 1 to 2 weeks.

2) If you try to add in "and/or assign" on your contract it will send up a big red flag and most agents will tell their clients to choose another offer. You will probably have to double close deals you pick up off the MLS. Again, state by state a double close may look different.

3) You will need to put up serious consideration. Meaning you will probably need to put down at least 1% of the offer as earnest money. This will depend on the agent listing the house but most good agents would want at least that much, if not more since you are making a cash offer. Be careful because you could lose that money quick if you don't have proper due diligence periods written into your contract that allow you to get out of the deal without losing your earnest money.

Hope this helps add some insight into your wholesaling career. The big take away should be to learn your state's rulings on how you are able to wholesale.

They almost certainly did. The only reason I would think they didn't is if it was a very very small company or family friend. You can use courthouse direct to do an online search in Texas. They charge if you want to get a copy of the document but you can search on the site for free which should show the lien. The other option is to go to your county's clerk office and check for yourself.