All Forum Posts by: Ryan C.

@Sean Tracey I am referring to the military. Fort Drum is the largest employer in the area (Jefferson County). Much of the rest of the economy consists of hospitality or service industries that serve the military population and their dependents, as well as all of the civilian govt employees/contractors that work on the base of course. The second largest employer is the hospital system as Fort Drum does not have a hospital or school system on post (which makes it somewhat unique) and is closely tied into the entire region. Unfortunately with multiple rounds of Base Realignment and Closure (BRAC), if Fort Drum was to be significantly downsized at some point it would really decimate the current local economy including housing. Drum has already been on the chopping block multiple times and was very fortunate to make it through the last round of cuts relatively unscathed. 

Originally posted by @Will Chamberlin:

Originally posted by @Ryan C.:

@Will ChamberlinI'd be interested to hear how you came to decide on investing in Syracuse from California. Thanks.

Ryan,

I grew up in the 315 area code (between Rochester and Syracuse) and went to school at SU. My wife has family in the cuse so we are familiar with the town and found the numbers work way better for buy and hold cash flow than the Bay Area. It also gives us a good reason to come back and hang out for a couple weeks each year and see family. California is a better place to be in the winter, though.

- will

 Will,

Interesting, thanks. I also grew up in 315 (Jefferson County) and recently moved back. We bought and rehabbed a house in Watertown this year that will become a rental. I know that market well, but the economy is very dependent on one economy so I'm not sure that I want to invest more there right now. I've actually considered looking at Cuse/Rochester myself but I've been torn between those or turnkey out of state (TX/FL). Might be a different thread, but I'd be interested in picking your brain on Syracuse's long-term prospects/economy at some point. I'd be interested in attending a meetup if I'm back from the Middle East by then. 

Ryan

@Will ChamberlinI'd be interested to hear how you came to decide on investing in Syracuse from California. Thanks.

Originally posted by @Vincent Crane:

The bubble is definitely different in each market this time around which is really strange to watch. Prices in Atlanta are right back to where they were before the crash, while Denver and Oklahoma City are now even higher than they've ever been. But then some cities like KC, Indy, Charlotte, still pretty affordable

It seems like Charlotte is pretty much back where it was as well. You can sort by city on the Case-Schiller indices. 

http://us.spindices.com/indices/real-estate/sp-case-shiller-us-national-home-price-index 

@Chris Clothier and @Jay Hinrichs

Those were my concerns exactly.

@Jonathan Mednick

Your definitions of vertical vs. horizontal are a little confusing to me. It’s been a little while since my business degree, I’m in healthcare now, but from what I remember of vertical vs. horizontal organizational structures… the vertical organization has power deriving from the top. This is the well-defined chain of command, think C-suite folks on down or even a military rank-type structure. The horizontal organization has a less-defined chain of command where employees across lines have similar input in regard to organizational decision making. Employees may work on teams with each member being essentially equal in terms of power, input, etc. Team leaders may report to a team of supervisors, and so on. This is often seen in more creative organizations, many tech organizations, etc. Granted, there are pros and cons to both of these structures in business and most organizations do not fall purely in one camp or the other. Vertical organizations are more efficient and can make decisions more quickly. Each person has a defined role and duties. This can also be seen as stifling creativity, learning, and adaptation in employees, however. Horizontal organizations put more power in the hands of individual employees, often making them feel as though they are more valued members of a team. These organization are also therefore less rigid and tend to have less rules.

My thinking surrounding the definition of a vertical model for a TKP would be a provider that maintains most or all of their provided services under the same roof or umbrella (e.g. they ultimately answer to the head of the same organization). A provider that contracts or partners with other organizations/teams for both renovation and PM services would be more of a horizontal model in my opinion. These contracting parties or partners have much more freedom and power to make decisions and do things as they desire considering that they are autonomous organizations in the end and contracting/partnering as opposed to working directly for a TKP or parent company.

Thanks for the continued discussion, everyone. I am really enjoying this thread as well.

@Jonathan Mednick Good point. You referred to the construction company as your 'partner.' I guess if I felt that a company was using a trusted sister-company I would feel better about it. You hear stories about people buying turnkeys to find out later that a lot of corners were cut during rehab (and missed during inspection), and I would just want to avoid the fingers being pointed at the company that was hired out to do the work. I understand that you only want happy customers who will come back as well.

@Douglas Skipworth It would seem from your description of your model that a potential benefit would be more upfront equity for the investor. And drawbacks may be more upfront capital required. Also, potential holding costs during rehab, less certainly of actual rehab costs since they have yet to be completed, and no tenant in place w/ signed lease/exact rental price upon purchase.

@Marco SantarelliGood points. I agree that in an ideal situation, “the investing experience should be complete and hassle-free.” I believe most out-of-state investors would prefer to thoroughly vet one organization rather than separate ones for each part of the process. At that point you’re almost putting together your own team. I am personally in a situation where I can do that locally, but I would prefer to diversify to other, potentially safer, markets as we have only one major industry here. Also, I see a benefit to having one organization hold itself accountable (and strive to keep you coming back) rather than point fingers in the chance that something goes wrong during the process.

You mentioned that you “maintain multiple service providers (managers, inspectors, title companies, lenders, etc.) in every market.” I was just hoping for a little more clarification. Do you have teams on the ground in your markets? From what I understand, you don’t have in-house management, but you set-up the property management initially with a local company that you vet for the investor. Do your teams or your model vary at all depending on the market? Thank you very much.

@Keith Anderson, thank you. Yes, I have also wondered if Memphis Invest is more established or committed to a strong presence in any or some of their 3 markets over the others.

And, yes, I would consider Norada to be a 'blue chip' organization based on what I know of them, but I have wondered about their integration considering I know that they are in many markets. For example, I have seen that they have listings and are building MF units in San Antonio, but I don't know if they have PM or what kind of a team they have established there. I really like that they have their listings visible and well-organized on their website, as not all turnkey providers do unfortunately.

I like your ideas regarding still identifying backup PM's, etc. I also try to be prepared for all potential scenarios.

I know ‘turnkey’ has been a hot topic as of late, but I am wondering who is out there regarding truly vertically-integrated “turnkey” providers or “fully-managed” providers. My thoughts are that there would be significant benefit to a company with a solid reputation that handles the purchasing, rehab/construction, and property management completely in-house. I would be particularly interested in the most established providers in a particular area of operations, the ones that won’t be going anywhere, and may be considered the blue chips or market leaders of the industry. I know that there are companies that are a little spread out geographically and handle the purchase, rehab, and placement of a tenant, but I would be less confident that they would maintain a presence in that particular location. Also, I believe that a company that owns/operates the construction/rehab themselves (not just oversees) would be more likely to back the work rather than point fingers at other entities. They should potentially be able to save a little more on the rehab, etc., but I am skeptical that they would pass much of this savings on to the investor.

Basically I am interested in what companies are out there that handle every step of the process (apart from independent inspection/appraisal) in house and also push to keep the customer as happy as possible to keep them coming back to purchase more properties. I am sure there are benefits to ‘boutique' providers and other models as well, and I would be open to hearing about them, but I believe I may feel more secure/confident with companies that were most likely to stick around and strive to continuously earn my business with quality rehabs and PM. I am open to hearing about these companies anywhere, but I'm personally most interested in TX, FL and east coast (PA, VA, etc).

Statistically, civilian concealed handgun carriers are even less likely to commit/be charged of crimes than police officers. This military member has also passed background checks, is likely well-trained in firearm handling/safety, qualifies for TSA precheck at airports, etc. I agree with the comments ab taking on liability if one attempts to infringe on the rights of others to defend themselves and their loved ones.