All Forum Posts by: Scott Mac

For person who is not afraid of Heights, a bucket truck might be do it yourself solution.

Inside these chimneys might be clay liner tiles.

I watched a DYI chimney demo on a 1930's one story, in San Antonio, with a fireplace below.

The fireplace it protruded from the outside wall versus being an inside fireplace and chimney.

It was the owner of the house and a couple of neighborhood teens who handled the demo and clean up.

The owner went on the roof using a ladder and took a couple of wacks at the chimney with a sledgehammer and big chunks of brick, morter and clay flue fell down on the roof and damaged the roofing, and rolled off into the yard where the boys broke it up.

The put in wheelbarrow and took it to a pickup truck which squatted heavily when filled with bricks.

It looked like a dangerous footing situation to be on the roof but the chimney came down to about chest height that way.

Then he took the sledge and just bumped the bricks loose, down inside the fireplace.

He took the whole fireplace out so there was a hole in the wall (and added a window) and the roof had to be extended over where the chimney went through, and they had to replace the shingles that were super damaged from the initial bricks falling.

Permits, I don't know if that required a permit or not in San Antonio. In your area might though.

It was not a fast job and they overloaded the back of the pickup quite a bit weight wise. It was squatting down heavily but they finished it in one long Saturday with a lot of iced tea.

I have also personally seen two owners die from falling off of one story roofs- so if you do go up there be careful.

Good Luck!

If too many people are ignoring the data, why wouldn't you be quiet about it and pay attention to it yourself, and become insanely rich from it- and sit back on your private island and laugh at all the fools who ignored it while you drink Pena Coladas From a deck chair in the sand???

Quote from @Jacque Mihovk:

Hi BP Community,

I’m a “new” investor and find myself in an in between phase that seldom gets talked about on the podcasts or in the forums. I have professional exposure to commercial real estate investment but have not done any deals personally. I’m established in my career and not looking to make RE my full time but I don’t have a ton of capital and I enjoy modeling and underwriting and being hands on with management so the passive/syndication route isn’t an option. Additionally, house hacking isn’t an option as I have 3 young children. 

I feel like my best route to getting started is by working with partners or private lenders given my current available capital. However it’s hard to get that ball rolling without any deals under my belt even though I do have experience with managing a syndication and property management through my professional career. 

I get very excited about investing and see it being a large part of my future. I’d love to have real estate provide some financial freedom/flexibility and create a portfolio that I could eventually get my kids involved with and pass down to them, but I end up feeling frozen/stuck based on the factors above. 

I know I need to find a way to start taking action but don’t quite know what that is right now, I’d love to get some feedback/thoughts on what those next steps should look like. 

Thanks in advance for your help. 

 Hi Jacque,

All of the sales seminar hype aside, let's talk about where the rubber meets the road.

You say you are good at running the numbers on these deals and managing, so what is your ballpark estimate of how much money you are needing to be able to buy, refurbish, and run what you're looking for.

Are you aware that on some deals some lenders may require certain net worth requirements of you, and certain amounts of cash equivalents to belong to you to qualify as a borrower?

I think you should work in the franchise like your father wants.

Learn the business, what if you worked as many hours as you can, work 80 hours a week or even work 100 hours a week (child labor laws might limit this ????)

In every state I know businesses must pay time and a half for all hours worked over 40 hours. 

As an inexperienced boy you would probably make minimum wage even though you work for your father - unless you are a manager but that takes experience and some maturity of years. 

You have an idea from a book that you can be a lazy boy and not have to work for your money, but it takes money to make money And you probably don't have enough money to make that money work for you. So you will probably have to work for yourself and save that money.

This is not a money for nothing business.

Work a lot, save it all, eat the food that your mother makes for you and go to work- then when you have a big pile of money of your own you can decide if you want to risk it On real estate.

Read Rich Dad Poor Dad.

Good Luck!

Hi Pan,

Work a second job, use that money for the down payment on your next purchase.

Before that purchase, it might be wise too consider having some operating capital for unexpected expenses set aside that is liquid cash well cash equivalents.

Good Luck!

You might want to think about building that into your cost of doing business when you are in areas with a more challenging population.

What I mean is, if you are thinking $50,000 down, plus closing cost, plus fix up cost, plus time on market to get rented as your foot in the door cost to get up and going- you might want to add an extra line item for additional time and additional costs associated with this type of scenario.

To cut it short, I mean theft and vandalism.

Good Luck!

 How much generational wealth will you build ? 

What will this generational wealth consist of?

It is my opinion that renters and (Landlord owned) ice makers do not mix- unless you want to pay for a lot of repairs.

Ice makers breakdown a lot.

I would never have an ice maker in a rental.

I have an ice maker myself- I love it I use it all the time- sometimes it breaks down and has to be repaired- I don't care I want the ice and am willing to pay for it.

Just my 2 cents.

Quote from @Henry Clark:

@Scott Mac

In 3 recommending he builds.  5 years ago I would say to buy your first one.  Now the premiums are so high it is better to build.  Plus Market analysis is the only thing you can fail at that you can’t correct.  The good thing about this is he will have to go thru a lender.  They won’t lend to him unless he has his act together.  Rah  Rah won’t get him a loan.

Using a 10x20 unit as an example on why to buy.

C market $65 per month. B market $90. Market $130 and higher for a drive up non climate. If you do a 200 unit minimum A location it will be worth at least $1mm more than cost on day one with no occupants. If he was to buy this location he would have to pay the extra $1mm making his return okay. If he built he would get a 400% COC return day one.

More risky to build ground up.  But again Market analysis is the only thing he can’t fix.  

Start small and Make Your Big Mistakes Early.   

(1) So you are telling him to build 200 units in a Class A location with this or is it class B or C???

Depends on your market. $50,000 SBA 10% is $500,000. Get up and running to 80% occupancy. Depends on your market. Sell for $700,000. Now you have around $200,000 in hand .

(2) Are you also telling him to build another 200 units in a Class A location but this time on more expensive land to get up to the 2 million???

Do another one at $200,000 SBA 10% $2,000,000 deal. Get to 70% and sell you will be around $1mm cash in hand including your downpayment.

Do again. Hold this time.

Quote from @Henry Clark:

Post one of your deal analysis. Let's see what type of numbers you're looking at. What REI model.

What do you mean by $1mm per year?  Cash after taxes?  Revenue before expenses and taxes?  Appreciation plus cash flow?  There is probably next to no one making consistently $1mm after taxes per year on this forum.    

If your wanting to get to $1mm after tax per year:

1.  Doesn’t fit your time frame but join the military.  Do BAH investing. You will definitely get to $1mm equity by 45.  With what you have learned should be able to get to $10mm equity by 55.  You don’t want to be able to earn or spend $1mm per year.  If you cover $100,000 per year in todays dollars your good. 

2.  Another avenue to go is Property tax sales in Texas.  Off list properties not at the tax auctions.  Use this get get more cash in hand.  Not as a Longterm business model.

3.  Self storage.  Depends on your market.  $50,000 SBA 10% is $500,000.  Get up and running to 80% occupancy. Depends on your market.  Sell for $700,000.  Now you have around $200,000 in hand .   Do another one at $200,000 SBA 10% $2,000,000 deal.  Get to 70% and sell you will be around $1mm cash in hand including your downpayment.  Do again.  Hold this time. Depending on your market you will be doing about $200,000 per month “revenue” not cash.  But you will be building both cash and equity. Pay off in 12 years.  Then your around $140,000 cash per month.  You don’t need more than that.  If you do.  Sale and now do three deals at once.  

None of the above will happen if you don’t take the first step and post a deal analysis this week.  

 Hi Henry,

In number three are you advising him to build new storage units or to buy an existing storage unit facility ?