All Forum Posts by: Warren Foster

Update.

Well, the Atlanta offer went nowhere. I asked for a short due diligence period and the reply from the agent was "how are you going to inspect the property from out of the country?" Pay someone to do it for me, duh!

Of course he made it even worse by adding that two other out of state investors had already backed out of contracts before which lead me to ask (of course) if there was some non disclosed issue with the property and that maybe he should let me know so we did not waste any more of each others time. Surprisingly, I never heard back...

Jon, I never did get the whole "buy Gold" as a hedge for the end of the world. I guess you could use the gold bar to hit your neighbor on the head and take his food.

I think you pretty much hit my dilemma on the head. Trying to balance risk versus reward versus active participation limitations from a couple oceans away, etc.

Lending does seem like a fairly hands off exercise (at least when using a broker.) I'm kinda doing that a little already using a peer to peer lending program that has paid me a consistent 11-12% over the last year and that takes no more effort that a few key strokes on the computer to transfer money in or out.

On the other hand, I do believe that the property market today and likely for the next few years is going to be one of the best periods for investing as long as you have the resources to do so. I do think many areas will see more declines, then a long period of stagnation until the whole foreclosure mess sorts itself out. But I am at heart an optomist (why bother otherwise) and I believe things will stabilize then slowly move back up. Because of this, I think I would be remiss to not take advantage of this.

I do wholeheartdely agree witht the 2% deal criteria, although that tends to limit my investing areas (my rental homes in Colorado Springs will never meet this criteria unless I sell them to my LLC at a big, big discount :))

Vikram, you are right, partnering would also be a great option and I will difinately be keeping my eyes open for opportunities. I do appreciate the earned income exclusion, but it still rubs me around tax time when all my British, Canadian, and Australian friends give me a hard time about how they pay no tax at all and only the US and Libya (slight exaggeration, but only slight) tax their citizens who live and work fulltime outside the US. No wonder most American companies overseas prefer to hire non-Americans, they don't have to pay them as much.

Bryan, you have my email.

It is interesting the number of people here who have endorsed the cash purchase of low dollar, cash flowing properties. You hear so many contrasting opinions about ROI's and preservation of capital, etc.

Thanks for everyones input. It is truly welcome and certainly gives me more to think about. Thanks, I think :)

Nate,

Yeah, it is a decent cash flow and that's why I'm trying to figure out the most effective way to utilize it and I have no desire to throw money into the stock market. It is also tempting to as you say, to just invest in a low cost area where that cash can go a long way. ..

Diane & Louis, see, I knew this question would bring in some excellent points! Note to self, add alcohol and cigarettes to the list.....:)

Jon and Financexaminer,

Thanks for moving to the correct forum. Great comments and I appreciate the input.

I meant to say I had $15k invest able income MONTHLY if that makes any difference in your recommendations :)

Thanks Again,

Warren

OK, I'm not sure if this is the proper forum for this question, but I'm sure that if its not, someone will let me know.

Anyway, here is the situation. I am looking to put together a long term strategy for investing in Real Estate. I'm not a complete Newbie and currently have 4 rental properties, but we can exclude them for the sake of this scenario.

I have a cash flow of $15k in investable income that should stay consistent for the next 4-6 years.

Objectives.

1. Passive income stream to supplement current retirement income.
2. Drop the 9-5 and work RE full time after the 4-6 year period.

Limitation. I am a way, way, out of state investor that maybe gets back to the US once or twice a year if lucky for a few weeks.

Options that I am considering.
• All cash investment in low cost (30-50k) cash flow properties. Buy & hold.
• Use leverage to buy higher priced (50-150k) properties for cash flow and appreciation.
• Trust deed investing.
• Hard / Private money Lending.
• Multi-family properties.
• REIT's.
• Partner with local investors.
• Use cash or leverage to buy "Turn key" Rental Properties.
• Throw it all under a mattress, buy gold bars, or invest in survival rations and a good bunker.
• Combination of the above.

So, what would you do?

Vikram,

Yes, even now, it is just starting to get below 100. It's actually pretty nice from about November until the middle of may, then we all retreat back into the world of air conditioning.

You probably visited either the Cultural Center downtown. It is amazing when you see the pictures from 60 years ago when there was three cars or so on the island and then look at the parade of luxury cars and 5 star hotels you get today.

Warren

First of all, I want to thank everyone for the great inputs and recommendations. I do appreciate it.

Jimmy, right now my 4 properties are in two states and I have 3 property managers! I know, long story. I do plan to consolidate PM's at least by city. Unfortunately, You are right in that I should probably pick one area and stick to it, but i know myself, I will probably try to choose 3-4 areas and build a trusted team in each as a means to both diversify and increase the pool of prospects.

Sammy, thanks for the kind words. Memphis is definitely on my short list of potential investment areas. My only concern with turn-key purchases is the high mark-up (relatively of course.) Then again, it might be a safer way to at least get a foothold in a market and then build from there.

Champak, thanks for the info on Atlanta. It's also on my short list. Please email me more detailed information on the companies you recommended. In a perfect world of real estate investment, I would have to agree that maximizing your leverage is the way to maximize your returns in the long run. Of course that also comes with it own accompanying risk. I guess every investor has to find their own comfort zone. I probably be somewhere in the middle, but I have to say that it is a psychological boost to have something paid off and using the total cash flow as you ROI.

Steve, I think we agree on the cash versus leverage thing. Thanks for the comments.

Again, thanks to everyone. I am always open to suggestions of companies or potential partners.

Warren

Mike,

I wish I could put eyes on as well, but that just not going to happen from where I am overseas. I am sure I'll get burned a few times but I plan to minimize it by insisting on a due diligence period and paying for a home inspector. Cheaper than a flight.

By the Way, I just put my first offer in today on a property in Atlanta based solely on pics from the MLS. I guess we'll see soon how well true long distance investing works out for me.

Thanks to all for your replies. I agree completely that the key to investing from a long distance is getting the right people working on your behalf. I expect I'll get burned a bit more often than if I was local, but that's the price I suppose. Anyway, thanks again for your kind comments. Warren

Michael,

I have to agree on the use of PM's. Not only am I an out of state investor, I am an out of the country investor as I have been living and working in the United Arab Emirates for the last few years. I have several properties back in the states and have not run into a issue yet that I could not fix via email or a phone call with the PM. You just add the cost of a PM from the get go, and run the numbers accordingly.

Unfortunately, i can't really answer your question about investing from a long distance as all of my properties were bought before I moved. But I will be watching this post closely for ideas as I also plan to significantly increase my investing over the next few years whether i am in the states or not.

BTW, seeing that you are from Pleasant Hill just reminded me that I am missing my 25th High School reunion down the street in Martinez next week. Sigh.....

Warren