All Forum Posts by: Shahriar Khan

@Grant Doyle nice work so far .. Given we are in Houston aka flood is a daily topic, below is what we would do 

1) Water/No water/Never/Ever doesnt matter .. If the property is in flood plain (flood/way/100 yrs/500yrs) then any lender will make you pay flood insurance UNLESS you can prove via topographic survey that your property is above the flood plain even its in the flood zone .HIGHEST RISK. 

2) Roof has 5 yrs .. Its a slippery slope .. # of years really technical value and you can expect to last longer unless you have had hail damages below. I wouldn't worry about that for now 

Also back away if you dont feel comfortable .. Flood insurance killed buck of deals this year and we were happy to walk away . 

Keep us posted. 

@James Johnson even you pay taxes the house will not be yours. There is a provision for 3/5/10 yrs for tax paying position and then take the case to litigation where court will appoint an Attorney to track down the owner . By the time all those happens , the true owner will be tracked down and you will loose the amount of tax that you have paid . 

Make your life easy and enjoy the free ride :) 

@Martin Tyler First off great work. Its a slippery slope when you work with owners like that but if you can manage it right, return will be crazy. I am also in the same boat and working couple of offers (made 1 and about to make another 1)  .. below is what we have did the underwriting 

1) Loan product : HUD 223F /120 days to close OR Agency Loan from Fannie /Freddie (55 days to close)

2) Underwriting: Given the town population /local job sector, higher vacancy rate , in addition to Opex /Capex allocation we added a one time capex to set the baseline, assumed 90% purchase price as tax rate (100% if your is a disclosure state), management cost, utilities ..

3) We also added 1% point on fully burdened CAP rate to derisk smaller population

4) We didnt increase rent .. kept AS IS .. 

Happy to connect if you have additional questions. 

@Account Closed this community if full of resources and have extensive knowledge about US market down to zip code and since we care, we share what we think new investors should keep in mind.

If you assume, we all will take time from our busy life to say exactly what you want to hear and will not critique your thoughts then i added ZERO value ...but thats not the way this community works and we expect you be open to others feedback. We have walked the path what you want to walk and we are trying to minimize pain point based on some the mistakes we have made. 

And YES, your question is absolutely generic since 4th largest City (Houston) has 3rd largest county in USA, with 20+ neighborhoods,119 zip codes and 1.2 million pieces of properties  and you were asking about is this a good place to invest  :) 

Feel free to reach out if you needed additional data point .. Happy Sunday ... 

@Account Closed question about what is the "intent" of the thread ... Your questions is like " why should i get exited to buy a car" ... too generic ..

Having said that ... its really doesnt matter where you buy/sell.. as long as you know the economic behavior of that location and price properties accordingly. ..Real estate is very local (down to Zip code level) ... 

What i would suggest as you get started , figure out your financing and then use that to direct what /where you can buy /trade ..if you buy right then margin should be  there .. Best of luck

@Veronica Knight .. since you asked couple of more things ...one must add value to the transaction ... 

1) Value add for a realtor is that they can list on MLS ... value add for you could be bring a buyer at a right price .

2) There are 2 kinds of wholeseller .. A) they try to flip others deal ..waste of time ... B) Wholeseller who has the contract under their name .. you need to be in this category 

@Veronica Knight welcome to the party .. Craigslist , FSBO, Zillow will not work since Houston market is sophisticated ... you need get started with mailers/cold calling/network with realtors for crappiest house that they may get ...

@Alan G. What you have done in MF is simply Bad A$$ and hopefully below show you the diff between SFR vs MF

SFR: Typical investor will take risk for 30 years to make 200/300 per month. Yes, better COC. You have 60 doors and 100K/door will make you have 6 million worth of asset . Whats next ? buy 1 then another ?

MF: You can consolidate all those 60 houses into 1 location and buy 1 property for 6 million . After XX months, you will go and buy another one with 100 units (totaling 160) ...then all you will do is manage the 3rd party mgmt company ... based on your experience from SFR, you will get much better return compare to typical syndicator thus will be able to scale up faster

At the end, you are not in real estate anymore, you are "a buyer of service companies" which happen to be in real estate ... 

Hope this helps... 

@Darrick Richardson agree with @cameron tope about direct mailing (and you will need a large budget) ... recent trend is cold calling . Either way , picking up the right area to compete and right list of owners will increase your likelihood to get a property under contract . 

Best of luck and keep us posted with your results. 

@Andrew Pettit school doesnt guarantee any success but minimizes probability of failure in life . Having said, if you some degrees have a negative value unless its form a top tier college . Political Science is one of those  unless you want to go to law school and then into politics. 

Having said that, STRONGLY suggest that you get Finance/Technical degree as you keep up with your RE investments. A good degree will/can open certain doors in life early. 

PS: Folks who did well in life without going to college, (to me) they would have been rock solid A+ students if they wanted to attend college. 

Best of luck.