All Forum Posts by: Todd Powell

@Juan Alvarez Think BIG and follow your passions and dreams! If I was younger, I would start out harder and faster! Again, my son @Jason Powell got that first 4 plex right out of college with a letter to start of job, along with his wife's internship at Intel. They had limited credit, but enough to make that first bold move. It has panned out, and at 27 years old, they are flying in the RE world! They are way beyond where I was at 27 years old! Go get it man, but buy the right deals and don't chase the crazy MLS stupid offers! Find off market, solid deals!

@Nathan Gesner I agree with everything you stated above. I am a nice guy, and sometimes a bad tenant just smells that out and doesn't make a move. I also agree that when I have bought off market, run down buildings I take on that risk based on the prior landlord. This is where most of my issues have come from. I have at times made the closing date 70-80 days out and asked the current owner to served their tenant a 60 day no cause and for them to be completely out by the time I close. This has worked, but not always. I would much rather have a vacant run down unit to rehab, than a horrible tenant who is playing games and still have to clean up their mess after move out. In principle, you are correct also about doing eviction and all steps necessary, but I have a full time job and manage 22 doors, and its easier for me to find peace and save money in the process. But, I don't give them the black eye that they deserve many times, and recently another landlord took a major problem away from me. They made a huge mistake!

@Juan Alvarez my son bought a 4 plex in Beaverton Or for $415K four years ago using a FHA loan with 3.5% down! He got a great deal and then a couple years ago bought a second 4 plex the same way. He got lucky as FHA was NOT designed to build RE investment portfolio. But that's how he started! Now, back in April we closed on a 8 plex 50/50 getting a commercial loan with 20% percent down with MAPS CU. It can be done ! Best of luck

@Seth Nadreau thanks for your input.  The $421K loan balance is interest only at prime rate minus .25% so it’s under 5% right now, but in possible rising interest rate climate it has me concerned. My use of this line with down payments and massive rehab of units make me concerned moving forward. 

@Ed Emmons well said. My son stated the same comments you did. You said, "Dad what are your goals and where do you want to get to?' Maybe that's part of the issue. I don't know if moving these properties into something larger is smarter or just focusing on this monster HELOC? I need to decide and formulate specific goals and a plan. Thanks for your input !

@Greg Gaudet funny while on vacation I was close to buying a condo where the locals would live up in the north shore. It shocked me how simple and SMALL this unit was! This was 10 years ago and if I remember correctly is was around $170k for 700 sq feet 2 bedroom and was across the street from the ocean Anyway, in the Pacific NW, I am getting roughy $500 cash flow per unit, but I have several 4 plexes, 5 plex and 8 plex type properties. I have very little vacancy and also PM myself and cannot trust someone to do what I do incredibly well. Hope this input helps! If its not broke, dont fix it. Keep on your successful path!

@Grayson Gist I am to a man of principle and integrity. The issue at hand is I have paid thousands to an attorney, had to leave work twice and be at court, not to mention that they still bought 30 days of extra free rent to do this. 99% percent of the time the people I screen are wonderful. But more than 50% of the time the tenants I inherit from buying a run down building that I need to rehab and turnaround, it is easier to work peacefully to get them out. You can get more bees with honey than with vinegar. My 1% of horrible tenants have made me want to sell 100% of all my properties. Best of luck on this one !

@Grayson Gist unfortunately I have been here before. I offered cash for keys and all my dead beat tenant did and say, hey I need that cash to live in your place longer than my 60 day no cause.  That tenant had trashed the place, but truth is, I inheritated them when I purchased the property. I also gambled on very bad section 8 and lost thousands. Take it from me, if you can cut your loses further by paying cash for keys I wpuld do it. I would stipulate that they are FULLY moved out and also cleaned up properly before you hand the cash over. Just my thoughts. Lose the battle and win the war! 

Hoping investors with experience can advise me here. Or, any new investor comments or insights are welcome.

My story in a compressed version. I have been managing car dealerships since 27 years old--1995--but have always had a passion in RE. A car wholesaler handed me a book one day, RICH DAD POOR DAD, and I could not put the book down.

Just weeks before 9/11 occurred, I invested into a manufactured home. I ONLY reason I did this was because my brother in law managed a manufactured home dealership. They would take trade ins and figured them for zero, so I saw an opportunity to park the money into their trade ins and they would resale them for me. I did this roughly 12 times, and in 2002 I bought my first fixer upper. I had been looking for distressed properties and could not find a good enough deal. I paid $80,000 for a small 3 bedroom and fixed it up (rather simply when I look back), sold it to one of my salesman and made $27,000. I was hooked!

In those days, I could find some bank owned properties here and there. I knocked on a door and asked a woman, "Hello, this is a strange question, but would you like to sell your home?", and Gail responded, "yes, I would, I have been praying that someone would take this." I am not kidding, I merely saw tall bushes and a home in horrible repair, and I did not research her late payment history with the bank. I made roughly $30,000 on this deal. To speed up here, I found homes anywhere from knocking on doors, networking, realtors, word of mouth, and writing letters. I flipped roughly 20 properties from 2002-2009, while working a full time job and coaching my sons basketball teams. My wife wanted to kill me, but I had a overwhelmingly desire to retire and making this extra income I felt was the way to accomplish this. We paid a lot of short term taxes doing these flips and saved up money so we could invest in RE.

In 2007, I picked up the Sunday paper and my wife and I agreed to go look at a triplex open house. It was a 1900 older building near OSU campus, and needed a bunch of work. I negotiated the price down within the week from the $250,000 asking price down to $190,000 AS IS, and took my first buy, fix and hold deal. We invested roughly $50,000 into rehabbing this and found tenants. My first tenant, however, violated the NO SMOKING policy and ended up burning the front of this building down two years later (another story). My wife and I also bought another 1900 older run down triplex near the OSU campus in 2007, and one more pre foreclosure 4 plex in 2008 in the midst of a bad economy. The appraisal was $300,000 in a very bad economy and the bank wanted to know how I was purchasing this for $228,000.

In 2011, we were lucky enough to get a 15% ownership via a LLC with a buddy of mine who owned many larger apartments in various states. I used my personal home line of credit to buy into this--$202,500--our portion of the 1.35 million down payment. We paid 5.5 million for 72 units near the college campus. I then needed to sell two of our old triplexes, pay taxes, and pay off our house line of credit.

I switched my employment between dealerships in my town in this ship wrecked economy which began in 2008 and cut my paycheck in half in car sales. I ended up taking 2009 though 2016 off without doing any real estate investing other than the 2011 leap with my partner into this 72 unit building. I had seemingly lost my RE passion and only held the old 4 plex we purchased in 2008 and the 15% ownership in the 72 unit building. We cashed flowed roughly $4500 per month on these two investments. Then in 2016, I knocked off the rust since I went dormant for 7 years! I had hit my 401K pretty hard for years, but was realizing that I could not retire without achieving cash flow. My buddy who let us in the 72 units building always laughed that I worked too hard at 2 jobs, as he shared with me how he earns $45,000 cash flow on all his huge apartment buildings. I asked myself, "have I been doing this all backwards?" That is, flipping so many house, and paying those taxes, while my others buy and hold appreciating assets and make cash flow?

So, in 2016, I set my sights on making some more money invest into the bigger picture of cash flow, and buy and hold. Here were my steps:

1) flipped a 1920 bank foreclosure

2) flipped a second 1915 bank foreclosure (sat for 4 years vacant).

3) Bought a 4 plex that needed $100K in renovations. owner carry.

4) wholesale flipped little house (guy called me from 9 years ago after I stopped by his house).

5) Bought a 4 plex near the other one that needed $120,000 in renovations (sat vacant for 13 years.) owner carry.

6) Bought 2000 square foot house on owner carry roughly $50,000 below market. Breaking even, but bought for equity.

7) Bought a run down 4 plex on owner carry.

8) wholesale flipped older house for $7000 profit.

9) Bought 5 plex 50/50 with my son. First ever commercial loan.

10) Bought 8 plex 50/50 with my son. Second commercial loan.

Due to all of this, I have my interest only debt down from $500,000 to $421,000. This interest only is roughly is $1650 per month. I used my personal home on all of this fix ups and down payments. I have 13 years left of 15 year draw period interest only.

Let's say no vacancies I am cash flowing roughly $14,000 per month on all these RE deals.

What is your opinion here? Do I focus on paying down this HELOC, or try and leverage into bigger apartment building to achieve cash flow? I have these units in Corvallis, Lebanon, Albany, Monmouth, and Forest Grove, so consolidating could be smart, or do I just pay these down?

I am curious on what your thoughts are and I appreciate you reading this long post. I am 51 years old and trying to make future decisions on what is the best course of action. I feel a downturn in the economy approaching, and flipping seems near impossible at the moment finding deals.

At 51 years old, I am thinking hard about my next steps and want to make the right moves!

Thanks for reading and any input you can give to me, as this forum is full of many diverse RE minds!

Cheers,

Todd Powell

Corvallis, Oregon

Hoping investors with experience can advise me here. Or, any new investor comments or insights are welcome.

My story in a compressed version. I have been managing car dealerships since 27 years old--1995--but have always had a passion in RE. A car wholesaler handed me a book one day, RICH DAD POOR DAD, and I could not put the book down.

Just weeks before 9/11 occurred, I invested into a manufactured home. I ONLY reason I did this was because my brother in law managed a manufactured home  dealership. They would take trade ins and figured them for zero, so I saw an opportunity to park the money into their trade ins and they would resale them for me. I did this roughly 12 times, and in 2002 I bought my first fixer upper. I had been looking for distressed properties and could not find a good enough deal. I paid $80,000 for a small 3 bedroom and fixed it up (rather simply when I look back), sold it to one of my salesman and made $27,000. I was hooked!

In those days, I could find some bank owned properties here and there. I knocked on a door and asked a woman, "Hello, this is a strange question, but would you like to sell your home?", and Gail responded, "yes, I would, I have been praying that someone would take this." I am not kidding, I merely saw tall bushes and a home in horrible repair, and I did not research her late payment history with the bank. I made roughly $30,000 on this deal. To speed up here, I found homes anywhere from knocking on doors, networking, realtors, word of mouth, and writing letters. I flipped roughly 20 properties from 2002-2009, while working a full time job and coaching my sons basketball teams. My wife wanted to kill me, but I had a overwhelmingly desire to retire and making this extra income I felt was the way to accomplish this. We paid a lot of short term taxes doing these flips and saved up money so we could invest in RE.

In 2007, I picked up the Sunday paper and my wife and I agreed to go look at a triplex open house. It was a 1900 older building near OSU campus, and needed a bunch of work. I negotiated the price down within the week from the $250,000 asking price down to $190,000 AS IS, and took my first buy, fix and hold deal. We invested roughly $50,000 into rehabbing this and found tenants. My first tenant, however, violated the NO SMOKING policy and ended up burning the front of this building down two years later (another story). My wife and I also bought another 1900 older run down triplex near the OSU campus in 2007, and one more pre foreclosure 4 plex in 2008 in the midst of a bad economy. The appraisal was $300,000 in a very bad economy and the bank wanted to know how I was purchasing this for $228,000.

In 2011, we were lucky enough to get a 15% ownership via a LLC with a buddy of mine who owned many larger apartments in various states. I used my personal home line of credit to buy into this--$202,500--our portion of the 1.35 million down payment. We paid 5.5 million for 72 units near the college campus. I then needed to sell two of our old triplexes, pay taxes, and pay off our house line of credit.

I switched my employment between dealerships in my town in this ship wrecked economy which began in 2008 and cut my paycheck in half in car sales. I ended up taking 2009 though 2016 off without doing any real estate investing other than the 2011 leap with my partner into this 72 unit building. I had seemingly lost my RE passion and only held the old 4 plex we purchased in 2008 and the 15% ownership in the 72 unit building. We cashed flowed roughly $4500 per month on these two investments. Then in 2016, I knocked off the rust since I went dormant for 7 years! I had hit my 401K pretty hard for years, but was realizing that I could not retire without achieving cash flow. My buddy who let us in the 72 units building always laughed that I worked too hard at 2 jobs, as he shared with me how he earns $45,000 cash flow on all his huge apartment buildings. I asked myself, "have I been doing this all backwards?" That is, flipping so many house, and paying those taxes, while my others buy and hold appreciating assets and make cash flow?

So, in 2016, I set my sights on making some more money invest into the bigger picture of cash flow, and buy and hold. Here were my steps:

1) flipped a 1920 bank foreclosure

2) flipped a second 1915 bank foreclosure (sat for 4 years vacant).

3) Bought a 4 plex that needed $100K in renovations. owner carry.

4) wholesale flipped little house (guy called me from 9 years ago after I stopped by his house).

5) Bought a 4 plex near the other one that needed $120,000 in renovations (sat vacant for 13 years.) owner carry.

6) Bought 2000 square foot house on owner carry roughly $50,000 below market. Breaking even, but bought for equity.

7) Bought a run down 4 plex on owner carry.

8) wholesale flipped older house for $7000 profit.

9) Bought 5 plex 50/50 with my son. First ever commercial loan.

10) Bought 8 plex 50/50 with my son. Second commercial loan.

Due to all of this, I have my interest only debt down from $500,000 to $421,000. This interest only is roughly is $1650 per month. I used my personal home on all of this fix ups and down payments. I have 13 years left of 15 year draw period interest only.

Let's say no vacancies I am cash flowing roughly $14,000 per month on all these RE deals.

What is your opinion here? Do I focus on paying down this HELOC, or try and leverage into bigger apartment building to achieve cash flow? I have these units in Corvallis, Lebanon, Albany, Monmouth, and Forest Grove, so consolidating could be smart, or do I just pay these down?

I am curious on what your thoughts are and I appreciate you reading this long post. I am 51 years old and trying to make future decisions on what is the best course of action. I feel a downturn in the economy approaching, and flipping seems near impossible at the moment finding deals.

Thanks for reading and your thoughts!

Todd Powell

Corvallis, Oregon

@William L. have you done much rehab before ? I am with @Michael Le if you do not have vast experience this can destroy you. Your holding costs can kill you, and do you have reasonable and plentiful contractors lined up? I did 8 units with severely run down units and literally did everything you could do from top to bottom, which was around $28,000 per unit. I did make them upscale units and the building sat vacant for 13 years prior.  My son @Jason Powell just turned around 8 units near Portland recently and we spent $75,000, but the last two units were the best condition so we left current tenants in place. My point is, it’s a massive undertaking to rehab that many units, unless you have lots of manpower, money and time on yours hands. Oh, and you better have lots of prior experience with flips and rehabbing.  Just my two cents here.