All Forum Posts by: Anthony Johnson

Jonathan, sounds great message me when able I live right at the Dunedin Causeway #1 small walking town in Florida and #1 beach in the world by Dr beach and #1 small town to retire in florida!

Sorry for the delay, I was not logging on for a time.    I now have #22 in escrow and 2017 is looking great.    

Jay, I used to be a very busy listing machine and I use scripts for everything RE.   Here is one example: When I call  and I clarify that you are selling your home for $200,000 and you would prefer an equity sale, they ask what is an equity sale, and I explain it is the normal way, you pay some taxes and fees and you will net around $180,000 or so and they say, yes, that is correct.  Then I say,  "Do you need all the money right now or could I show you how to  turn it into $400k  with almost no risk and all of my high net worth clients like to do this strategy" then they ask how and I make an appointment to see the home and  work out the terms.    I like to explain that only emotional homeowners like to obsess over equity and checks at closings, but the seasoned high net worth investor would never pass up a 100% sure way to make a 100% return on the principal amount over time all secured by a first position lean on the very home you already love and cherish.    That is the basic script.   

Eric, I actually moved out of a 2400 sf home into a rental for 12 months to get a heloc, so that is how!

Sorry for the delay,  I missed this one big time!

I have been tracking the repairs, vacancies, and Capex on my portfolio of SFR. I also used to use a flat 15% then 16% as I heard HUD did, then $ 125 a door, etc my best friend is a big duplex guy in St Pete Florida and he tells me to use $125 per door per month. His stuff is lower middle like 100-150k in todays prices for a duplex. Now, right now I am using a flat 20% of gross rents PGI for rep/vac/capex and it just feels right. I also like having my numbers on a safe side. On the 15th of the month, I auto transfer the 20% of rents from operating acct to reserve account and pay for all repairs and unexpected G&A. I do not have vacancies after tracking this for 5 years, in W Florida anything nice rents fast. I have lost some rent days, but I double dipped on quick move outs more so no real loss there. I would still use the 20% if I had more vacancies. just my 2 cents.

I use a Maintenance company that is also a licensed roofer. They take my calls 24/7.    If you call the bigger property managers you should be able to find one.     I set up commercial accounts with garage door company, an appliance co. that sells used, repairs, and delivers or moves appliances, and an AC company that is also 24/7 where I can call the owner on the weekends.      I use multiple landscapers and I am able to manage my homes easily this way.   I have never once used a GC since the maintenance company can do it all. 

Great topic.  I  run my Holding Company like a business, and when I had 0 houses I knew this was a business, now I have almost 20 very nice homes I am a  RE Businessman,  not a landlord or a property mgr, although those are some of my duties.   I do nothing, and shake my head at  my friends that do work themselves.    If you want to be a REAL  successful person in RE Investing, run it like a business and build a team.   Make decisions and learn how to use auto pay and bill pay.  I  have many months my  invoices go over 10 k for repairs, rehabs, checkouts, etc I do not even inspect the work, it can wait for the annual inspection.    I know this is why I am so efficient and systematized.     Find maintenance companies you can call for repairs, skip the GC's.   I would feel so backwards and  inefficient if I was doing anything more than changing an air filter, which I do not do.   I am a businessman so my AC company does that.   Namaste. 

Great topic.   I run my holding company like a business so I use the published stats.   16% of gross rents for Maintenance and vacancies is a gov number and the underwriters like it.    re:  The Millionaire RE Investor by  Keller.     So my best friend is a big duplex investor with   15 doors, I have 18, and he says to use $150.00 a door per month.   If you stay around here you will be very close on houses with no deferred maintenance.   

Jay, the first 4 were nicer homes and I did them all with Wells Fargo I had the tax returns back then. Then I did a couple of private loans from a local investor, and I live near the beach so these homes were amazing deals when I bought in 2011-2012. After I owned 5 homes, I stopped funding my money into the deals and started using the operating account to pay back the credit card and credit line advances I started using, all at 0%, and I learned how to use BLOC and HELOCs. I also did some portfolio LLC loans and they do not source funds. I have bought one every 3 months since Dec 2011 using this formula. So for me, it is attainable to find or create seller financing deals using highly scripted emails and calls, or using Private money now that some of my lenders enjoy their timely payments I am now getting more loans from referrals. Let me clarify, the only challenge is the down payments and rehab expenses, getting the loans is certainly not the hardest part of amassing a portfolio over 20+. Right now I have my next two mortgages/seller finance deals lines up, I only do one deal at a time, and I am constantly thinking about the 18k down, does it go on a credit card, BLOC, PLOC, cash, etc. I call my method an Infinity Rate of Return, since I put zero into it and the operating account pays off the short term debt and the snowball grows. A grand chess game we play!

Jonathan, I am going to go Steve Jobs/Hindu on you by saying it is not the question you seek, rather the criteria you should stick to endlessly.  My criteria is this, concrete block, not on a busy street, not flood, a good looking house, dated is ok, but it feels good when you show it, no goofy additions, nothing weird in the back yard like power lines or ditches, and if I listed it for sale, it would  sell in less than a week or two, my exit strategy.    So I have a $30,000 purchase, and my top   price was $ 260,000 back in 2012, so the price range does not matter to me, rather, the "hassle factor" as Gary Keller calls it.    With that said,  I think that you should also take into consideration where your next mortgage is coming from.   When you have 10+ you might be doing seller finance deals with credit cards covering the down stroke, so you might do some  lower price homes to keep your business going.   Just stick to your critia and buy anything that fits. 

You need to establish your criteria in your business plan.  Something like the Mckissicks in the Millionaire RE Investor by Gary Keller.  They had to buy 20% below value, 20 % down, and it had to net $200 a month, and it had to do it on a 15 year mtg.        That is a good example.    I prefer the longest mortgage possible on every deal.   if I could do a 40 year mtg I would.  Cash flow is king and you can pay them off and refi with the high cash flow once you get a nice portfolio.    But also, take the 30 yr now, all of them, after you have 10 it will all be seller financing and you will do 10,15 and 20 years forever after 10 so it will balance out.  Namaste.

I just entered into escrow on a SFH with a private money mtg/seller financing and it is another "petty house". I have bought "Luxury" 4 br homes by the beach, pool homes, and some lower middle stuff, but everything is a pretty house, or it has that X factor, appeal, usually one of the nicer homes on the street. I have learned many things and the biggest is to run this as a business and not as a landlord or RE Investor, or even a property manager. I am a Broker by day, but when it comes to my RE Holding company, I am a businessman and I know that is the way to do this business, at the least for me. A business-person makes decisions from a slightly different perspective than a landlord or a property manager. I remind myself I am the head of a company and to make decisions for the future of the company, like a CEO, I could give so many examples, but if you have any questions I will help as I like to pay it forward. Namaste.