All Forum Posts by: Trent Stone

My advice, interview with several brokerages before you decide. Culture fit is HUGE. The recruiters are all very good sales people so make sure you don't sign on your first visit. I highly recommend checking out Kellar Williams. Their training program is second to none. When I was deciding I even had a couple other brokers tell me KW has much better training then they do lol. But again, go interview and make sure it's a good fit for you and that they will help you get to where you want to go. Good Luck!!

Read the "ABC's of Real Estate Investing" by Ken McElroy. Hands down the best book for getting into multi family. 

The key is to be able to move quickly. If you know your market and you know your numbers, you can sift through deals faster to see if it's even worth doing anymore due diligence without even talking to the listing broker or your agent. If you like the deal then submit the offer. You will have to have your financing in order and have your EM ready to be taken seriously. You will also have a Seller's Disclosure period and your Due Diligence period to check the numbers, get inspections, and re-negotiate if you have to and still be able to back out if something comes up. But make sure you are only submitting offers if you genuinely intent to follow through with the purchase. Never trust the pro-forma numbers the listing agent provides, always get your own numbers first then if you decide you want to make an offer you will need to verify all the numbers and leases. I submitted an offer on a multifamily then when I asked for the rent roll, leases, and accounting the owner had nothing. He threw together an Excel spreadsheet in 5 minutes with a bunch of BS. He couldn't verify a single number and through my due diligence period I learned all his numbers were whack. I cancelled the contract, got my EM deposit back with no problems.

I also highly recommend tracking all these properties you were interested in that other people bought. Run your numbers first, then go back and see what they actually sold for. It will give you a better idea of what your market is doing and what CAP rates you should be expecting.

Good luck!!

@Junior Jeune YES!! Lol....Indianapolis is great. It's got some good appreciation, good cashflow, and some great neighborhoods for flipping right now.  

Hey!! Welcome Aaron! I honestly wouldn't recommend turnkey, the returns are usually low. Also, just because you can't get your mortgage completely covered doesn't mean you can't "house hack". If you get a duplex and your mortgage is $3,000/mo maybe the other side rents for $2,500/mo. You would only be paying $500/mo to live in a nice place and your tenants would still be helping to pay down your mortgage, and hopefully you buy in an appreciating market.

Grant Cardone's philosophy is to rent where you live and buy where you rent. I personally agree, but I am not opposed to taking advantage of government sponsored loans either. They are just a tool in your belt so take them into account when weighing options. The price to rent ratios here in Utah are NOT great for investors so I invest out of state. If you are looking for pure cash flow, there are some markets in the midwest and the south that are great. A few markets in Florida, DFW, Ohio, and Indiana are offering a pretty good mix of appreciation and cash flow. 

My advice, know what your goals and criteria are, master a market then get to work. I would personally look more at price to rent ratios to determine where to put my money. Let me know if you need help tuning your criteria a little. Good luck!!

@Jason Cacioppo Yes, turnkey, positive cashflow is possible, the margins just won't be as good. I think Tulsa should be a good market for cashflow, though I haven't studied it so I don't know for sure. Be VERY careful about turnkey companies or Realtors trying to sell you "good investments". Tediously run all the numbers yourself. Then, you just have to decide what is YOUR investment criteria. I personally look for an 8 cap with $250/door after ALL expenses. But, manage your expectations, if you don't want to put in much work and you don't want much risk, then your returns will be lower. Most "turnkey" investment's I have seen will offer somewhere in the 4-6 cap range. For my strategy, those returns are just too low, for you, it might work. Feel free to shoot me some numbers if you want a second pair of eyes.

It is remarkable that even one person knows China Lake, let alone three!.... and yeah, it'll make you sweat more than a whore in church, lol.

@Matthew Odou That's hilarious!! Yes, I know Immanuel. We only have a few schools so you know everyone and everything in the town. Our 6th/7th grade basketball team would play their 8th grade team, and always won. After that there was just no point in playing against them anymore because we slaughter them so bad lol. 

I would guess that Memphis/Nashville will have more cashflow than Indianapolis. But Indy has a decent mix of cashflow and appreciation. Be careful though, places like Indy will vary street by street. You can buy a great property in the middle of a warzone. We've seen plenty of houses that look fantastic on paper until we look at the street and the neighborhood and realize why lol. If it looks TOO good to be true, then most likely it is, so keep your eyes wide open. I've got a some great contacts their if you want, just let me know. Also, remember that your cap rate should be proportionate to the class of asset and the class of the area. If you find a 10 cap in an A class, something is fishy. "A class" will be roughly, depending on the area, around 4-6 cap, "B class", 5-8, "C class 8-12", and "D class" 15-20+. Know what you are comfortable with and know what the area will support. ie. Since you are "forcing appreciation" by doing a rehab, don't make an A class in a C neighborhood. Get multiple ARV opinions from multiple sources. ie. a few realtors, yourself, other investors, pm companies, etc. You can even get a desktop appraisal to see what it will appraise for after you are done. Hope that helps!

HAHA, that sounds fun. Let us know if you figure it out. 

I'm guessing nothing showed up in probate? You can run a background check on the deceased and it should show you next of kin. Once you get next of kin just start emailing and calling until you find out what happened and who is paying for it. Also, I'm pretty sure utilities are public record in Las Vegas. Get a hold of the utility companies and see if you can find out who's been paying then skip trace the number. Someone might be checking the mail. Just send a handwritten note and ask them what's going on. 

Good luck!!

Sounds exciting!! Good for you. I would say a big factor is if you want more appreciation or more cashflow. I think where you want to live is important too, not just where you want to invest. I invest with $0 of my own money in Indianapolis. I chose it because it has shown steady appreciation and job growth, gentrification projects, and decent cashflow. The midwest and the south are good cashflowing markets. So are Detroit and Cleveland, but then you have to live in Detroit or Cleveland....Might be for some people but not for me lol. Utah, Indianapolis, Denver, and Arizona are markets that are showing strong appreciation, but your cashflow will be pretty poor compared to those other markets.

What to look for: 

Price to rent ratio, how much can you buy it for vs. how much are rents? What has the appreciation been for the last year, 5 years, 10 years? What has job and wage growth been, what are they forecasted to be? What are vacancy rates for the area you are looking in? Talk to property management companies. What is the supply vs. demand? If a bunch of new construction is going up, then stay away because it will directly impact your rents. Is there an explanation for a sudden increase in prices and demand? ie. a new Amazon plant, giant construction project, military base, etc. If a town is dependent on a military base or a large plant and they shut it down, then you are screwed. So know what is sustaining your area. I grew up in Ridgecrest, CA connected to China Lake Naval Base. If China Lake gets shut down, then Ridgecrest will disappear forever. Check crime statistics and demographics to know who you will be renting to. Once you narrow down a few areas, run the numbers hard and make sure it's still positive cashflow if you move out and be sure to include property management and conservative capex, vacancy, and repairs. 

I'm sure there's more I'm missing right now but that should give you plenty of hw lol. Hope it helps!!

Welcome!! My advice is to pick a niche and an area and become the master in it. Also depends on how active you want to be in your RE investments and how much you have to invest. Right now there are a lot of very solid appreciating markets that are good for flipping. Some areas in the south and the midwest have some great cashflow. Utah is overinflated right now, so I chose to go to Indianapolis to flip. When the market correction happens I will take the capital I earn and buy up a bunch of cheap rentals. Let me know if I can help in anyway.

If you don't plan on investing it I don't really see the point in cashing out the equity. It'll just decrease your monthly cashflow and it'll sit around doing nothing. Just my 2 cents.