All Forum Posts by: Tom Scott

IMHO = In My Humble Opinion.

I know one way to increase website page rank is to have it associated with other websites like social media and blogs. This is one reason I think I want to start a blog site. Additionally, I think it will be fun to be able to share the experience of my journey into the world of real estate investing. I'd like to follow the J. Scott model and use the blog to keep detailed records on purchase price, rehab costs and profits. My one main concern is that if it is linked to my lead generation site, that prospective sellers may find the blog and it might prejudice them during negotiations. If they can deduce approximately how much I make on a deal they may decide to hold out for more money since they think they know my margins. Is this a valid fear? Is there a negative aspect to keeping a detailed blog?

I'd also like to clarify that I am not trying to deceive anyone. Obviously I am willing to talk openly about a deal with a prospective seller but it would seem to me that giving away too much information could be detrimental

I'm curious to hear what you all think.

Tom .

I should point out the SDIRA really isn't an option I want to explore here. I am focusing more on the high level discussion of cash flow vs cash and the benefits of each. 

Tom

@Robert Leonard has my line of thinking down exactly. The more I think about it, the more I see flipping a great deal as killing the golden goose. Unless the house is high end, which I'm not targeting, then it would fall in the starter home / blue collar home category which is the butter zone for both rentals and flips. If I can get a house that meets the criteria for a flip with lots of profit, I feel like I am trading great cash flow by flipping it and cashing out. It would be like selling a rental home with great cash flow and equity. I would imagine most people here would tell me that is a horrible idea. 

Obviously every property will be different and no one rule applies so this is more of a philosophical debate. I am just wondering if perhaps I should look harder at pushing right into SFR rentals and focusing on cash flow instead of being so preoccupied with having cash on hand immediately. After all, I could refinance the rehab as soon as it was completed and probably pull out my investment and roll it into the next deal.

Tom

Hello all,

My first mail campaign began this weekend so hopefully the phone will start ringing shortly. My long term goal is buy and hold rental properties, mostly SFR, but I have managed to convince myself I need more cash to buy a rental property and therefore I am going to start out with fix and flips to build up my cash reserves before committing to a long term buy and hold. I want to repeat this process over and over for as long as I see fit. The problem is, the more I ponder this strategy, the more I realize that if I find a good deal for fix and flip, that deal would also probably make a excellent deal for a rehab and rent. Gainesville is a college town and the rental market seems to be doing quite well and should continue to do so for a long time.

So the question is, am I stupid to cash out on a fix and flip when I could probably turn it into a cash flowing rental instead? If I "buy like a wholesaler", my deals should have tons of room for cash flow even with bank financing. I'm interested to hear the groups responses. Just for the record, I can handle property management, but I am thinking I would rather buy low enough to afford to pay for it with my cash flow. I would rather buy more houses than spend my time fixing stuff.

Tom

When I was in college I had a friend who was subletting her apartment. She was contacted by a guy who wanted to do something similar to what the OP describes. She got a cashiers check in the mail and she deposited it. A few days later he contacted her and backed out of the deal and requested a partial refund. She agreed and sent him some money in the form of a personal check. He cashed the check and a few days later the bank told her his original cashiers check was a fake and that they had removed the funds from her account. Turns out the bank will release funds to your account before the cashiers check actually clears. She lost a good chunk of money on the deal. The tenant may very well be legit, but it sounds awful fishy to me. Tread carefully. Tom

Hello all, 

My first mail campaign begins this weekend so hopefully the phone will start ringing shortly there after. My long term goal is buy and hold rental properties, mostly SFR, but I have managed to convince myself I need more cash to buy a rental property and therefore I am going to start out with fix and flips to build up my cash reserves before committing to a long term buy and hold. I want to repeat this process over and over for as long as I see fit. The problem is, the more I ponder this strategy, the more I realize that if I find a good deal for fix and flip, that deal would also probably make a excellent deal for a rehab and rent. Gainesville is a college town and the rental market seems to be doing quite well and should continue to do so for a long time.

So the question is, am I stupid to cash out on a fix and flip when I could probably turn it into a cash flowing rental instead? If I "buy like a wholesaler", my deals should have tons of room for cash flow even with bank financing. I'm interested to hear the groups responses. Just for the record, I can handle property management, but I am thinking I would rather buy low enough to afford to pay for it with my cash flow. I would rather buy more houses than spend my time fixing stuff. 

Tom

I must be honest, when I started using Google Adwords I really figured it wouldn't generate much in the way of traffic let alone leads. At the moment I am using a $100 start up credit I got in the mail, so I am just trying to see how it all works. In spite of my meager budget, I'm at $10 a day max, someone actually filled out the form on the site and it only took about a week to get that first submital. 

The home was a 3/2 SFR just shy of 1800 sqft on 5 acres of land and the owner was in foreclosure. Not quite what I am after but I pursued it for practice all the same. Did a little research before I called the owner and then used him to verify what I had found. This was an interesting practice since I discovered that I can get quite a bit of pretty accurate data from the web even before talking tot he seller. Home was bought in 2009 for a loan amount of $170k and they still owed $156k. Based on similar sales int he area over the past 6 months, I think the ARV would have been around $150k so obviously there wasn't enough equity to make the deal work. Sounds like the house was in decent shape but the land it was on was uncleared. All the high comps that had sold in the area were small horse farms with cleared pasture land. I could have possibly added value to the property by clearing, fencing, and seeding the land as well as building a small barn but that is a large cash outlay for what would have most likely been a pretty meager profit. The best I could have offered him was around $70k if the house was in good shape and the owner had not yet tried to list with a realtor for a short sale. I felt bad for the guy, he didn't sound like he was very on top of his situation, I told him he would be better off trying to list it for a short sale and that I would most likely be his last worst option should he not be able to sell it on the open market. He seemed appreciative of the advice, so maybe I was able to help him a little.

So, overall it was a bust, but good practice none the less. Obviously Adwords and the like are not nearly as targeted as I would like, so I think I'll keep allotting limited funds to that campaign. My first direct mail campaign begins on Saturday so I expect an influx of phone calls beginning next week. Wish me luck. 

Tom

So I am curious how you guys estimate the roof dimensions? Do you just measure the horizontal distance and then add some safety margin to the numbers? On this first job I had my wife hold the tape at the base of the wall and then I measured diagonally along the wall at an angle that approximated the slope of the roof. I found it typically added a 1 to 2 feet over the horizontal measurement, though on a house with a really steep roof this would not work as well.

Tom

Yeah took a camera, forgot to mention that. A laser tape measure is something I decided I needed as soon as I dropped my clipboard the first time. Tom