All Forum Posts by: Aaron Bassett

I have read that one should avoid investing in ground level condos, due to the perceived safety risk (prowlers can access through the back door). I would be interested in getting people's opinions on this and have you heard this concern from prospective tenants? Has it affected your ability to get market rent? I always liked the ground level when I was a renter so I am not sure about the validity of this. Assumptions: "A" neighborhood. No views.

Thanks

No one? Any property managers with experience managing temp/corporate housing for clients? Any investors experimented with this model for their properties?

I am interested in people's experiences using their rentals as corporate or temporary housing units. Basically fully furnished units with cable, all utils paid, etc leased out at a rate significantly higher than market rent for a minimum of 30 days. I couldn't really find much in the forums. Thanks for sharing.

Thanks for the feedback, guys. I am starting to look at markets in Texas and have never been there before. After reading some of the employment forecast literature underwritten by the cities and industry, I just wanted to make sure I was reading the truth. It pretty much validates what everyone is saying here.

Can the kind of economic growth rates seen in Texas right now be sustained over the long run? Is anyone concerned that the state is too reliant on Oil and Gas industries, and the manufacturing that supports them? They've survived through the 80's bubble, the recent subprime crisis, and the demand for oil worldwide is projected to grow despite any alternative fuel efforts here in the US. However, is anyone scared that a sharp, long-term drop in the price of crude could leave investors scrambling to find tenants? Just curious.

@Account Closed : Thanks for sharing your experience. Have you seen that strategy succeed in your own market as well as Florida?

@Marco Santarelli : You make some great points about the risks of building your team from a distance.

@Dawn Anastasi : Cash flow is indeed essential.

@Andy Luck : I had not thought about a joint venture. That is an interesting idea. However, on a small scale, wouldn't that dilute your potential reward to the point of it not being worth the effort?

@David Beard : Wow. Thanks for the comprehensive and balanced response. I am drawn to the challenge of building my own team starting with a property manager. I know it is cliche, but I am a "people" person and I also love to do research.

You addressed one of the biggest concerns I have about going the rehab route: financing. I have cash to spring for rehab costs, but will the property be financeable in its original state? That's why I was thinking of focusing on "rent ready" or "close to rent ready" properties, that would require very little rehab. Would a Realtor be a better choice or am I giving up more advantageous leads that a PM may have (i.e. wholesalers)? Wouldn't this strategy expose me to less risk on the carrying costs you mentioned at the expense of a slightly higher purchase price?

@Engelo Rumora : I appreciate the honest response, given that it may go against your business interests. It gives me confidence that I can do this...

Jon,

What you are saying definitely resonates with me. However, I want some cash flow and am not willing to settle for break even.

I am wondering if there are folks out there, who are working full time jobs, that have invested out of state without doing turnkey. Specifically, are there passive investors operating in a middle ground between the "buy distressed/manage entire rehab yourself" folks and those that go hands off for turnkeys?

I am willing to put in the time and effort up front to do my due diligence, but I don't have time to oversee a rehab project half way across the country. But I can take a week off here and there to get a team up and running. I am wondering if people like us have had success building an out of state team on their own, focused on purchasing "rent ready" or "close to rent ready" properties at slight discounts. The advantage being you are not limited to the turnkey's inventory, allowing you to target specific neighborhoods of interest that they might not have properties in. Also, by eliminating the turnkey and finding your own realtor, PM, etc. would you save $ and be better be able to obtain property that meet your specific criteria?

For those of you with full time jobs and a passive approach to REI: When you don’t have sub 50K properties within driving distance are you just going the out of state turnkey route? Or have you found success flying out somewhere for a week and building a team on your own (hopefully with a few leads from BP or elsewhere)? I am struggling with trying to contrast the increased effort/time associated with setting things up on your own (with the promise of securing more value) VS relying on a turnkey team and purchasing a property at list price. My focus is on cash flow and I see appreciation, at least in the short run, as simply a bonus. Thanks for sharing your experiences.

I spoke with an investor that owns about 15 properties in and out of state. In her experience, there are tiers of rent in which you would be more likely to collect each month. These don't necessarily always focus on lower income renters in rough neighborhoods. For example, market A rents under 500 are more likely to be collected than rents 500 - 700. However, when you start getting in to the 1200 range they become less likely (i.e. Middle class folks overextending themselves by buying too many toys). Obviously these would be unique to each market and would depend highly on the tenant screening process. However, do you believe these "sweet spots" exist in your market and if so did you use them as one of the factors in choosing a property?

Thanks, Michelle. Sometimes the sarcasm doesn't come across in a forum message or email and I am glad you picked up on it.

I have family in Kelso. Beautiful down there. There are some great outdoors activities down there a stone's throw away from you.