All Forum Posts by: Rich Weese

Elliott Back,

I assume you know the Grand Prairie, Texas area well and feel it is a good area to invest in. I purchased an apartment building several years ago and it has been amazing to me how much I have been able to increase the rents. I am out of area owner and travel a lot direction once or twice each year to check building and also other property in the area I on.

I have been around the block many times through different decades. I disagree with the automatic answer that a college degree will always be the best method. I have seen too many college degrees that proved useless in that particular field and at one time I believe over 50% of bartenders had a college degree. I don't think it is fair to just make a blanket, that college degrees are always the best way to go. I have personally known people that have gone into businesses of their own or made much more than $100,000 per year on the trades they learned

.If someone is talented and good, he or she will succeed in what ever the business is where they decide to enter in.

Cars are just big boy toys! I have a Lamborghini but it was not a fancy one. It was a 1974 Jarama. Kind of ugly. A guy from France saw my ad on it and came and purchased it for cash. It was shipped back to France where he has a museum of Lamborghinis and Ferraris. His goal was to have one of each model ever built and needed this one. He was very interesting and a fun story.

I have a Hennessy venom Dodge Viper with a Paxton supercharger. (772 hp) I have owned it for 14 years and it is too fast for me now. I recently purchased a C7 Corvette Z-O2. It is still 650 hp and very simple to operate and drive. I had told my wife I would sell the Viper but that hasn't happened yet.....

I just finished reading this thread and all 215 posts. It caught my attention because it reminded me of my early days in real estate. I have no reason to doubt the authors information and want to congratulate David Zheng personally for what he accomplished.

My reason is because he retired one year sooner than I did! I have not been very active on bigger pockets over the past number of years but was very active in the early days and even spoke at the Bigger Pockets convention in Denver Colorado. I don't know who the boss is at this time, but it was Josh Dorkin. My wife and I even helped Josh and his wife put all the information packets together the night before the convention started. I don't remember the title of my presentation but it basically covered things I had done to retire by age 29. I even wrote a book with the specific methods and specific addresses ( as several posts have asked David to do) included with photos of properties I bought to help start my empire.

I can assure you it can be done and has been done by multiple investors. I explained in the Denver Convention through my PowerPoint presentation that I had retired at age 29, owning a considerable amount of real estate and having $1,600,000 in notes owed to me at interest rates from 10% to 12% annually  providing nearly 200K annually in 1980 without working. I did retire and moved from Southern California to Southern Oregon to be self-sufficient and raise kids and cows. I did not have a Lamborghini at that time, but had already owned three 930 Porsche Turbo Carreras and owned three different airplanes at the same time. Cessna 152, 172 and 310 twin engine for my wife to fly.

I believe there was a tape or a podcast that had all the presentations from that convention. It would be easy to verify the information I am communicating here. I only chose to post this lengthy explanation because I had the same type of criticism as David Zheng and wanted to explain it can and has been done by others. I handled the criticism then and can handle it now, if necessary. Unlike David, I do have hundreds of posts from years ago on bigger pockets explaining how this was done and can be done again by others.

I hope to get slightly more involved in replying to threads and posts on Bigger Pockets. Retirement has a lot of different definitions. I continued to purchase real estate after moving to Oregon and have now owned over 1000 single-family residences and thousands of apartments, and 10 cows. I am truly winding down now. I believe it is still possible to find a thread I posted on bigger pockets several years ago where I was selling by owner 156 units in Garland Texas. Bigger pockets brought me several different offers to consider and I sold the property for $8,750,000 after purchasing a few years earlier for an amount of $4,275,000. I have also sold many single-family residences but still own a combination of over 300 doors. (houses and apartments) I am currently in a cash position and may purchase properties again if a crash happens in the marketplace.

Congratulations to all that have been involved with Bigger Pockets. I see things from Mr. Turner, Mr. Scott and Mr. Splitrock on regular emails as well as a few others. I don't know if Josh ever anticipated getting to the size it is now but congratulations to him also if he is still around.

I'll see you on the board sometime! I plan on taking a look at it more often.

Rich

the name for this type of funding is transactional lending. I did it a few years ago and it was not worth the energy and the problems that were created by questionable investors.... I agree with the other posts. Run the other direction and find some other strategy.

Ronak,

I had a previous post in this thread that explained the major reason I went to multi family from self storage. I could use the same amount of funds, make the same amount of cash flow or more, and have some of that cash flow offset by depreciation of an apartment building. There is very little depreciation on self storage facilities but they are certainly a good cash cow.

I disagree with some of the previous posts where various BP members have stated they are just like apartments. If you look at my previous post, when real estate is not selling, no one needs storage facilities. When real estate is selling, buyers and sellers seem to have a demand for extra storage space. That was what occurred with the building I bought in Bonita Springs, Florida. 55% occupancy on acquisition because the real estate market for homes was dead. That is not a good time to raise rents or try and find new tenants. They don't just materialize automatically.

I do agree that storage facilities are much easier to manage, but in my opinion, that benefit is offset when it comes time to sell. There are probably 100 – 1000 more buyers looking for apartment complexes then are looking for self storage facilities. There is not much you can do to improve a self storage facility. You can paint the exterior, improve the landscaping, and change the signage. That doesn't give you much value add potential to present to a buyer. I was happy with owning it, but the real estate I acquired through the 1031 exchange has been off the charts in return. I receive offers on a regular basis of nine to $10 million in sales price for properties I paid 6.2 million and 6.4 million for several years ago.

I'm sorry I punch the wrong button. I didn't mean to vote for the post about my book. I was just trying to check and see loaded so I might think that person. Moderators, feel free to delete my vote if necessary.

Thank you Mary Jay. I'm glad you enjoyed my Book.

Great luck always.

Rich Weese

@Colton C.

Steve posted my name so I think I should enter into the discussion. I disagree with some of the suggestions and thoughts that other posters made. I guess I'm a contrarian point of view most of the time. I'm sure there are some threads on here where I have already mentioned this but there are so many new members to bigger pockets let me mention once again what I chose to do.

When the last of six children finally left home, my wife and I were gone the next day to become full-time RV ers. We owned a motorhome and began traveling the Western states and western provinces of Canada. We noticed there were a ton of travelers from South Dakota and Texas. We understood Texas but did not understand South Dakota. After doing some research, we discovered that South Dakota has a very beneficial option for those that want to "domicile"there. They have no state income tax and their fees for vehicles as well as auto insurance and health insurance are extremely low.

To qualify as a resident of South Dakota, one needs to go to the state, stay in a motel one night and go to the Department of Motor Vehicles the next morning. You present them your receipt from the motel which shows you were a resident and you obtain your driver's license, and a state identification card.

You then apply for an address in Sioux Falls and receive a post box, a telephone number and your physical address. The drivers license needs to be renewed once every five years which means one night in South Dakota every five years. We renewed this three different times and used it to save a great deal in state income tax as well as other fees. We found there are thousands that do the same thing. There is also a location in Texas that provides the same service and either of them will forward your mail to wherever you want it sent.

While traveling for six years, we found several places we really enjoyed being during certain months. One was in Casagrande Arizona and the other was in Eureka California ( Redwood country). We determined to buy a home in each of these locations in a mobile home community and went to them during the best weather of the year in each.

Even though I retired at age 29 and have explained that both in my book and on Bigger pockets, it did not hurt my ego to stay in something for a lot less than $850,000! I had immediate neighbors in both locations that oversaw my homes when I was not there.

I don't understand your requirement to live in California if you are considering other states. If you want to be able to drive to both in-laws homes, and not spend a ridiculous amount of money for a home you will not be in much of the time, I have explained how it can be done.

If you have other questions, feel free to ask. Congratulations on achieving the position in life you have already achieved.

@Mary Jay

I think you have a lot of great replies to your questions presented. You seem to have some very high expectations and they will be very difficult to achieve in the period of time you are looking at.

I don't want to tell you that it is impossible because it can be done and has been done by some. I think I explained to you in a previous email that I was lucky enough to be in the right place at the right time and was able to go from zero to retired in seven years. This is covered and outlined in a book I wrote years ago. I want to repeat, I was lucky and I worked day and night and had some other benefits as I have mentioned before. Obtaining my real estate license and then a broker's license in California and Colorado definitely sped up the process As well as serving as general partner for many syndications.

Here are some thoughts I had in answer to your questions and also in regards to other replies you have already received.

Does your son have a job and help with his financial planning? If not, I feel you are leaning too hard on being an enabler, which is never good in my opinion. Is he going to be contributing to the automobile and his college financing? I believe a community college is a great way to start and I used that partially in my early days.

You need to work on a very poor trait that you currently admitted to having. If you are not very good at saving money, you will never achieve the goals that you are expecting, in my opinion.

I have never felt that Cheap houses are really cheap. The appreciation is next to nothing, the depreciation is very little due to the value being in the land, and the expenses for management and maintenance are always high. I also personally prefer to stay completely away from condominiums as they are never truly free and clear due to special assessments that are always lurking on the horizon. I have always practiced what I preach. Owning over 1000 single-family residences In my lifetime, I can only remember two condominiums.

The suggestion to purchase a four Plex and live in one of the units using FHA financing was a good one. The first property I ever purchased was a duplex in La Habra California On an FHA 221D-2 program and it later became my first fixer-upper and my first property exchanged! Great story and is somewhere here on bigger pockets as well as related in my book.

It was much easier to assume loans in the old days and there was no limitation on how many loans you could finance. I would assume you have done your homework to verify that you have the ability to qualify for more than one additional property. It seems to be much more doable when you are occupying all or part of the property as the owner.

You have received some great replies to your original email and I have voted for several of them. My two favorite ones were from Shiloh Lundahl and Steve Vaughn!

I wouldn't vote for any one of your three options but rather try to use a part of each one. It will be much easier to try and obtain financing while you are still working. A combination of single-family residences and multi-units is what most successful real estate investors have done. It seems to come naturally. The movement from single-family to small multi family to large multi family is the path that I took.

There are also additional opportunities you may desire to use to help the process. Many posters on bigger pockets have gone the route of starting their own management firm to share the expense and also build speculatively or your own home. Tax benefits can be enormous in your estate planning. One of those is to have the flexibility of moving every two years and having a capital gain free and clear.

Good luck and I would reread all the replies you have received. There are some excellent points you have been given.