All Forum Posts by: Will Pritchett

@Antonia Bokelman rental demand is strong in the rentals between 850 and 1400 dollars per month which is the space we invest in. A rental that was sluggish to rent last year had 40 inquiries in three days this year. We’ve never had problems getting rentals filled over ten years of doing this business and I don’t expect that to change with the growing population here. Of course finding deals is tough lately due to the prices running up in this seller’s market but if you can find some and keep them maintained, you will be able to rent them.

Best of luck!

@Adam L. I didn’t see that sale price. Where did you find it? Wholesaler?

@Adam L. I’ve seen this deal (I believe it’s the same one). The condo structure is what concerns me as well. As other posters mentioned, it’s out of your control. I would venture to say it’s a C or C minus property with no changes in the area on the horizon. I don’t know your experience level but it could be challenging from afar (or nearby). Not to discourage you on it.

I just like control too much, perhaps. If it was just an apartment building I would find it more interesting as well.

Best of luck and if you take it down, let us know how it goes and hopefully that we were all overly cautious.

Take care,

Will

@Todd Carpenter I would try some

Commercial lenders. Might be shorter term on the loan but mine does loans sub 100k. Good luck.

@Sherry McQuage 1) there’s never a perfect time to buy. Sometimes when prices are cheap, money is scarce (from traditional sources). When I get concerned that we’re buying at the “top” of the market my wife reminds me we have been doing that since we started this journey and would have never started If we’d listened to those claiming a crash around the bend (every year for the last eight!). 2) take advice from successful people. I listened to naysayers with very little experience, If any. Most propagated legends of nightmare tenants that they had never experienced. 3) I would scale up to multi units sooner. 4) Private money is like gold and the more you use it the more appears. Learn how to use private money.

Happy Thanksgiving!

@Christopher Oliva good advice here. What city are you in? Is this pier and beam or concrete. I have had some major foundation repair jobs done in San Antonio. PM me if you need a contact in SA. I think this is just part of the game in Texas. I agree with others to act early rather than later as it will likely worsen. Catching it before plumbing is involved (if concrete) can save a lot of money on tunneling.

Best of luck!

Great question. It is a big consideration and one reason we don't buy at ARVs above about 160K for single family rentals. It's a big bit into cash flow. For those of us living in Texas, we don't have state income tax so that is a small consolation. For those of you in state income tax states, I'm not sure how that works but I would think you'd get taxed again on your income in California??? As our values increase here the taxes follow suit and cash flow drops.  We've sold a few that appreciated into anemic cash flow as taxes outpaced rents. We reinvested at lower price points. Generally we see less appreciation in these cheaper houses but if cash flow is your goal, that can be an acceptable trade-off. 

I hope this helps. It is harder to buy deals that cash flow these days but the DO exist. Best of luck!

@Tyler D'Alessandro the previous replies give an interesting perspective from the seller’s perspective. I would be curious why agent and seller are taking less than market price for a property in this hot seller’s market. There could be a reasonable explanation. Your agent may not be buying now for personal reasons. Your agent may also buy only at bigger discounts than this. The agent may have an intermediary structure where he or she benefits by representing both sides of the transaction making it an easy, fast, above average commission for them.

I would just ask outright what the motivation is to sell at a discount. It is a very reasonable question. Also, on or off-market deals can work. Don’t let the term “off-market” distract you from underwriting the deal yourself. In the last few years we’ve bought a lot of off-market properties and only one on-market so I don’t mean to minimize the value off-market deals potentially.

You are wise to ask the question. Best of luck to you.

-Will

@Jessica Schenk congratulations for starting young and having some savings already! I think there is a lot of great advice here to consider. I'd especially pay attention to your budget and keep your personal finances in order. It sounds like you are saving money already. If I was starting over, I'd probably start with house hacking. Flipping and BRRRRing is a lot less stressful when you have some cushion in the bank account. Also, having some capital to put into projects can lower the LTV for private lenders to help offset the risk for them lending to a newer investor whenever you do get into those strategies.

Best of luck,

Will 

Hello Christopher,

    Thank you for commenting. We love to talk to other firefighters and educators to let them know it is possible - and it is! Although I haven't invested out of state, I would think starting to narrow down potential markets would be a great start. I'd also read the BP book on Long Distance Real Estate Investing by David Greene. He's also from California but invests out of state. 

    I'd read everything the BP puts out and listen to podcasts constantly but pick a niche and an area and get good at one strategy before diversifying your energy in too many directions. We document our journey on a blog and facebook to share the lessons we're learning and to help others get started. This is also our "resume" of sorts to attract private lenders and support our credibility. The first deal is the toughest but they get easier with each subsequent property. Private money was a game-changer for us. Learn about it. 

    I also think personal finances need to be in order to grow. If someone has struggles in personal finance, I don't think real estate often solves them. I started with Dave Ramsey and still use very little personal debt but use a lot of debt in our business. We've developed our own strategies but we owe a lot to his initial teachings to get a handle on our finances.

    DM me and I'll send you some links and resources. BP provides a ton of free information. I also attribute a lot of our success to networking. We networked pre-covid in person but now virtually. I would consider joining REIAs or meetup groups in the markets you are interested and see if they are meeting virtually. This could be an opportunity that might not have existed before to get to know the investors in an area. Most of the groups we attend are very collaborative and share information freely.  Sometimes they'll have a "haves and wants" period where wholesalers will pitch deals they have under contract.  We've bought deals from these wholesalers on occasion.

     Ultimately, you can make money in a lot of strategies but we love single-family rentals at this stage of our game. I hope this is helpful. 

Best of luck,

Will