All Forum Posts by: Zach Adams

Congratulations on you deal Jon. Way to persist. I'm hoping to get into multi-family in the next year or two. Closing on my second SFR next week. Hope it goes as smoothly as yours!

Zach

Originally posted by @Joe Bertolino:

Read Bill's post... Sleep on it and read it again. If you have no cash or credit... you should address those issues before trying to take down a multi unit property. The chances of you wondering into a good or even average deal in this situation is slim at best. The chances of crashing and burning are much higher. Be patient, educate yourself and get your financial house in order.

 Joe hit the nail on the head.  Save up capital.  Get your elephant gun ready.  Your first deal will most likely be much better with a down-payment, instant equity, and good cash flow right off the bat.  Keep it simple!

Originally posted by @David Whitehair:

Ive been on the site for a few months now reading and researching different things.  Ive been working with a realtor the last couple weeks to finally nail down my first deal.  I bought about 3 years ago, in an ok neighborhood for a fairly good deal.  We are going to rent out our current home and buy another owner occupied home with the intent to rent it out in the next year or two after we have some experience in the landlording area.  When I explain to friends and family I get negativity to the extent of well you dont have any experience or you dont know how to work on a house or this and that, but everything being its a bad idea to do this.  My wife and I are in a position to where we could cover both mortgages in the case of not having a tentant.  

M question is how to get over this negativity that everyone seems to possess when it comes to being a landlord.  I feel that this move is going to in the future give my family and I a better future and more freedom.

Ill be more than happy to answer any questions that will provide better answers to my question

Thanks guys and gals.

 Pay them no mind as your passive income rolls in.

Originally posted by @Brian Huber:

Hi, I've read a ton on this site about buy and holds and how you can't just rely on the numbers or the 2% rule and so on.

At this point, I have analysis paralysis on this subject. Just what is a good deal?

I've heard:

-$30K homes are bad because of depreciation and low quality tenants

-Media price homes have better tenants but because of the price, cashflow could be thinner

I'm at a loss on how to recognize a good buy and hold deal.

Can you perhaps share an example of a buy and hold you have that's a good deal? As far as grade neighborhood, cap rate, cashflow etc.?

Any help would be great. Thanks!

 I don't see the 2% or even 1% rule in the area I invest very much (north Atlanta).  But it all depends on your goals.  What kind of cash flow are you looking for each month? How many properties do you aspire to hold?  Long-term plan?

At this early point of my RE investing career, I gravitate towards what I know, and that's single family homes in the $120-150k renting for $1100-1300/mon. Maybe one day I'll get into distressed properties and hope to learn more as I go. I use a PM and am not involved with tenants, screening, etc. Very hands off as I have a 9-5. I'm comfortable with $250-400/month/door. Cap Rates are just below 7%. Some people won't touch CAP rates this low, but for me, that's what I see in the area that I know and understand.

What's the long-term growth of the city and neighborhoods? Are there people and corporations moving there?  I'm not suggesting a socio-economic dissertation, but just some broad understanding of the area.

Also, use greatschools.org to see what schools are in the area.  Very important.  

Hope this helps -

Zach

Wow. I've read all the posts to this point! Great thread. Personally for me, I use leverage. I'm 35 and am willing to take on any risk associated with leverage. I'm a REI and assume that most of the other REIs use leverage, certainly starting out.

I do the math and am maintaining $25k reserves (which will grow proportionally with my portfolio).  I have plans for financial independence by 40, and since I didn't start in my 20s, leverage is a key component.  $4000/mon cash flow is my goal.  I like the discussions about leverage early and cash later.  That makes sense to me.  If all goes to hell, I still have a 9-5 that pays well and a degree in chemical engineering.  

RDPD for me helped clearly define an asset and path of money, cash-flow (poor vs wealthy), PAYING YOURSELF FIRST.  I didn't walk away from that book thinking about getting leveraged to the hilt.

I can't speak to DR, but to me it seems like Finance 101.  Live below your means, stay out of consumer debt.  Are there a bunch of Ramsey-ites out there that are financially independent from his teachings? I'm asking.

My question to the cash-camp: where did you get the cash for your first deal and how long did that take?

Zach

Originally posted by @Robert Snell:

Originally posted by @Zach Adams:

Originally posted by @Robert Snell:

Hi,

My name is Bob Snell, and I'm new to Bigger Pockets. I remember coming to the site several years ago, but didn't really stay. This time around it's really captured my imagination. I'm new to REI, but very interested. Currently employed full-time at San Diego State University, and want to gradually get into RE. Particularly interested in starting out with wholesale deals, and then moving into flipping. My short-term goal is to work up to a deal per month. Would be happy to meet up with anyone in San Diego and chat about the business and what you are doing. Hope to be able to contribute some meaningful content or inspiration to the boards soon. Looking forward to exploring the world of real estate (and hopefully making some money as well).

I've lived in San Diego for 3 years and think it is paradise. My idea of a perfect location. Housing is astronomical, but the 75 degree weather year round is hard to beat. Love the scenery, the feel of the city and the people. Very happy to be here and would like to start working some real estate deals soon.

Look forward to hearing from anyone else out there.

Bob

 Welcome back!  A deal a month sounds intense, but good luck! I live in Oceanside, but invest out of state in SFRs.  

Zach

 Zach,

Thanks for the welcome to BP. A deal a month is ambitious, and a long way down the road. We'll see how it goes. Where do you invest out of state? Do you find that easier?

Bob

 Bob- I invest in Atlanta right now for two reasons: I'm originally from there and know the area and property values/rents make for pretty good cash flow with some potential for appreciation.  I'm definitely going to look at other cities (mid-west, PA,OH,IN) down the road for cash flow deals.  I'm looking for a duplex to purchase here in San Diego county to live in, but other than that I do not see myself investing in SoCal RE for quite some time.  I know there are deals out there though.  

Zach

Originally posted by @Neil Aggarwal:

Banks come up with very strange criteria.  There is no way to understand the reasoning. I hope they back off it, but you still have time to look for another lender.

 Thanks Neil.  Hopefully tomorrow will shed some light on it.  Closing on the 30th of this month, do you think there's still time to find another lender?

Zach

I'm closing on the 30th on another SFH and was reading over some documents today and noticed that my lender (30yr 4%) says the maximum contribution at closing from the seller is 2% of PP or in this case $2700. I'm pretty upset because I negotiated the seller to pay all the closing costs, up to $4600. Closing costs are estimated at $4500. Has anybody seen this before? I told the lender how unhappy I was about this. They're working on a resolution. Why would a lender care who's paying closing costs? Zach

Originally posted by @Franklin Romine:

@Zach Adams

Very informative. I like the idea of keeping multiple properties on the radar, free and clear, and on the MLS 90+days. Do you have the listing agent notify you if it reaches a certain timeframe, say 120 days or do you stay on top of the age of the listing? Just weighing how much work you do versus how much work the listing agent will do.

Zach

Originally posted by @Robert Snell:

Hi,

My name is Bob Snell, and I'm new to Bigger Pockets. I remember coming to the site several years ago, but didn't really stay. This time around it's really captured my imagination. I'm new to REI, but very interested. Currently employed full-time at San Diego State University, and want to gradually get into RE. Particularly interested in starting out with wholesale deals, and then moving into flipping. My short-term goal is to work up to a deal per month. Would be happy to meet up with anyone in San Diego and chat about the business and what you are doing. Hope to be able to contribute some meaningful content or inspiration to the boards soon. Looking forward to exploring the world of real estate (and hopefully making some money as well).

I've lived in San Diego for 3 years and think it is paradise. My idea of a perfect location. Housing is astronomical, but the 75 degree weather year round is hard to beat. Love the scenery, the feel of the city and the people. Very happy to be here and would like to start working some real estate deals soon.

Look forward to hearing from anyone else out there.

Bob

 Welcome back!  A deal a month sounds intense, but good luck! I live in Oceanside, but invest out of state in SFRs.  

Zach