30k plus profit in D area flip? Possible?
Well, here we go folks, I’m ready to lay this to bed once and for all. For years I’ve read from B and A class investors, others trying to scare me off of buying and renovating D class properties. They’d write, “It will never appreciate.” And... “It is worth 20 grand today and it will always be worth 20 grand.” Yada Yada. Today we put this all to the test...
My year long section 8 tenant is moving out this weekend, her lease is up at the end of the month. I called my realtor and said I would list the house with him while we look for another section 8 tenant paying $795 a month if he could get me a crazy number like 50k. I bought the house roughly two years ago for 19k and did a 10k renovation. It is near a major University on the edge of a rough area. After looking at comps, understanding our renovation, my realtor said he is comfortable at 66k, but can push it to 69k.
It feels great to hear those numbers, I’ll report back if I am in fact the genius I always hoped I was. To my never buy in rough area naysayers, I have nothing to report yet, but I’m putting you on notice that pigs are going to fly on this one.
Amazing @Jonathan R.!!! Super inspiring and just exemplifies that the reward (regardless of the type of work you're doing) is not always only monetary!
Originally posted by @Jay Hinrichs:@Jonathan R. nice post its nice to see a departure from the kick the low life out right now mentality @Dennis M. working with people in their lives can be as rewarding and creating income through the rental process.. I know most folks on this site will say your in a business take emotion out of it.. or your not running a charity etc etc.
but charity can start at home.. and we can give back if we choose to.. One of my partners is a very giving guy.. And we were having dinner at one of his buildings downtown PDX he owns seven story building he totally refurbed and the ground floor tenant Is a restaurant.. Anyway he goes on to tell me one of his units he does not collect rent on because he really likes the lady living in it and she cant afford rent :)..
So as we mature as investors and start to give back you can do it in the form of rental payment forgiveness if you like.. nothing wrong with that.. Although most investors on this site are NUMBERS driven and the thought of giving up any income would be very contrary to them meeting their goals of financial freedom.. which being a landlord to me is a business its not financial freedom.. you still have to work for your money in some manner.. But anyway I know how others who have worked a W 2 would consider being self employed landlord financial freedom..
its nice to have a good amount of Karma in your Bucket.. !!!
Thanks for your reply, Jay! It’s really cool to have you on this thread.
Yes, landlording is active, I’m more active than most even I suspect. Though, I feel I can run and hide if I want to for a good long period. Not having to rely on a paycheck I suppose I mean. My goal is at least 6 revenue streams (as close to passive as possible) in the next seven years or so. It will all have been built on the foundation of low income housing. I second and third guessed myself for awhile, hard to be convinced otherwise that owning in areas most other investors shy away from can be lucrative.
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Originally posted by @Jonathan R.:Originally posted by @Jay Hinrichs:@Jonathan R. nice post its nice to see a departure from the kick the low life out right now mentality @Dennis M. working with people in their lives can be as rewarding and creating income through the rental process.. I know most folks on this site will say your in a business take emotion out of it.. or your not running a charity etc etc.
but charity can start at home.. and we can give back if we choose to.. One of my partners is a very giving guy.. And we were having dinner at one of his buildings downtown PDX he owns seven story building he totally refurbed and the ground floor tenant Is a restaurant.. Anyway he goes on to tell me one of his units he does not collect rent on because he really likes the lady living in it and she cant afford rent :)..
So as we mature as investors and start to give back you can do it in the form of rental payment forgiveness if you like.. nothing wrong with that.. Although most investors on this site are NUMBERS driven and the thought of giving up any income would be very contrary to them meeting their goals of financial freedom.. which being a landlord to me is a business its not financial freedom.. you still have to work for your money in some manner.. But anyway I know how others who have worked a W 2 would consider being self employed landlord financial freedom..
its nice to have a good amount of Karma in your Bucket.. !!!
Thanks for your reply, Jay! It’s really cool to have you on this thread.
Yes, landlording is active, I’m more active than most even I suspect. Though, I feel I can run and hide if I want to for a good long period. Not having to rely on a paycheck I suppose I mean. My goal is at least 6 revenue streams (as close to passive as possible) in the next seven years or so. It will all have been built on the foundation of low income housing. I second and third guessed myself for awhile, hard to be convinced otherwise that owning in areas most other investors shy away from can be lucrative.
As long as you understand what your investing in .. do not hand over to 3 p management and limit to no debt this can work just fine its mom and pop landlording at its root.. where people get in trouble with these assets is too much debt and PM over head kills them.. and then there is no exit although it appears you have an exit.. did you actually close one for the 60k.. I find listing stuff in the mid west and actually selling are VERY different things/ and bottom line numbers..
Originally posted by @Jay Hinrichs:Originally posted by @Jonathan R.:Originally posted by @Jay Hinrichs:@Jonathan R. nice post its nice to see a departure from the kick the low life out right now mentality @Dennis M. working with people in their lives can be as rewarding and creating income through the rental process.. I know most folks on this site will say your in a business take emotion out of it.. or your not running a charity etc etc.
but charity can start at home.. and we can give back if we choose to.. One of my partners is a very giving guy.. And we were having dinner at one of his buildings downtown PDX he owns seven story building he totally refurbed and the ground floor tenant Is a restaurant.. Anyway he goes on to tell me one of his units he does not collect rent on because he really likes the lady living in it and she cant afford rent :)..
So as we mature as investors and start to give back you can do it in the form of rental payment forgiveness if you like.. nothing wrong with that.. Although most investors on this site are NUMBERS driven and the thought of giving up any income would be very contrary to them meeting their goals of financial freedom.. which being a landlord to me is a business its not financial freedom.. you still have to work for your money in some manner.. But anyway I know how others who have worked a W 2 would consider being self employed landlord financial freedom..
its nice to have a good amount of Karma in your Bucket.. !!!
Thanks for your reply, Jay! It’s really cool to have you on this thread.
Yes, landlording is active, I’m more active than most even I suspect. Though, I feel I can run and hide if I want to for a good long period. Not having to rely on a paycheck I suppose I mean. My goal is at least 6 revenue streams (as close to passive as possible) in the next seven years or so. It will all have been built on the foundation of low income housing. I second and third guessed myself for awhile, hard to be convinced otherwise that owning in areas most other investors shy away from can be lucrative.
As long as you understand what your investing in .. do not hand over to 3 p management and limit to no debt this can work just fine its mom and pop landlording at its root.. where people get in trouble with these assets is too much debt and PM over head kills them.. and then there is no exit although it appears you have an exit.. did you actually close one for the 60k.. I find listing stuff in the mid west and actually selling are VERY different things/ and bottom line numbers..
Yes, for sure, we don’t mind self managing. I’ll still have a handful of others if this one sells. I suspect it will but hasn’t yet, we aren’t too worried about it as it’s priced at market. We are about to reduce it to 66k, stuff has been selling like crazy in this type of range. No worries either way, it just feels good to be kicking some butt. :)
@Jonathan R. if your disabled tenant or his family needs any tips on how to navigate KS Medicaid I'd be glad to help. We specialize in that for AL -- just takes some time - if he really is close to end of life there are a lot of services that are available to him or even if he needs help in home - lots of things he can get to help him. Being 65 makes it a bit easier to get those services in KS. Anyways I think you may have my cell or email.
(Also cool post today... kind of similar to how I feel about our AL business. We're not as stressed about money since the business works and we are able to maintain the same standard of living we had before....which was pretty basic -- pretty damn basic - even downsized houses and live in a dated one from the 70s with 70s windows - but I dont care because I'm happy with what I'm doing and our residents appreciate the small things -- headaches in different ways but the freedom I feel - can't put a price on that)
@Jonathan R. your outlook on investing and life is heartwarming. I hope that the majority of us feel as you do. It’s definitely important to give back to the community when we have the capability to do so. Please share more of these types of stories! It’s great for the community and a good influence on the rest of us. Keep up the great work! Also, I’ll be ending my MBA this December and coming out of command too so my time schedule will free up significantly. I still need to see one of your projects!
Originally posted by @Jonathan R.:Well, here we go folks, I’m ready to lay this to bed once and for all. For years I’ve read from B and A class investors, others trying to scare me off of buying and renovating D class properties. They’d write, “It will never appreciate.” And... “It is worth 20 grand today and it will always be worth 20 grand.” Yada Yada. Today we put this all to the test...
My year long section 8 tenant is moving out this weekend, her lease is up at the end of the month. I called my realtor and said I would list the house with him while we look for another section 8 tenant paying $795 a month if he could get me a crazy number like 50k. I bought the house roughly two years ago for 19k and did a 10k renovation. It is near a major University on the edge of a rough area. After looking at comps, understanding our renovation, my realtor said he is comfortable at 66k, but can push it to 69k.
It feels great to hear those numbers, I’ll report back if I am in fact the genius I always hoped I was. To my never buy in rough area naysayers, I have nothing to report yet, but I’m putting you on notice that pigs are going to fly on this one.
Jonathan,
I was able to make NOT $30K on a property in a D area but MORE than $1 MILLION.
48-unit apartment building in D area which is 80%+ vacant, filled it up with tenants (in a creative way) and got 100% occupancy of guaranteed rent. Sold it 6 years later and made over $1 MILLION. Here's how I did it:
https://www.biggerpockets.com/forums/311/topics/644570-how-i-made-over-1-million-on-1-deal-after-6-years-of-headaches
Originally posted by @Michael Ealy:Originally posted by @Jonathan R.:Well, here we go folks, I’m ready to lay this to bed once and for all. For years I’ve read from B and A class investors, others trying to scare me off of buying and renovating D class properties. They’d write, “It will never appreciate.” And... “It is worth 20 grand today and it will always be worth 20 grand.” Yada Yada. Today we put this all to the test...
My year long section 8 tenant is moving out this weekend, her lease is up at the end of the month. I called my realtor and said I would list the house with him while we look for another section 8 tenant paying $795 a month if he could get me a crazy number like 50k. I bought the house roughly two years ago for 19k and did a 10k renovation. It is near a major University on the edge of a rough area. After looking at comps, understanding our renovation, my realtor said he is comfortable at 66k, but can push it to 69k.
It feels great to hear those numbers, I’ll report back if I am in fact the genius I always hoped I was. To my never buy in rough area naysayers, I have nothing to report yet, but I’m putting you on notice that pigs are going to fly on this one.
Jonathan,
I was able to make NOT $30K on a property in a D area but MORE than $1 MILLION.
48-unit apartment building in D area which is 80%+ vacant, filled it up with tenants (in a creative way) and got 100% occupancy of guaranteed rent. Sold it 6 years later and made over $1 MILLION. Here's how I did it:
https://www.biggerpockets.com/forums/311/topics/644570-how-i-made-over-1-million-on-1-deal-after-6-years-of-headaches
You’re crushing it, I am aware of you from this original post, we chatting on a post I think a year or so ago. I see a vacant apartment complex, one that completely fits that description, I’d like to inquire about in my area. Your slam dunk was an arrangement with the agency that helped place tenants. All of my stuff is Section 8, so I supposed it could fill, but it would take some time to place for sure. Good luck! Thank you so much for posting, sir!
Originally posted by @Jared Viernes:@Jonathan R. your outlook on investing and life is heartwarming. I hope that the majority of us feel as you do. It’s definitely important to give back to the community when we have the capability to do so. Please share more of these types of stories! It’s great for the community and a good influence on the rest of us. Keep up the great work! Also, I’ll be ending my MBA this December and coming out of command too so my time schedule will free up significantly. I still need to see one of your projects!
Congrats on your MBA at Wichita State (coming Dec.)!!! I was unable to get into that program because my undergrad gpa was not high enough, now I went on to 4.0 an MBA program at Baker and carry four addition A grades on my first four classes toward an MAOL (just to gain addition credits to teach and learn, my employer has 100% reimbursement program up to $5250 a year) so I’m not joker of a student, your program is certainly excellent; tough to get into. I’m proud of you. Keep working that W2 and selling real estate on the side, I did that for many years (5 maybe), push hard, save 20k and get a Home Depot or Lowe’s card and get in this local real estate game as a investor asap-:) You’re awesome, your local perspective is always called upon and so much appreciated. Reach out anytime and I’d love to show you all my properties. Cheers.
Hey Jonathan, I started a thread about "Investing Rules I violated and Made Money". It's related to this thread but I want to expand it. Care contributing to it?
Here's the link bud:
https://www.biggerpockets.com/forums/432/topics/763669-investing-rules-and-times-you-violated-them-and-made-money
Originally posted by @Jonathan R.:@Jared Viernes @Shardae Robinson @Jimmy Dang @Jason Lavender @Shane H. @James Galla @Dennis M. @Melody Kushi @Caleb Heimsoth
This has been an interesting couple months for me and I want to share my ending revelation from all this. Perhaps this is a topic of its own but I figure I’ll share here. For me, this is all bigger than money. One of my disabled Section 8 tenants (he’s been with me the whole time, cool dude) had a stroke and was in the hospital for a month. His sister apparently flipped a switch or something on his refrigerator during his hospital visit and all his food spoiled. I was there last week with my contractor, my tenant didn’t realize apparently how bad his house stank, so we aired out the whole house and sprayed the fridge and put baking soda in there to help the smell for 30 days or so. The quality of this man’s end of life will be drastically impacted by my company, big responsibility.
I volunteer coach 5 soccer teams and while congratulating one of my players, I noticed his teary eyed mother, whom I have come to know at a distance over the last few years; I immediately asked the matter and she quietly let me know they were living in a hotel and were officially homeless, she said her mother hadn’t spent the rent and bill money wisely. I asked her to call me if they get to where they need to check into a shelter and I may be able to place them in one of my properties, she appeared open.
I’m proud of what we (my wife and I) have accomplished in the last three years. Financial freedom is tough with rental properties, it’s crawling to financial freedom. I’ve learned to be okay living with next to nothing in order to be able to invest in areas of the city that need investment. Now that I’m probably 3/4 or so to fi, I don’t care about materialistic things anymore (my wife and kids might), I’m concerned with providing a job for my contractor, an amazing home for a 65 year old minority man, a place to go for a struggling 8 year old soccer player and his mother, painting graffiti off dilapidated houses in areas that need leaders etc.
This house may sell for a great profit, at which I’ll roll every dime into more properties, but this is bigger than me. Removing blight, facing injustice, working hard, rewarding others, being bigger than one’s self. To my BP friends, please keep spreading the word of financial freedom, it’s bazaar how you feel when you get closer and closer. Life for me is about beginning the transition from being selfish to selfless. Thank you for your friendship.
beautiful story and it is extremely motivating. Being in the position of helping a family in need must be a tremendously good feeling. Not only are you helping out that family but you are taking time to mentor these kids in soccer. I love it. keep it going! you will have a big impact on these kids lives.
Johnathan this was Very Noble of you and don't feel bad about the D areas of investing. All of my properties I own are in C/D areas of STL and I have some great tenants. I grew up in areas like these and I know first hand there are good people in those areas and unfortunate they just dont make enough to be in A class areas its not to say you cant make money in those areas because you can and attract the right people and for your noble deeds you done will build your reputation around the area where people will be beating down your door to rent and even would want to buy a property from you. I know first hand because I have done some noble things for my tenants and you be amazed on what tenants will do in return to show their appreciation. You will make a great profit! Cant wait to hear more stories
Originally posted by @Jonathan R.:@Jared Viernes @Shardae Robinson @Jimmy Dang @Jason Lavender @Shane H. @James Galla @Dennis M. @Melody Kushi @Caleb Heimsoth
This has been an interesting couple months for me and I want to share my ending revelation from all this. Perhaps this is a topic of its own but I figure I’ll share here. For me, this is all bigger than money. One of my disabled Section 8 tenants (he’s been with me the whole time, cool dude) had a stroke and was in the hospital for a month. His sister apparently flipped a switch or something on his refrigerator during his hospital visit and all his food spoiled. I was there last week with my contractor, my tenant didn’t realize apparently how bad his house stank, so we aired out the whole house and sprayed the fridge and put baking soda in there to help the smell for 30 days or so. The quality of this man’s end of life will be drastically impacted by my company, big responsibility.
I volunteer coach 5 soccer teams and while congratulating one of my players, I noticed his teary eyed mother, whom I have come to know at a distance over the last few years; I immediately asked the matter and she quietly let me know they were living in a hotel and were officially homeless, she said her mother hadn’t spent the rent and bill money wisely. I asked her to call me if they get to where they need to check into a shelter and I may be able to place them in one of my properties, she appeared open.
I’m proud of what we (my wife and I) have accomplished in the last three years. Financial freedom is tough with rental properties, it’s crawling to financial freedom. I’ve learned to be okay living with next to nothing in order to be able to invest in areas of the city that need investment. Now that I’m probably 3/4 or so to fi, I don’t care about materialistic things anymore (my wife and kids might), I’m concerned with providing a job for my contractor, an amazing home for a 65 year old minority man, a place to go for a struggling 8 year old soccer player and his mother, painting graffiti off dilapidated houses in areas that need leaders etc.
This house may sell for a great profit, at which I’ll roll every dime into more properties, but this is bigger than me. Removing blight, facing injustice, working hard, rewarding others, being bigger than one’s self. To my BP friends, please keep spreading the word of financial freedom, it’s bazaar how you feel when you get closer and closer. Life for me is about beginning the transition from being selfish to selfless. Thank you for your friendship.
