Irvine, CA · Member since 2013 · 14 posts · 1 vote
Hello to Everyone,
My name is Marc Boiron. After listening to a few BiggerPockets Podcasts, I figured the logical next step to be to introduce myself on the forums.
I am a corporate attorney who plans to stick to his day job while investing in real estate. I am in the process of purchasing two homes in Houston, Texas as cash flow properties. The next step for me is to partner with someone (I think I have found that partner) to do some rehabbing. My potential partner is located in Lynchburg, Virginia. I will provide the capital; he will provide the equity. I definitely have a whole lot of questions about the financing aspects of rehabs.
I look forward to being in contact with many of you.
Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
12y
Welcome to BP!
Well rehabbing is great, but realize there is a huge difference between rentals and flips. Rentals do provide lower amounts of income, but it's passive and long-term and with insane tax benefits. Flipping is active income, but in higher chunks, and with major tax hits. Nothing wrong with it, but it's best coupled with buying rentals.
Unless you are talking about buying cheap rentals and rehabbing them holding. Then ignore everything I just said :)
On rehabbing, there's a ton of articles on the topic, and as you know, we've covered it in many of our podcasts already. Throw up any of your questions here on the forums and folks will definitely jump in to help.
Investor · Wichita Falls, TX · Member since 2010 · 3k+ posts · 603 votes
12y
Welcome to the site @Marc Boiron & thanks for taking the time to introduce yourself!
Congratulations on hitting the ground running with your first two rental deals. I especially like that you're taking advantage of the power of partnerships to achieve your goals. That's awesome and I can't wait to hear about how that hammers out.
You've probably come across the 50% rule just listening to the podcasts, but check this video out anyway, I use this model when evaluating all my prospective deals:
Irvine, CA · Member since 2013 · 14 posts · 1 vote
12y
@Jessica Swingle
Thanks for reaching out to me. Your question is a fair one, but I do not have a clear cut answer to it. I am not bound to any geographic area (actually I probably prefer to be geographically diversified). I realized from my purchase of properties in Texas that rental properties will not generate sufficient return. I feel that while I am younger I should be seeking higher returns even if it comes with greater risk, which is the reason I turned to finding a partner to do rehab projects with. It happens that I have a long-time friend who may be interested in getting into the business. He lives in Lynchburg, VA and has the time while I have the capital. That being said, I do not know much about that market yet, so plans could change.
Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
12y
Welcome to BP!
Well rehabbing is great, but realize there is a huge difference between rentals and flips. Rentals do provide lower amounts of income, but it's passive and long-term and with insane tax benefits. Flipping is active income, but in higher chunks, and with major tax hits. Nothing wrong with it, but it's best coupled with buying rentals.
Unless you are talking about buying cheap rentals and rehabbing them holding. Then ignore everything I just said :)
Investor · Houston, TX · Member since 2013 · 228 posts · 30 votes
12y
Hi @Marc Boiron and welcome to BP! Glad you joined and that's great that you're taking action already. Ask lots of questions and stay engaged, even if it's just once in awhile. Which part of Houston are you buying the homes at and how are you financing them?
Just wanted to say welcome (Since I too am new to the forums) and glad to hear things are rolling along for you! I currently live in Jacksonville, NC but am originally from Alvin, TX and plan on moving back to the Houston area in a year and a half. I wish best of luck to you and hopefully we can meet up some time in the future!
I appreciate your advice. Because I do not have time to do the rehabbing, but have the capital, I will only get into rehabbing if the partner that I mentioned in the initial post determines that he wants to do it full time.
From what you are saying, it sounds like it may be worth continuing to invest in rentals to offset the tax consequences of rehabbing. I had not considered it. Thanks. Ultimately, I am not beholden to any strategy. I figure that if the investment can produce the returns that I am looking for, whether it be a flip, rental or otherwise, then it is worth considering.
Also, I hopped over to your website, and I like what you are doing there. Keep it up.
Thank you for reaching out. I am buying the homes in Conroe and using conventional financing, 20% down. I figured that I would keep things simple on my first transactions, get some experience under my belt, then figure out other financing strategies.
Are you personally managing your properties in Houston, or do you have employees doing the management? Where are your properties in Houston?
Investor · Maui, HI · Member since 2009 · 13k+ posts · 3k+ votes
12y
Hey @Marc Boiron! I'm glad you're enjoying the podcasts! We always are looking for more help answering questions here in the forums, so anytime you can jump in and offer advice, we'd love it!
Oh - and if you haven't yet- be sure to setup some "Keyword Alerts."
Welcome to you as well and congrats on your first transaction. What kind of deal was it?
Marc,
It was a cosmetic rehab on an REO condo. Luckily the entire "Rehab" (New carpet, paint, and minor repairs) only took a week, so I was able to get it back on the market quickly. It was a great learning experience and now I'm looking for that next one to keep up the momemtum.
As far as the Houston area goes, have you got a pretty good idea of the market? With me moving back I plan to start doing some research within the next couple months so I have a general idea of where I would like to move to and the area to invest in.
Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
12y
Thanks Marc!
Yeah, I would always keep investing in rentals because it does nail out that long-term strategy with mega tax benefits. Even if someone flips full-time, I still recommend they invest in something passive with that income because a lot of people end up losing that money if they don't put it somewhere smart. In a perfect world, if you could keep buying rentals with the flip money, you'd be financially free in no time!
Best of luck. And Houston is a great place to be, so good move there!
My apologies for the delayed response. It sounds like you did the smart thing starting off with an easier rehab. That is the approach I would like to take as well.
I do not have a great idea of the market. The rental properties I purchased are in Conroe, an area where I know substantial development is occurring, vacancy rates are low, rents are high enough to meet the 1% rule, and schools are good in the area. After having confirmed that information, I was comfortable that the area would be a good one to invest in. But I would not generally say that I have a good idea of other areas of the Houston market.
It's a small world. I lived in Lynchburg, VA for about 9 years, I now live and invest in Houston, and my wife is from Newark, DE (right around the corner from you). In fact, I'll be up there next month...
I am not sure whether you previous message was intended for me. Either way, I have not invested locally, but I am never opposed to it. Shoot me a message with you email address and I will reach out to you. Thanks.