Live in CA, Invest in AL & MO

23 Replies

I have been investing in Real Estate for the past 6 years.  I buy & hold most deals, but occasionally I flip.  For example, this month I close 20 SFRs and only one is a flip. The remaining 19 will be renovated and rented.  I am looking to expand my investment business so that in the first quarter of 2016 I am buying 40-50 properties each month. I hope to buy 400-500 properties next year.  Some people say investing out of your area/state is a bad idea, but for me it was the only way for me to succeed as the area I live in is incredibly expensive and competition with other investors makes acquiring properties very difficult and far less profitable.  

@Joe Moore  There are a number of ways to finance that many deals.  I have used a few.  

I started buying properties shortly after the crash with my cash on hand and personal credit (option 1, up to 10 properties, although at the time it was hard to get more than 4). After you hit the maximum, many banks or commercial mortgage brokers will refinance the package of properties (option 2).  

But I am somewhat impatient with the speed of the process of doing it on my own, so I began taking capital partners. I have good credit, so I didn't need their credit, but I sometimes still use it if they have a high net worth (>$20M) because the loans they can get are a much better rate (~2.5%-3%) than one I can get. Because their rates are better, the ROI can be much higher as well. It is worth bringing them on as a partner, even if they don't contribute any more than their balance sheets to back you because you will make more money as well.

To answer your question as to how I get financing on that many properties now, I use lines of credit and hard money lenders.  I still use capital partners as well to provide the 20-35% down payment (depending on the lender).  There are a number of companies that will provide lines of credit when you have a proven track record.  

@Account Closed I am interested in Hard money. It's always nice to have additional lenders when I need them. Message me back if you can beat, match or come close to my current terms. For a rehab loan, I pay 2.5 points, and 11% with a 65% LTV. For an acquisition line, I have 1 point and 9% with an 80%LTC, no rehab covered. If you can beat or get in the same ball park, I would love to talk.

@Rob Fuller

Welcome to BP! Your background is pretty impressive and you've got some great goals. I work out of the St. Louis area as an agent/rehabber/management company, so if you're ever looking for boots on the ground in this area I'd be happy to talk with you about how I could help.

Cheers!

Hi Rob:

Besides price and less competition for properties, what were the deciding factors to build your team to invest in Kansas City and St. Louis?

Look forward to hearing about your progress  :-).

Sorry everyone.  I had 8 closings this week so I was a bit taken for time.  

@Al Wilson I buy in Huntsville, Montgomery, Birmingham and Mobile. It's always nice to have additional lenders when I need them. Message me back if you can beat, match or come close to my current terms. For a rehab loan, I pay 2.5 points, and 11% with a 65% LTV. For an acquisition line, I have 1 point and 9% with an 80%LTC, no rehab covered. If you can beat or get in the same ball park, I would love to talk.

@Tim Farrell I am not interested in Nevada, but one of my mentors has just purchased 1000 units there.  He's only interested in Bigger Apartment Complexes.  He has 2500 doors in Sacramento and 1000 in Sparks.  If you can get anything good, I can put you in touch with him.

@Patty C. The reasons I gave were the reasons I went out east.  I make way more money out there than I ever could here.  I don't know what other reasons you might be looking for.   There are a number of additional reasons one might choose to invest out of CA but in the end for me it comes down to the bottom line, I make more money investing out of state than I do in state.  Is there a more specific question you have?   

@Patty C. The reasons I gave were the reasons I went out east.  I make way more money out there than I ever could here.  I don't know what other reasons you might be looking for.   There are a number of additional reasons one might choose to invest out of CA but in the end for me it comes down to the bottom line, I make more money investing out of state than I do in state.  Is there a more specific question you have?   


It appears your terms are fairly high to make the long term hold strategy work and typically hard money loans are shorter terms.  What are your exit strategies out of those loans?  Escpecailly with 400-500 loans.  You indicated a wrapping a number of properties into a bulk refinance however how many will they do and who are you working with on these bulk refi's if that is your exit strategy?  

Did some rehab work with this company and didn't get paid for the job I completed. I own 3 rentals in Montgomery that I remodeled. With some down time I did some rehab work with Rob Fuller Property. Call him and explained the problem and was blown off, I guess to big to take care of this small problem for him. Worked with one of his people ( Josh Roberts) not professional at all. Never does what he say he will do. People who work for you are a reflection of your company. This is why I'm using this platform to let folks know the good and the bad. I have to go thru the legal process, demand letter and filing a Mechanics lien. Is this worth (2,800) what they owe me to this company that has 500 or so rental property or is how the make a profit.

Jay

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