All Forum Posts by: Marcus Auerbach

It actually works quite well in larger subdivisions with uniform housing stock, the opposite is true in rural areas or homes that are a little different than the comps or areas where the housing stock is very diverse.

@Ulises Becerra welcome at BP! Comps and ARV are a little like golfing - you will never be 100% satisfied. But you wil get better with time and you can learn from mistakes - including other peoples mistakes. One of the best things you can do is track other rehabbers in your focus area. Look up how much they have paid for the property, how long it took them and what they are asking for the finished product. You can do that on Zillow, even the data is not always the greatest. Go to open houses whenever possible and study materials, finishes and the choices they have made on what to leave and what to replace. You will find that some are really good - they bought it for a great price, turned it arround quickly and deliver a quality product. Others.. not so much. Keep track of the listings you have seen and follow them until they close. This will give you a sense of what works and what doesn't.

I understand your pain, but when you forget the "real" part for a moment this game is all about tying up as much money as possible in self eliminating long term debt. So from that point of view, go for the cash out refi. On the other hand the credit line has the huge advantage that you don't pay interest when you don't need it. That ads a lot of pressure when you are shopping for a project. So here is a point for the HELOC.

Kiara, are a agent friendly investor? You can look on BP for members in your area and there are plenty of investors who are also agents and understand the game. Just be mindful of their time and ask how you can best work together. Good luck!

Thanks Shawn. She is a great person and has helped others in the past with the little that she has, so it was time for people to take care of her. It took me a little to put myself mentally in the position to just not being able to take care of my family, because you just don't have $500 for a new appliance, not even on a credit card and you have to explain that to your kids. Everyone would have helped and I'm glad we were able to.

@Robert Kriedermann I think I have received a letter from you a while ago. If you mail to absentee owners you definitley have to scrub the list from names who have multiple income properties - not your typical motivated seller. In my mind the main thing is touch points. Pick one area and like some said before make sure you touch them every month. What happens is that you build trust and recognition over time. The big missunderstanding is that you dont mail to people that are already motivated. You mail to normal people and they get to know you (your letters) - and then they become motivated. My suggestion would be shorten your list and increase your touches.

@Chris Mylan I see where you are stuck - the new fair market value does not happen conviniently. Step by step: find a small bank that will do a cash out refi. Make some calls you will find several. They will order an appraiser to go see your place and establish fair market value. They will then typically give you 75% (not 80%!!!!) of the new and improved value. The proceeds will pay off your original loan and the difference will be given to you as a "cash out". Note that you will have about 2k in closing cost.

@Karen DiNapoli let me say first, that I am a huge proponent for investion in your backyard. Anything further than 20 minutes away gets much more time consuming. And as soon as you need an airplane it's a completley different story. I would first recommend to take a good look in a two hour radius arround where you life before I would go across the country. Okay, that being said here is my take on Milwaukee. I ended up in Milwaukee with a international job transfer I got involved in REI. It took me a while before I realized how blessed we are here compared to many other areas in the US with a combination of relativley low property prices and a strong rental market. Funny thing is that everyone arround here is complaining how hard the market is. The grass is always greener.. So price/rent ratios are good, but there is also another reason: a while ago I was interviewing college kids for an intern position and a very smart guy told me about the paper he wrote about the long term economic advantage of the Milwaukee location - his reason: water. We sit right on Lake Michigan, one of the largest fresh water reservoirs in the world.

Servus @Sebastian Utz! Welcome to BiggerPockets! I would start with a lot of reading and asking questions and BP is definitley the right place for that. The next question will be where to invest. I am not sure what your intentions are, but I am a huge proponent of investing in your back yard. Most of the main principles will work in Germany as well as here, perhaps with the exception of wholesaleing. Munich is very much like our coastal markets - property prices are very high and even with strong rents it is not as easy to find cashflowing deals. Financing is another issue - we are used to low down payments and 30 year fixed interest rate loans - which is the engine of the US hounsing market. Also, be sure you understand the tax implications: write off's are much less plentyfull and you will have to pay income tax on most of your cashflow. Feel free to reach out, always love to chat in German. 

@Zach Hicks thank you. Actually I did not know and was going for multi family first. I red all the books about MF investing I could get my hands on - Ken McElroy comes to mind - the numbers and leverage are certainly exciting. So I started out with the smallest MF possible just to test the waters - a great lannon stone duplex in West Milwaukee, which I still own. I was very sceptical and my mission really was to identify "the catch" with REI - I did not understand why not everyone was doing this, but thats a different story. While it turned out to be a good investment I burned through a bunch of tenants in the first couple years. Great people and no issue with the property, but lots of relationship drama, short term leases, early termination, back and forth etc. At the time I had a corporate job and was travelling a lot to Europe and South Americe and learned that not being in the same timezone was an issue when it came to managing small MFs. I realized that I could handle one, two, maybe three properties, but there was a ceiling to what I could handle and I either needed to pay a PM or find another way. So I started looking into SFRs. 2012 and 2013 were great years to buy forclosures. The difference in the target audience was very obvious right at the first open showings. Instead of single individuals or unmarried couples that were interested in my 2BR duplex appartment I met a lot of families. Most of them young professionals with little children and they were interested in the schools and clearley looking for a place to stay longer than 12 months. That is when the light went on for me. The cash flow was less than from a typical duplex, but I needed the stability more than I needed the cash. So the startegy was really born out of necessity, because my corporate job was not compatible with small MFs. Over the years I have tweaked the approach more and more to make my properties attractive for families and we experience very little turn over. Would I go back to MF? Yes, absolutley. They are perfect to start out with and if you have the time and flexibility you can quickly grow a cash flow machine. For me it would probably have to be a larger complex with on site management, but that's something I'll safe for later when I loose depreciation opportunities and need to trade up.