All Forum Posts by: Arlen Chou

@Brandon Stevens as @Angelo Wong has stated "master leased" properties for corporate housing/furnished rentals is a great model for cash flow.  The margins look fat, but you really do have to treat it as a business and get all of your processes in place.  If the couple you are referring to want to be totally hands off this might not be the road to go down.  I am sure @J. Martin can shed some light on the subject.  I am a buy and hold guy, but this market looks so juicy I might have to jump in myself...  Just kidding J!

@James Sansangasakun you need to reach out the @J. Martin about this topic. He is crushing it with furnished rentals! I also suggest you come out to his REI summit in October.

http://www.sfbaysummit.com/

@Andy C. this is @Johnson H. meeting next week.  Its a great please to meet like minded people;

https://www.meetup.com/SF-Bay-Area-Real-Estate-Investing-Club/

@Ron Steckly people are always looking for good PM's.  With that being said Oakland is a tough town for newbies.  Are you ok with working in deep East Oakland?  Being fluent in Spanish would be a great tool.  You also need to have a line on good sub contractors for all of the repairs, unless you are planning to do it.  I am not trying to discourage you, I am just trying to keep it real...

Good luck,

Arlen

@Quinton Slay long distances suck... been there done that and got the t-shirt. Hard to give advice without knowing more about your situation, but I assume that you guys do see each other every once in a while...  Definitely weird to send your girl to meet somebody that you don't even know.  I can only tell you what I would personally do, so please don't take this as the only path.  

I would get involved with my local meet up group and get know people as well as I could. User tip: pitcher of beer and a large pizza goes a long way at meet ups. Once I was at a comfortable personal level with some people, I would schedule a trip for her to come down during a time when there is a meet up scheduled. Introduce her to your new REI friends. Ask your new friends if they would be ok with you taking her to their job sites. They don't have to be there to explain anything, you just want to expose her to what a job site looks like at various stages. Some people are cool with that, others are not, so don't get offended if people say no.

At the same time, I would be looking for people on BP in the area your girl lives and start getting to know people in that area.  Find out when the meet ups are in that neck of the woods and I would plan my trip around the meet ups.  Let the people you meet online know your coming and offer beer pizza or whatever.  "Breaking bread" goes a long way in relationship building. 

Rinse and repeat the process as often as possible.  The more direct relationship based and tangible you make this, the faster she will understand.  I know that this is not a quick and easy path, but real estate is not a fast process... none of it is.  Your young, time is your friend, so take it slow at the start.  It would be crazy to start a marathon in a full sprint!  

Again, this is what I would personally do, so take it with a grain of salt and remember opinions are like a$$holes... everybody has one, but you only have worry about your own!

@Quinton Slay its amazing that this thread is so off point from your original question and has lasted soooo long. You have clearly stated that she is on board and wants to go down this road BUT she wants help to understand the process.  Basically it sounds like she understands the general concept and vision, but needs clarity on the "how". She is cool with the "destination" but she wants to see the "road map and the itinerary".  

If my understanding is correct, then podcasts and the books are not the solution to your dilemma.  I would assume she is past that point and throwing more generic information her way will just make her frustrated.  What you need to do is find somebody local that she can relate to and talk with.  Do the leg work and join some meet ups and find people that you like and have some experience and then bring her to meet those people.  I say do the leg work, because you don't want her first experience to be with some "know it all" that can talk the talk but has never done the walk.  Find different levels of investors so she can hear different stories from different levels of investment expertise.  Age or sex should not be a primary criteria, but I would suggest that you find somebody that has done many deals, like the type you want to do, and also find somebody who is just starting out so you can hear about the pain and sacrifice.  Offer to buy people lunch or drinks in exchange for a glimpse of their job sites at different stages of completion.  I think that once she can get into the local community and have a visual reference of what is to come, things will become more clear for her.

Tell me if I have totally missed the mark and I will quietly go back to my beer and popcorn and continue reading this thread ;-)

@Jane Dang I believe the property taxes change from year to year.  There are many people on BP who invest in Dallas or Austin areas, hopefully somebody will add to this conversation.

I personally like The Colony on the west, McKinney to the north, Rockwall to the east and Richardson to the south, with Plano being the center. Lots of tech going into the Plano area.

Regarding taxes, there a ton of resources online to get good info.  The link below is for Plano, which is in Collin County.

http://www.tax-rates.org/texas/collin_county_prope...

Also

Good luck to you,

Arlen

@Kristine Libby Because it is a SFR, life is easier for you, but it does not mean you are in the clear. You are able to raise the rent without any issues.

At the very least, you need to be documenting the issues and giving notices each and every time she breaks a rule.  It sounds draconian, but the sad reality is that the friction between landlords and tenants is so bad that you need to have that documentation in place for the potential of litigation.

If you are going to evict her, then you might want to approach an attorney and have them guide you through the process.

@Sheeva R. what many people do not realize is that real estate investing is actually a business.  As such you really should start by creating a business plan.  A business plan will force you answer the questions of why, how much, how long, etc.  It does not have to be a 20 page power point but at least an outline for yourself.

Don't make the mistake that most people make and start looking for a market before you actually have a plan. I am sure there are many, if not the majority of people here on BP started without sitting down and formulating a plan. In any other industry that would be sacrilegious, but for some reason in REI people think it is ok to just dive in.

As a business owner and somebody who has started several small companies in different states and countries, I highly recommend looking at what you are about to do with a larger business mindset.  Don't start a hobby... start a business.

In terms of an actual market, I have said it multiple times over multiple years, you will be very hard pressed to find a more economically diverse market in the US.  There is finance, bio-tech, software, hardware manufacturing, shipping, higher education, artificial intelligence, just to name a few of the industries that are based here.  Couple that crazy job growth and stability, with a real estate market that is artificially restricted through tough caps on building and NIMBYism equals a formula for a real estate market that, over a long buy and hold horizon, "goes up and to the right."

@Jane Dang Texas is a great investment state, BUT.... it has high property taxes.  Your relatives probably don't mind because they don't pay state income tax.  However in your case, you live in California with high income taxes and investing in Texas would expose you to high property taxes. I think you would be doing yourself a disservice by investing in that state.  Prop 13 in California is what I call an "unfair advantage" for buy and hold investors in this state.  If you get something in appreciating market, like the Bay Area, and you hold on to it for a long time you will see the value of your property rise, but the property taxes stay very low because of prop 13.  

When you look at the numbers, take ALL numbers into consideration before you pull the trigger.  I have an office in the Richardson/Plano area and I have watched the market there for 10 years go up up up, but I have seen property taxes go up up up too.  Just a word of caution... 

There is a meet up in Milpitas next week hosted by @Johnson H. You should come down and talk to some local investors.  There will be so many people with divers investing strategies that it might be a good opportunity for you to get first person input from many different angles .