All Forum Posts by: Ali Boone

So you live somewhere other than Phoenix and are hoping to invest in Phoenix? If that's the case, those numbers sound about right. Cash flow in Phoenix disappeared years ago.

Any reason for Phoenix in particular?

Not to toot my own horn or self-promote, but I actually think it's a really good book: 

NOT Your How-To Guide to Real Estate Investing: Life Lessons on Hacking Your Mind Before You Hack Your Wallet by... me :)

Consider it a prerequisite to all the REI how-to guides you could read. Mostly focused on mindset, contains interviews with successful investors in different strategies, etc. 

It completely depends. I wouldn't at all focus on the cash flow number... I'd focus on the cash-on-cash return. As an example as to why-- $700 cash flow sounds like significantly more (and better) than $100. But what if that $700 was on a $2M property whereas the $100 was on a $50K property? That $100 would actually signify a much higher return than the $700. That's the most obvious component that makes the issue relative, but then there's also the spectrum of risk vs. reward and active vs. passive. If you have two comparable cash flow or cash-on-cash returns, is there a difference in the risk levels of each and/or how active you have to be on them? If so, then that will also sway my answer.

I realize that didn't at all answer your question, but I'd take a step backwards and readjust what you're looking at, and then decide what you want to aim for.

I think others have mostly answered it. Definitely check on the HOA for renting restrictions. But after that, it just comes down to the numbers. There are pros and cons for new construction vs existing properties. Existing properties have a proven track record (one way or another), and new construction doesn't. But then new const has the benefit of being... new. There's also a difference of whether the new const is in in-fill lots or a whole subdivision full of them in terms of the value it will hold along the way.

Originally posted by @David K.:

Absolutely! We have several builders here in Atlanta that are building brand new homes that make great rentals. We currently manage 5 or 6 with one builder alone. They demand excellent rents and just fly off the shelves when available. It helps having a year builders warranty to get any imperfections fixed, and then all of the appliance warranties. Generally speaking there's very little maintenance those first couple of years, knock on wood.

I would just check with the builder to make sure the HOA doesn't have any rental restrictions. Lot's of neighborhoods can have a maximum number/percentage of rentals allowed, so getting in on that at the ground floor is advantageous. I think it's the best way to go if you have the equity to make it cashflow decently. You're 5-10 years away from early appliance replacement, and with proper HVAC maintenance, and inspections, you could get 15 years out of that house and get out before having to replace anything big.

That's all in a perfect world. We've got some pretty good areas in North Atlanta for this....if you ever want to leave 100°temps to fly to Atlanta, and feel what 170° is like when it's really only 86°.

Do those new builds in Atlanta cash flow? If so, I'd be interested in finding out more. I have a lot of investors who would be interested.

There are two main ways you can do it: put together your own teams, or go turnkey and those come with the teams in place. More info-

Well.. never mind... they deleted the article. It was old... whoops. And I can't link to a non-BP link to show it to you.

Anyway, so you can either put your teams together or go for turnkeys that come with teams. And then the other spectrum is- you can buy properties that need work or you can buy turnkey where everything is done for you. For properties needing work, definitely the recommendation of David Greene's book would be good. For turnkeys, there are lots of other resources (I've always bought turnkeys).

CoC. You could get a property that cash flows $2,000 per month, but that doesn't mean it's a good investment. Depends on how much you put down, etc. I always check the cash flow, but then the CoC is really where it's at. Cash flow by itself doesn't mean anything because it doesn't take into account what you have to spend to get that.

Welcome to the woes and challenges of real estate investing (not sure whether to put a smiley emoji here or frowning). The most successful investors are the ones who don't quit when they think all is lost. If you want it that bad, don't give up. Just figure out how to work it.

This won't be your solution because you don't have the credit, but maybe it can spark some ideas to get you started. It's the main method of creative financing I started with-

https://www.biggerpockets.com/...

Now is a great time to be diving into as much education on real estate investing as possible. I'm not normally a big fan of condoning wholesaling as a strategy, but maybe that's something that would be advantageous for you--no money needed to start, can make good money if you're short on funds from a job loss, it will teach you a ton, and eventually it can get you a solid property.

Explore what's out there- hard. You'll find something that works!

It's very simple--do proper due diligence on the property. No one in this industry should be relying on taking anyone's word for anything. That's what has gotten people in significant amounts of trouble, especially with turnkeys. Turnkeys have this marketing message of sorts of being hands-off (I'm guilty of referring to them as that myself), and it has a way of suggesting that the investor doesn't need to do due diligence and they can just trust the turnkey provider. That sounds great, and that would be the case in a perfect world, but we don't live in a perfect world. So! You should be learning how to do due diligence on the property so that you know the exact condition with it. Property inspection, title info (and insurance), etc. You also need to verify all the numbers that are being advertised... some turnkey providers have a tendency of fluffing those to make them look better than they realistically are. Lots of ways to do that.

Would need more info on what you're wanting to achieve with a property to be able to make recommendations. Like, are you thinking of this property to be an investment now but something you move into later? Are you hoping to find a property that cash flows or is appreciation potential enough?

Cash flow is going to be minimal to none in both of those places. If you do find cash flow, condo fees may kill what's there. If I had to pick one of those markets, I'd hands-down go for Phoenix (I think Vegas has terrible market dynamics for rental properties), but know that Phoenix has already hit a boom... about 10-12 years ago. There used to be a ton of cash flow there, but it's been gone for years, as a whole.

Not to say either place won't work, but it depends on specifically what you're trying to achieve with an investment there.