All Forum Posts by: Andrew Johnson

Sam Josh I’d argue that the “B” properties are where you want to be if the economy sours. Those in the “A” won’t be able to afford it and come to the “B”. What happens to the “A” markets when rents drop? Those “appreciation” properties now burn cash. The “B” properties might just “make less money”. But these are all made up hypothetical examples as the economics of each property in each market are different.

Mary Jay If you’re going to help with college (for your kid) just stretch your timeframe to 7 years. 3 until he goes to school and then the 4 years of him being in school. With a longer runway you may be able to save to get a better quality property or properties. Those cheap homes sound good but one unforeseen cap-ex issue could derail your entire timeline.

Dan Roma Where I invest (Arkansas) you’ll find some land where mineral rights convey, others where they don’t, it’s just hit and miss depending on what the previous owner has done. I don’t know that there’s a specific location where mineral rights *always* convey but maybe there is 🤷🏻‍♂️

Manish A. I own apartments with them and I (personally) love them. No issues with them renting compared to my other units and (obviously) they’re pretty darn durable. Now I don’t know how that translates to selling an SFR. Others will have greater insight but it hasn’t been inhibiting for me renting.

Cj Thompson Just some food for thought: Have you talked to a commercial lender? Since it’s a commercial property (with the business) you’ll have to handle whatever terms they have. Ignoring the amortization table at the moment, they’ll usually want to see 6-9 months of PITI and/or a net worth larger than the loan amount. If you’re almost broke I’m not sure how you’d jump either of those hurdles. If you went the HML route you’ll end up with a materially higher interest rate. Not to say it’s the bad choice, but it impacts your numbers and potential exit.

Jon Gorham For what it’s worth, I’d take the advice of your PM since they’re active in the market. Whatever the “cause” of 10% vacancy, if it’s there, it’s there. The push-pull has to do (as others have said) with figuring out materials that are durable, likely driving by on a weekend to make sure they aren’t hanging banners out of the window about a Saturday party, etc. Just my three cents...

Anthony Bielecki I’d start with places you’ve lived before, have close friend in, have family in, etc. In short, some place where you have a modicum of local knowledge you can’t get from the ol’ interweb. In your neck of the woods it might be knowing “Palo Alto is really different from East Palo Alto!” I’m sure in every market there are those same differentiators than most people on the ground know (even if they aren’t RE investors). If there isn’t a winner in that bunch, well, I guess you could pick through all of those Top 10 lists that are out there for REI 🤷🏻‍♂️

Tarquinn Curry I don’t do it but I do remember a frustrated wholesaler (starting out) because he was targeting parts of Irvine and adjacent areas. Basically, places where the odds of finding a “distressed” homeowner was pretty darn low. After 3 months-ish he had barely any calls and “they all wanted retail”. So anyway, not to say that it wouldn’t work in OC or IE but that’s the only anecdote that popped to mind.

Alex Cooper You can ask for it and likely should ask for it. Now, determining how accurate it is can be another story all together. For all you know the owner is running their cell phone through the property so the expenses are “high”. Or they could just have “forgotten” some expenses for the last 12 months. It doesn’t take too much to skew metrics like cash-on-cash returns. Net result, ask as it can be a good starting point.

Tanara N Taylor I’m just going off of the one picture but $20K seems really low for the repairs. That overhang is sagging so who knows about the roof quality. It looks like some odd green staining on the siding. So it’s all making me think that the inside looks just as bad...or worse. Have you gone inside? Are you doing the labor yourself and just need material costs?