All Forum Posts by: Paul Choate

I have grown up my whole life in Oklahoma. My town rises and falls with the price of oil. We have had half a dozen of these cycles since the 70s. These areas are completely dependent on the oil. You do not want to know what these areas are like in an oil bust. I generally shoot for a cap rate in my town in the low 20s but I also know that I am investing purely for cash flow. I don't expect my properties to appreciate. When oil goes down, so does everything else.

Oil field workers tend to be very transitory and have fairly hard lives. They can be hard on property. Specific areas can get played out or overdeveloped so be careful about your capital investment. If it is on wheels you might feel better!

Hello, I am in Shawnee and interested in meeting other investors in Oklahoma to learn from their experiences. Sounds like you are on your way. Good luck!

I am a bankruptcy attorney. You need to contact a local (where the suit is filed) attorney quickly. Your fact pattern doesn't make sense but, regardless, you could lose any defenses you have if you sit on them. They can collect from your bank and your property as well if the judgment is against you personally or your company. I know that sounds like more money, but if you don't respond they will get default judgments against you which are just as valid and can be domesticated in other states (i.e. where you live). If you are not fighting the claims then contact the other side's attorney and work out a payment arrangement. The worst thing you can do is ignore it.

I am hitting a wall as well and interested in others advice. I have not had any luck with institutional financing on my paid for properties. I am not interested in hard money as I just can't see how that gets me ahead unless I find a slam dunk. I haven't seen many of those personally.

So, I just now found a private investor to back me on my next 5 or 6 properties (mine are in the $20,000 each range) which is great. I have just signed a contract on my first flip (all my others are buy and hold) which I hope will allow me to accelerate my investing. I am very nervous about working with family but my equity in my personal properties exceeds this new investment. I know I can always sell out if I have to.

That is great to know! I feel like I just got a new toy to play with. I always wondered why these homes sat for so long around me and went for so little when they finally sold. Thanks for the info.

I shoot for $18,000 total per unit cost (purchase plus rehab) and my rents are $500 - $600 per month. I use cash. That is my average over 15 units. I am in central OK. I am in a bit of a market upswing with the oil boom. This area tends to fluctuate with the oil market.

My ROI goes like this:

$550 rent

-$20 taxes

-$40 insurance

-$55 vacancy

-$50 management fee

-$100 repairs

total expenses $265

So, $550-$265= $285 * 12= $3420/$18,000= 19% ROI

I am an attorney and use my office so that cuts down on other expenses.

My properties are very management intensive and they do not appreciate much. All I can count on is the cash flow but it is pretty good while I am able to do the work.

Sorry to post a ton- I just keep thinking up additional pertinent details.

Where I invest, I will never be able to stay under the 120% rule. My purchase prices are so low to start with.

I am an attorney so I prepare my notes and mortgages. This question is probably for the financing section, but- How do you protect your investors if you can't place a mortgage on it?

I am buying the property for $11,000. It needs $18,000 of repairs. So, they are going to be hanging out there unsecured. Next time, I am going to stick to $5000.

I am purchasing my first property with Fannie Mae and after we had negotiated the price they stuck the anti-flip clause in the addendum. I am a little annoyed, this house is not a short sale and has been sitting for at least 2 years after the foreclosure. I am not paying a lot and the rehab will probably take most of the 90 days so it doesn't really hurt me. I signed the addendum.

It is a bit of a pain as I usually secure my "lender" (read: nice family member) with a mortgage to cover the costs of the rehab and the purchase price at the same time. This is to protect them in case something happens. They will work with me but I don't like leaving them hanging for no good reason.

I am just annoyed because I would have stuck to a lower offer if I knew about this. It was not worth reopening this up but I will not be paying as much in the future.

My question is, can this be negotiated out when you are dealing with Fannie Mae or other lenders (in your experience- I know in theory it can)? I don't want to waste time by trying if it is not happening but I will be offering a lot less in the future because the risk and limitations if I didn't have the ready cash to do the job.