All Forum Posts by: Bill Coleman

@Micki M. Thank for the comment. Sounds like rational advice. Thank you for that. I think my initial strategy will be to give a few condos a try and see how they work for me. I may also through in a SFH and see how that does. Do the numbers and buy right, have a few exit strategies and then just pull the trigger and make a few mistakes. That's the best I can do. Maybe I will hit a home run or at least have a property that will cash flow. Thanks again.

@Eric Y. Hey Eric. Welcome to BP. Whether you are a seasoned investor or a novice, the podcasts are amazing. My buddy in NY has been flipping houses on his own for nearly 10 years and when I showed him the podcasts, he was exploding with new ideas and possibilities. Enjoy. Hope to see you at the meetups! I'm traveling during the next two meetups but eventually, my schedule will comply.

@Susan Gillespie Thank you very much for taking the time to weigh in.

I am definitely not against condos/townhomes at all. In fact, I feel like it could become my niche, as you put it, therefore I wanted to get the experience of the BP community on condos. I think they are a great interim housing for people who want the space of a house but are not yet ready to commit to owning or affording a full fledged SFH. I bought one for those exact reasons in NY and enjoyed my 12 year stay there. When I cashed out, there was no appreciation. At a point in 2007, it had gone up considerably, but after-crash values were the same as 2000 when I bought into the community. However, I found there to be much less volatility in the market where condos were concerned. I noticed that the price swings were not as dramatic. The upside was not as great as a SFH but neither was the downside. Friends of mine with SFHs were quickly underwater whereas I was not.

I am cautious about condos because so many experienced investors on the podcasts do not speak favorably about condos or anything that is governed by a board or HOA. I constantly hear about how old and out of touch the board members are and how unyielding they are. I had a similar experience with my HOA but ultimately, they ran a very clean community that was always well maintained. The community was actually in a pretty bad area of Long Island but they had built this little oasis of tranquility.

Condos appeal to me because I can buy more of them with the funds that I have and they are easier to maintain. I want a large portfolio that I am still able to manage along with a full time job. With a house, there are always maintenance issues. I used to own 6 multi-family buildings in Delaware and I was constantly fixing them (did all the work myself from admin to contracting).

I know that I can hire out all the maintenance but all of that cuts into my cash flow and I just feel like expenses for condos is more predictable.

Your advice is great. I welcome a private conversation if you have time.

I would say that if you run the numbers and the condo meets your cash flow, NOI, CAP rate, etc then HOA fees should just be treated as another ongoing expense. If it were a house, you would still have to account for long term capital expenditures.

As a former ad guy, my eyes are burning reading these posts. I just went through this exercise for my own new company and the temptation was there to just say oh it's a REI company and nobody cares about the name or will ever know the name.

Imagine yourself in a networking situation - will you be proud to say the same of your company or will you say the name of the company and then offer an excuse as to why it's so boring? Your name drives all of your marketing collateral, business card, URL, email, etc.

I too was tempted to develop a quick and dirty name just to get it over with, but I paused and reflected on my time in the ad business and started developing a list of 50 potential names. I also developed a wish list as to the characteristics of the name - have meaning for me, have meaning for my renters, end in "properties", it could not be confused with other areas or businesses, it could not be tied to my current location (Denver), it needed to allow for expansion and change and a few more. More than anything, I wanted it to have meaning for not only me but for my renters.

There are loads of naming resources online that you can tap into for ideas. One thing to remember is that when you are naming a company, it's best not to tie it to your own name. What if you bring on a partner or sell the business or want to expand so that you do less day to day work? Your name will limit this. Also, when you develop a name, try to think about not just the present but where your business could go in the future. If you call your business Delaware Rentals LLC and you decide to expand out of rentals into wholesaling or expand into Maryland, NJ or PA, then your name is no longer appropriate.

If you want to speak more about this over the phone, please message me and I will provide my #. Also, I lived in DE for 12 years and used to own 6 properties there. It would be enjoyable to have a chat. Hope this helps.

@K. Marie Poe Thanks for your feedback.

I feel like condos are like any other real estate investment - as an investor, you have to become an expert in that category so you understand what to look for when you are reviewing the deal and you develop a methodology that is predictable and repeatable. I think that leads to success. Many of the successful investors on the BP podcasts do just that - focus on one area and become really good at it. This will provide shortcuts based on your experience and while everyone else is still writing furiously, you are the person that gets up first and hands in your paper while everyone else is wondering how you did that so fast.

Then you need to set your buying parameters and stick to them. You only buy deals that fit your requirements with an HOA that you feel will support you rather than fight you.

@Grant P. Thanks for the report. Can't wait to dig into it later.

Not sure if Denver is classified as a small city. I came from NY so of course it looks small in comparison but I think condo prices are healthy, especially as you approach downtown where they are building condos like crazy.

I can't help but feel like there is good opportunity to buy condos at a discount. Also, there is only so much that can be wrong with a fixer upper - the owner can't be responsible for structural.

Who can weigh in on the idea of focusing on condos and making that one's specialty? Who is doing that currently can you share the good, bad and ugly?

@Michael B. Thanks for the tip. That's a great idea to get to know the board. The last townhome community I lived in had a nightmare board - however, the community looked amazing. It's the reason I bought into it over ten years ago.

What does the cash flow look like? I've heard that condos can cash flow well but you get zero appreciation. I do like the aspect of the HOA taking care of all the major maintenance items. That way you don't get many or any big surprises unless they do a special assessment.

What pitfalls should I be looking for when I profile a condo and the managing HOA? What things should prompt and investor to run, not walk, to the nearest exit?

Perhaps since these apartments are going to be high-end, the rents will be high when compared with existing supply. Those that can't afford these exorbitant rents will be looking at more reasonable properties. Also, if you are focused on renting SFH, then these units probably won't make a difference. Just my initial guess, but I would love to hear from the BP community on this one.