All Forum Posts by: Account Closed

Definitely hear you there @Account Closed, do you have any particular insight on how to avoid this with cheaper properties? Are you directly referring to issues with bad tenants or issues with major property expenses, or something else?

There is a reason they are lower end properties. Low end appreciation. Low end tenants. The issue with buying these properties is expenses, including labor continue to rise--- and rents don't keep up. If you can self manage, and do all the work-- you are set. But if not--- good luck.

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@Matt Berklacy I put my in a Post Office Certified Mail Envelope -and drop it in the front door. The envelopes are free. Works like a charm.

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@Alex Kies I would just make sure you have an exit strategy when buying in cheaper markets and don’t get REKT

2 Votes

@Sharon Kehnemui why are you putting so much down?

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If you are banking your returns on a Housing (Sec 8) type tenant--- just be factor in an eviction, new carpet, paint etc every 5-7 years into the pro-forma. The issue with St. Joe is finding quality tenants not properties.

1 Vote

Kansas City, Missouri

@Melanie Hartmann I don’t know why you would post this with all of the W-2 people on here. YOU ARE Asking for trouble lol. Best of luck! Keep us up on your new venture!

2 Votes

@Chaz Mathias It’s not controversial if you remove the “emotion” part out of it. Its a serious challenge—- when you look at the statistics. I won’t go into partnership with someone who doesn’t have a pre-nup—- too many guys get money a little money and run around on their wives.

3 Votes

Originally posted by @Hai Loc:

@Jeff Efird Jr

You need to be careful.. Some areas the rental market doesn't support commercial build if using income approach as value..

For example an 8 Plex.. 1000 sqft per 2bed unit that rents for $1000 each.. your annual gross will be $96,000.. using conservative 40% on expenses your NOI is $57600 you 8 cap and it's worth $720,000. You divide $720,000/8000sqft and now you got $90 a sqft.. and this doesn't even include the land.. Even if you jack up the rent to $1500 a month it will be $135 sqft without land..

Would it be feasible to build? This doesn't even include holding costs. I understand you are putting sweat equity but those numbers are tight..

If you build you need to automatically profit on equity or else it's pointless.. usually 20% to make it worthwhile

Good luck

If he is building his own units---- those number will be greatly reduced. Im rooting for the guy.

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Originally posted by @Jeff Efird Jr:

Looking to build a tri or fourplex as an investment property. I'm a general contractor myself so I will be building it. I've been trying to find all the literature and bigger pockets articles to help me with this new ventures. Any go to literature or anything of the sort or advice for me! Thanks in advance everyone.

This is great. Please keep me updated. Being your own builder is awesome--- maybe you can work the numbers to build 8-10 of them and get a couple on the tail end free and clear? Scale, Scale, Scale.

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Originally posted by @Joseph M.:

@Jay Hinrichs , yeah I agree , low end rentals can be profitable but likely have to be local like you said. Things can look great on paper, but a lot can go wrong and often does. For many that grew up and lived more a middle class lifestyle they probably can't imagine some of the scenarios that often occur in low income areas.

I do have to hand it to brokers like James Wise that does show the ugly side of lower end rentals , trashed properties , evictions etc . I've seen some of his Youtube videos and they are pretty good . He's also in the management business of course so it's to his benefit to be upfront and set expectations versus painting a rosy picture like everything is going to be totally passive and turnkey ..just sit back and collect the check...and on the path to financial independence.

Great post- you are spot on. They look great on paper- and the local realtors get a GREAT KICK out of selling the 10+ cap rates- but unless you have operations in place and on the ground. You are going to get eaten up. I am very much upfront with many clients and customers--- many times to my companies detriment and to the realtors commission checks but I sleep lovely at night.

I know many people in my area that own 10-15 units self managed and do all of the work. Their retirement plan is to manage their own units making 3-5k a month... Its possible, but not very glamorous.

1 Vote

All Forum Posts by: Account Closed

Account Closed has started 16 posts and replied 172 times.

Post: 50% Rule and Analysis

Post: can a business card be left (betw) the mailbox and flag?

Post: 50% Rule and Analysis

Post: Seller Financing Amortization Question

Post: St. Joseph, Missouri Investing Potential?!

Post: Quit My Job and Plan to Wholesale

Post: Should you Protect your Assets with a Prenup?

Post: Multi-family build to rent advice

Post: Multi-family build to rent advice

Post: It's Feeling a Lot Like 2007