All Forum Posts by: Brian Tome

@Heather Carrow - Anytime.  My wife Sheila is a realtor also, so you might already know her.  She is very active and one of the top sellers in the County.  She just moved from Long & Foster to Keller Williams and is in the process of getting her Delaware license.  We have a rehab project going in Elkton, in addition to the fixer upper that is our current home in Worton (Kent County).

@Account Closed - We find properties through our own yellow letter campaigns.  I send a few hundred at a time until I find someone who wants to sell their property.  They are usually very rough and need major rehab.  We also picked up four from the children of an investor after he passed.  The estate administrator contacted my realtor wife about selling them, but opted to sell to us as a group.

@Account Closed - We invest in Cecil County, Maryland and we are looking to move toward Kent County as well.  We do BRRRRs and often get in for a total that is right around $100K ($105-130K with purchase and reno) for a property that appraises for $140-180K and rents for $1250-1650 per month.  We leave some cash in some of our properties and get more than we put into some of them on the refinance.

After 3 years we have 7 properties generating $3000 a month cash flow on an investment of $300K.  We have 15 year notes on each of the properties and the total portfolio is worth right around $1M of which we have $450K and growing in equity.  So we are getting about a 10% cash on cash return with another roughly 12% on equity pay down.

As you can see we haven't hit any home runs, but lots of base hits.  Plus, the homes we have purchased are in very stable neighborhoods in communities within minutes of the I-95 corridor and easily commutable to Baltimore/Wilmington/Philadelphia.  We are pretty happy with the market and our investments/returns.

Both have their positive and negative aspects.  @Russell Brazil is always right, but especially here.  Screen your tenants carefully and you won't have any problems.  I am still green, but I have seven properties with tenants who all pay on time and in full.  They are wonderful people and we love them, but we had to wade through a lot of shady looking characters to find them, and we waited an extra couple of weeks or months to get just the right applicants before renting to them.

While Jeremie has a point (the market is pretty hot), I don't see a value downturn coming.  If anything, I think the properties will continue to go up in value as the dollar declines.  If you can hold (or even better leverage with debt) I think you will position yourself to win big in the long run.

But like Jeremie said, just "$0.02 from a newbie."

Good luck! 

@Jon Jones - My pleasure.  "As iron sharpens iron ...", right?

BTW - Good place to look for tired landlords/distressed rental properties is on an absentee list or an inactive rental license list if your city/town has one.  You can focus on the ones that failed inspections or have been inactive for a while.  That might require a mailing phone call campaign, but could turn up all kinds of deals.

When I do mailers, I used a small yellow letter (computer generated with a font that roughly resembles handwriting) in a white invitation envelope that is hand addressed and has my return address on the back.  I get a 10-12% response rate, which is insanely high, but the letter is written by my daughter and says "I am helping my dad buy properties ..."  I think people like to know they are helping her fund her college tuition.

I also dig extra deep on any returned mail, because if my letter gets sent back you can guarantee bulk wholesaler mailers aren't getting through.  So if you can do a public records search and get the correct address, you will probably be the only person the owner hears from.

Every time I send a few hundred letters I get a house.  I buy, fix, and hold, so I work through my list very slowly, but it works for us.

Happy hunting!

@Jon Jones - You are letting your need for financing drive your decision.  Just a thought, but what about making their need to sell drive the financing?  Try finding a property that the owner knows won't appraise or finance and sign a two year rental lease with an option to buy anytime before then at current value.  Then move in and start your rehab with a goal to finish it within 6 months.  That will give you plenty of time to find a lender/mortgage broker.

It may be hard to find that landlord, but they are out there and the worst case for them is they end up with a property you move out of and have made nicer for them while they collected rent on a property they couldn't have otherwise rented.  

@Gerald Patrick - Check out the Delaware Real Estate Investors Association at https://delreia.com/

I have only been a couple of times, but Mike provided really good content and it has a reputation for being consistently good.  They also have a Facebook page.  

@Leon B Buie - That's insane cash flow!!!  I wouldn't think that neighborhood would be of interest to many Air BnB customers.  Obviously I missed something that you figured out.  

What characteristics do you see in your guests?  Are they in town for work and if so, what do they do?  Visiting family?  Vacation?

If you can keep up that cash flow you have found yourself a real machine!

@Leon B Buie - 40th and Market isn't a great neighborhood, but that is a steal if it was close to rent ready!  Way to go!

Welcome to BP @Joshua Hower!  Everything you could possibly want to learn about investing in real estate is right here on the forums and in the articles posted.  Those are good goals!  Listen to the podcasts, post in the forums, read all you can and happy investing!