All Forum Posts by: Brian Wilson

@Patrick Flanagan

Kc is a solid market, however SF market is pretty frothy right now and doesn't really make sense. I would factor some percent of drop in value/rent (probably not to exceed 10%) if you buy before the next downturn. Still deals to be had, just have to be more creative and thorough when vetting your deals.

A TK company like the one @Nathan Brooks runs would probably be a good place (safe) for you to start since you're not local. This market appears to be super competitive and without being local, I think it's a place for only the pros to play currently. This will change during the next downturn. 

Just my two cents.

Good luck!

Side bar questions for all the landlords involved in section 8 rentals. 

Do you specifically go after rentals for section 8 tenants? Or do you just apply for the program for each property?

What's been your experience (other than government shutdowns impacting cash flow) with section 8? 

I have a family friend that's been an investor for 25 years, he spent the last 12 or so in houses in the 40k range and rents them to section 8 tenants. His model works because he pays cash and self manages/repairs everything himself. Basically I want to know if section 8 focused rentals are scale-able in the sense of being passed on to a PM?

@Terry Lao

I'm glad someone finally mentioned it. 

I'm probably going to be using creative financing on as many deals as possible in order to keep sufficient cash reserves and reduce my reload period to acquiring new properties.. However, I still save as much as possible. 

I changed career fields due to the gap in pay between average salary and locations that work was available in (D.C. isn't really that affordable). So I moved back to KC (hometown) and started working in the commercial construction industry. Pay is comparable and living in KC will allow me to build a solid portfolio over the next 4-8 years, allowing me to effectively buy enough cash flow.

It's been my only major step toward cutting my expenses, but what market you live in is HUGE, especially when you're talking living in a extremely pricey one.

Meal preping my lunches and dinners for the week has helped save a lot of money.

Like @Jay Hinrichs i too am a mileage junkie. I don't fly as much as I used to but 2 of my 3 cards are mileage based and I put ALL of my expenses on them. This allows me to travel for almost free internationally every 15 months (airfare wise).

I don't go out and get drinks (I'm 23 so this is not very typical) unless it's professional related and even then I do it sparingly. 

I buy work clothes (special socks and boots as I work in construction) on an annual basis when everything is on sale. 

I basically live a boring life (for now) and it's not the best but I will deal with it for a few years to get myself in a better position as this allows me to save over 60% of my income annually. 

@Lee Haenschen ,

For what it's worth, @Bill F. is right. You're taking on a second job when it sounds like your first one is taking all of your time. Is it the quick exit that attracts you and your wife to fix and flip or just a second stream of income? 

$0.02 below:

I would recommend you look at rentals. Look into BRRRR, lease option, seller financing etc. These will allow you to have a value add play with the ability to minimize the amount of seed capital stuck in a property (or even a quick exit with lease options). I would also recommend looking into a TK provider.

In my opinion you need more cash flow. Build it up so you can buy your time back. This will allow you to work on your business instead of in it (as you can draw smaller paychecks) and pay others to take on larger roles. In my opinion a successful business will outperform a solid RE asset in a given year (subjective), focus on turning your landscape company into a cash flow machine and push every dollar you don't need into REI to preserve, protect, and grow your wealth as PASSIVELY as possible.

After you get to a better balance and have some rentals under your belt fix and flip could be your second business. Just keep in mind, it is a full time job.

Good luck man!

@Grayson Gist

You're going to run into this and other moral conflicts with people in the construction industry. I work for a phenomenal company with highly skilled and educated people, some of which still speak inappropriately about others for non-controllable factors (race, gender, etc.), this is unavoidable from what I have found. I wouldn't confront him, you're fighting a losing battle.

Cheapest isn't always the best. Just like you being able to tolerate and work with someone is extremely important. I've awarded subcontracts to companies that were several grand higher simply because of the relationship with their PM/sales rep and how much easier/efficient we work together.

That being said you're going to buy more properties in the future, meaning you want to build relationships with subs that you can utilize in future projects and are glad to recommend to other investors.

You only have to live in a house hack for 12 months (typically) before you can rinse and repeat. That being said, if you were in a more comfortable position and buying a deal analyze it to fit your standard criteria. For me that's taking any potential house hack and ensuring it would meet a 12% COC (at 20-25% equity).

If you plan on living in the place for a long time (3+ years) and staving off high expenses then I'd take something that reduced my overall current annual housing expense by 60-75%. This would make it worth it on those months you had to carry the extra payment (vacancies). However, the most cost efficient and safest way is to move in with someone looking for roommates. I know you said you had a family, does that include children? If not this is much easier to find. Even with kids I'm sure there is someone out there looking for a tenant just like you. 

What do you do for work? Relocation may be your best path to a better life for you and your family.

@Christopher Lane

From what I gather, I should probably never get married.

In all seriousness, you're in the military. Meaning that if you found a woman that can handle the deployments and not find comfort in Jody while you're away, then you've found a special person. Being a military spouse is tough, you know that. So she's already supporting that goal of yours.

Why are you trying to sell her on something when so far (based off of what you've told us) you suck at sales? You're not going to be the most effective. Maybe find a mentor and work with them, they may also be able to talk to your wife and say "look at x,y, and z". 

While real estate isn't full proof, I don't agree with some of the expressed opinions of how easy it is to lose money even when you buy the deal right. Lose potential profit during a downturn/contraction? Sure, but not lose your shirt on a cash flowing deal that isn't over leveraged. 

Have you thought about house hacking? I mean you will likely PCS at some point in time now that you're back on active duty. So you can get out of CA and just buy another house every time you PCS.

Also what is your wife invested in? The stock market that she totally has 100% control over?

Don't rush into this just because you have the itch. I almost did that. Looking back I would've lost my shirt. RE will always be here. 

Make sure you're communicating properly, communication is a HUGE component of sales. You may not be the best at effective communication/message delivery.

Just my thoughts man. Hope it all works out.

@Frank Wong

That's what I thought you were getting at but I just wanted to make sure I wasn't missing something. The crazy low interest rates have not only affected the RE space but also general business. We will be seeing a lot of these companies fold as interest rates climb, spending tightens and the market self corrects. 

Good post and thanks for clarifying!

@Frank Wong

Could you elaborate a little more on the "Having the correct information and right representation will be more crucial" portion of your comment?

@Grayson Gist

First, small world we used to run in the same circles back in high school.

Second, everyone here who weighed in is dead on. There is a FB page for KC investors (most of whom are BP members) I'll try and invite you. It's a great source to getting reputable contractors information. Send me a PM if you're interested.

Third, congrats on your purchase!

The siding should be usable, and while labor is always the most expensive thing in any project if you can re-use the material that would likely save you a good chunk of money. 

Merry Christmas!