All Forum Posts by: Bryce Deeney

My wife & I moved to Scottsdale in 2012, and had no family/friends in the area. Fast forward to 2020, we have 7 additional family members living here, with 5 more planning on moving to the area within 6 months. I also travel a lot (20+ trips per year), and having seen the majority of the 'nice' areas most states offer; I can attest that if Scottsdale isn't the #1 place to live in the US, it's very, very close. We are lifers! 

@Michael Slockers feel free to send me the top properties you don’t personally pull the trigger on!

How much are high end cabinets typically marked up by contractors? I’m doing a large scale remodel at my house and the cabinet costs definitely gave me sticker shock (45k). It’s a large kitchen, plus an island, plus a bar, laundry room & 1 bathroom... so it’s a lot of cabinets! My question is for a large job (spending 200k+), how much expected markup should I pay in the cabinet bill?

I would think IRR is more relevant than just purely CoC; but the reason why you are investing is the driver. If you are purely doing a FIRE method, CoC is all you really care about. If you're looking to build wealth, IRR is more important. If you're looking to 1031 into larger properties, appreciation is more important.

With all of the different reasons why you are purchasing real estate, getting a good deal so you have built in appreciation is by far the most important! Having multiple exit strategies is also important! Not buying a J O B is also important! CoC is one of several things to consider when buying a property.

Example #1: You purchase a $200,000 house at 20% down (40K), and it provides a COC return of 12% ($400/mo.). Woohoo! Oops, you bought it at full price! That's okay though, it provides healthy cash flow! The local market is stale, and has been for years... so your appreciation will not outpace inflation and selling costs... so you're stuck with your awesome CoCROI but have no other incentive. Still a nice buy! 

Example #2: You get a great deal on a $230,000 house, by getting an offer accepted at $200,000 with 20% down (same $40,000 down as example #1!). Let's say this house only pays out 6% COC ($200/mo.). Oh no, you're returns aren't amazing upfront. Your friend who bought #1 says his deal is better! The difference is, your house is in an up-and-coming area. It's in a city that is growing. 10 years from today, the house is worth 50% more, allowing you to either A: Cash out Refi, B: Sell and 1031 into much larger properties, or C: Sell and make insane returns on the investment!

Which deal is better? The answer is it depends on what your goal for buying the property is! If you are looking to retire on 'passive' income with CoC, #1. If you're goal is to buy on building wealth, #2 is WAY better. 

@Bob Prisco

What areas in Cleveland do you prefer? It seems most of what I’ve seen on BP prefer 30-45 min west of downtown.

Depends on the local market as well. I look at investment properties in Phoenix and Eastern Washington. Phoenix generally won't provide a huge cash on cash ROI, but the appreciation (and future expected) are massive; so I'll take a thinner upfront return for long term gains. In Eastern WA, the market is more stable (lower highs, higher lows in appreciation), so knowing I likely won't get more than my money back on [Appreciation - Inflation], I need higher $/door to justify the investment.

@Donald Thomas amazing! Thanks for sharing your experience.

Get used to providing your EIN# to any lender or contract you are signing, especially as a small business owner. 

@Calvin Ozanick sounds promising! Feel free to PM me any opportunities that have high CoCROI that you aren’t picking up yourself!

Welcome! I actually grew up in Clarkston. Still have lots of family in Lewiston/Clarkston. I'd love to own property up there again someday, although the appreciation 'x' factor doesn't seem to exist, you should still be able to find deals that cash flow! Best of luck.