All Forum Posts by: Chad McLeod

It’s already been said, but be very careful taking advice from someone who has never actually done whatever it is you’re looking to do.  Simply put, that opinion is worth next to nothing compared to people who have actually had the experience. 

It’s funny when people say don’t invest OOS because you’ll talk to someone who promises you the world and then you’ll buy in a bad area and lose your butt.  I’m sorry, but if someone is that naive/lazy/trusting they are destined to fail in whatever they do.  OOS investing is not that person’s problem, THEY are their problem.

Research, research, and then research.  Talk to multiple people.  Get referrals.  Do background checks on owners of companies.  Yes, background checks.  I’ve eliminated companies by doing very easy, limited Internet research.  I personally feel you should research markets for months before choosing one, but that’s just me.

OOS investing comes with some risk, but if I invested locally I would be putting six figures down on a property that wouldn’t even cash flow.  Tying up that much money for years with no monthly income is MUCH riskier, IMO.  

64134, Ruskin Hills, is not a great area.  Properties are cheap and the numbers look good because there is a fair amount of crime there.  A few years ago I bought a house on the outskirts of Ruskin Hills and I've had tenant turnover every single year.  None of them have been happy with the area.  Also, a couple weekends ago somebody burglarized the house by throwing a huge rock through the sliding glass door.  If I could do it over again I absolutely would not buy there.  Yes, it's cheap, but IMO with real estate you get what you pay for.  I'm not saying people can't have success there, but just know you will probably have your fair share of issues to deal with if you do buy there.

Good luck with whatever you choose!

Not to hijack the thread, but what if you were close to maxing out your 10 loans and had some cheapies on the books like $50K loans.  Would you guys pay those down to free up another loan?  

Thanks so much for the detailed response, @Robert Matelski!

This is probably pretty minor compared to others, but I had a pretty rough experience with my first PM.  He was a one-man shop but I got multiple referrals from people who used him and I figured if it didn't work I would just switch to a bigger company.  Well, almost immediately after he took over as PM he completely dropped off the face of the earth.  Literally no communication -- no replying to emails, voicemails, nada.  I found out later that right after he became my PM he found out his wife got cancer.  I think he just kind of lost it and went off the rails a bit.  

It's obviously a horrible thing for anyone to go through, but I think at some point there needs to be a phone call or email explaining the situation to your clients if you're the only guy.  Needless to say I go with bigger companies these days!

Thanks for the info, @Tom Ott!

This can probably be chalked up to "don't believe everything you read online," but a few different websites seem to say that 44118 has a lot less crime than 44106.  What's interesting is that 44118 seems to be the area that's right up against East Cleveland, whereas 44106 is further south.  The southwest corner of 44106 looks especially bad.  But again, this is nothing more than what I'm seeing online.  I'm curious to hear what the local experts think.  And don't say it's a block-by-block basis!  Kidding. :)

Heresy!  Just kidding.  I also like to keep them separate.  I have real estate, a 401k and traditional and Roth IRAs.  I view real estate as my "for now" money and the stocks as my "for later" money.  I figure if I spread the funds out maybe if I close my eyes and swing hard enough I might actually hit something. :)

It's already been mentioned in the thread, but there typically isn't a lot of appreciation in the Midwest.  So I don't think it matters too much what the real estate market is doing, you're most likely not going to hugely overpay when you buy there.  If the market dips 15% on a $80K property that's what, a drop of $12K?  Compare that to a 15% drop where I live and you're talking about a six-figure drop.

That's one of the ironies of investing out there -- people love to talk about the lack of appreciation, but the other side of that is that you aren't going to have huge highs and lows, while at the same time getting great cash flow.  

Yessir!  If you have any questions feel free to ask.