All Forum Posts by: Chris Field

"buy while blood is running in the streets"

-Rothschild

The same markets that boom with every upturn are booming, same crap that always happens. 

Take FL for example since I'm most familiar with, in 2009 I went on a wonderful dead subdivision tour, now I'm sure they are building. At some point in the future I'll do it again. That entire state is full of dead dreams and an endless supply of land to have them with. 

That's a hard question, and one that really cannot be answered without a crystal ball of where rates are heading. 

For starters forget about fixed rate mortgages they don't exist in the commercial sector. Your either going to be looking at a balloon or some sort of ARM.

When you run your numbers you need to figure in that interest rates may be higher in 5-10 years when the loan adjusts. So plan accordingly, either by simply having enough cash flow or by paying the note down faster. 

IMHO a lot of investors have some very aggressive valuations on properties because money is cheap and they assume it will stay cheap. We have an entire generation (including me) that have never borrowed at over 10%. I believe that will change at some point, but that's simply my opinion. So I pay down my commercial mortgages like its going to be 10% when they adjust, which is double what I am currently paying.

Cash flow is king, if your rentals don't have solid cash flow your going to be in trouble the next time the market corrects. The only number that matters in residential rentals is how much you make per door, that's it, the rest is smoke. 

If you have solid strong cash flow you will be able to weather 2008 like storms, and actually make money on your rentals which is the entire point. Most landlords actually don't make very much money on their rentals.

Equity is a different animal and will be their, and healthy if your cash flow is healthy.

Sell it and move on, consider the loss part of your education in RE like paying for a college class. 

Every investor will buy duds once in awhile, just move on.

Invest where you live, I guarantee within a half hour drive of where your sitting their are  a few good deals kicking around. 

Investing out of your area is expensive, you have to hire everything out. I'd only buy out of my area if the property was large and could support its own staff, like an apartment building for example. For one SFR its not worth it the margins are not their.

Personally I believe when you start out you should do as much yourself as possible. It helps you learn the business and save money. As you grow you should be more hands off, and concentrate on running the business not working in it.

I started off sweeping floors and helping to do site work. I know most of the jobs, subs can't BS me because I have been their and done it. I also know what they cost. 

Real estate by its nature is a very hands on business and I have seen a lot of new people struggle with what simply is a basic lack of knowledge.

I do builders risk policies in my company names all the time, its common. Find a better agent. 

Price per SF on the internet is a pretty useless discussion. Prices very so wildly from region to region its simply impossible to compare. They also very between builders, for example I know my cost per SF in my area is lower than a bunch of the new guys that just popped up, because they don't have the buying power, experience, or relationships I have. Stuff like that doesn't happen overnight. 

I have seen plenty of new houses in the $180k range all over the country so clearly someone is making money doing them. The OP needs to do research themselves in their area. Its not as simple as saying land should be X amount of the finished house, that is a good very general guideline, but that's about it. 

I have never had business cards, one of these days I'll get around to getting some.