All Forum Posts by: Mitchell Goldstein

@Kincaid Ryken
Please read each word in my statement. I did recognize that "you start with the numbers" to decide if the property is even worth pursuing. However, solving the sellers situation will cement the deal. EX: through discussion you find that the seller NEEDS $40,000 for some purpose that you discover. The property can support paying $60,000 but you only need to pay $40,000. Therefore, why offer $60,000 as your Highest and Best offer as so many gurus suggest? I start every sales conversation with a long warm up. I do not speak numbers, nor do I ask much about the property. I ask about the neighborhood, the family, their plans, anything special that they want to do, the kids, etc. However, most importantly, I ONLY speak to those who can not even pay their property taxes; they are tax delinquents. This is my niche! My research also shows the amount of equity that is available. I start with the knowledge that the seller is in a precarious financial position, then I determine the available equity. Because I already know how low a seller can go, (the numbers) I also know that, if the seller views me as a friend, having their best interest in mind, (the situation) I will then have a better chance at making a transaction. Again, find out what the seller wants to accomplish and give to them - but only in a way that you can make a profit. 
Good luck - CoachMitch.com

I'm not trying to be negative, and while Dallas is a hot market, unless you must have tax deductions, why enter into a transaction where the loss will be several hundreds per month for the foreseeable future and also run the risk of lawsuits and have to deal with tenant issues?

@Cynthia Anderson Sadly you do not give enough information to make an accurate analysis. But I am always biased to flip. Presume a $515,000 purchase with a $10,000 rehab creates the $600,000 selling price, netting $75,000. That is a nice, quickly made, pretax profit.

Not speaking to all the hassles, costs and liabilities of renting; presuming a $1,000/month profit, it will take 6 years 3 months for AirBnB rentals to make the same $75,000? If making $2,000/month profit, it will still take over 3 years to make the same $75,000 - if we are not in recession.

The idea of buy and hold for rental and refinancing is fine. However, flipping makes a big profit right away. Take the profits and get another flip. Then do it again! Good luck.

CoachMitch.com

@Steve Sorensen A beautiful wood floor sets off a room just like a nice head of hair sets off a woman. Get the best wood floor you can afford, quality shows. Complementary area rugs will warm up the room. Good luck.

CoachMitch.com

You are OVER THINKING things. Real estate is really simple and easy but it is not obvious. Almost all think real estate is about numbers. Very wrong! You start with the numbers but you only make a deal if you solve the sellers situation. Solving a situation is emotional and numbers are not emotional. Solve a sellers situation and they may give away the property. Investing is a human sport. You state you want to LIVE a life. That is an emotional desire. Money is simply the mechanism used to get the life we want, but it is the life not the money we crave. Find out what someone wants to accomplish, give it to them, but in a way that you can make a profit and you will make enough money to LIVE a life.

Goto CoachMitch.com find my phone number and call.

 Many years ago, I contacted my city government and asked for a listing of all the multifamily properties in the city. The list I got was huge, even for a small city of 100,000. However, looking up each property on the tax assessor's and the tax collector's sites, contacting Code for violations or improvements and seeing the Path of Progress, plus doing basic analysis, showed me that I could narrow down the properties to Good, Better and Best leads. It took time but the education was invaluable. Then you can contact specific property owners because you know a good deal about the property and the area. Their reception will be respectful because you are knowledgeable. It will result in a high degree of seller financing, especially welcome today, when high down payments are required. Doing this process gets good results, compared to bulk mailers which get a low return and a hostile attitude. Good luck

CoachMitch.com

 Many years ago, I contacted my city government and asked for a listing of all the multifamily properties in the city. The list I got was huge, even for a small city of 100,000. However, looking up each property on the tax assessor's and the tax collector's sites, contacting Code for violations or improvements and seeing the Path of Progress, plus doing basic analysis, showed me that I could narrow down the properties to Good, Better and Best leads. It took time but the education was invaluable. Then you can contact specific property owners because you know a good deal about the property and the area. Their reception will be respectful because you are knowledgeable. It will result in a high degree of seller financing, especially welcome today, when high down payments are required. Doing this process gets good results, compared to bulk mailers which get a low return and a hostile attitude. Good luck

CoachMitch.com

Notes can be a worthy investment - when the marketplace is predictable! Today, the marketplace is not predictable and, IMHO, notes are a significant risk. 

Creating wealth has been defined as making 15% over inflation. If inflation is accepted at the current 7% level, adding 15% means we must earn 22% after tax. I am sure most of us understand the government habitually understates inflation, which is probably at least 15% and adding 15% means we must earn 30% after tax. This is almost impossible for regular notes, excepting some types of non-performing paper, which has its own issues.

I feel that, currently and continuing until things become predictable, that the safest way to do notes is to buy a property at fire sale pricing, raise the price to market or 10% above and create a seller financed note, which, after some seasoning, can currently be sold at a small discount. 

I no longer see value in holding real estate, excepting those specific situations which are government supported, e.g. subsidized housing, adult living facilities and the like or if getting the real estate at fire sale prices, e.g. 25% of current fair market value. I agree with Chris Seveney that seller financed notes will be a dangerous note to own because they are overpriced.

Government policy is quickly showing that it wants to eliminate small real estate investing, e.g. the law in Illinois that requires a realtor to be part of ANY transaction, thus curtailing creativity and raising costs. Government has already allowed our manufacturing base to deteriorate or move to China and in the coming recession the service industries could be decimated.

I expect the Democrats to want to have good economic times for the coming election. They will continue big spending, witch will further inflate the economy. Usually low inflation is good for stability but wages never keep pace with higher inflation and costs are rising quickly, e.g. gas and food, so, with household income remaining steady, late payments will rise, putting notes in jeopardy.

In these times, cash and junk silver are safe, all else are speculative, including gold and real estate. Therefore, I only concentrate on distressed property situations, use $1 to option a property at a nice discount and flip ASAP without a fix up. My long term exposure is $0 as any potential loss is limited to $1. 

Best of luck to all.

CoachMitch.com

@Brian Nally @Scott Matthew C. @Zach Carner

This is an interesting discussion because it pits a decent projected single family yearly rental cash flow, e.g. $506/month x 12 = $6072 yearly profit before taxes versus a proposed sale profit of $38000 and what could be made from that. 

EX1: If finding a property in the Tax Delinquent Data Base, like I do, and using the $38000 as a regular down payment in a VA loan, a 4 plex can almost certainly be gotten and the cash flow profits from 3 rentals could easily be more than the $506 with the added benefit of Zach living rent free in the 4th unit. $300/month x 3 units = $900/month x 12 months = $10800 yearly profit.

EX2: If finding a property in the Tax Delinquent Data Base, like I do, and using the $38000 as a down payment in a 1031 tax deferred exchange, then there is the significant potential that a 10 unit could be gotten with substantially more rental income and bringing Zach that much closer to his financial end goal. $300/month x 10 units = $3000/month = $36000/year profit, 

In addition, Zach would not need a property manager in Washington State as this would be his opportunity to learn the property management business so that when he moves in 3 years Zach is knowledgeable about how to operate a complex and understand how to oversee a manager from a distance. In this case add the 8% property management feed of gross rents back into the $36000 profit. If rents were $1200 x 8% = $96/unit/month = $960/month = $10560/year. The property management fee is 29% of total pretax revenue. Therefore, if Zach were to manage, his profit would be $46560.

$6072 versus $46530. What do you think?

CoachMitch.com

@Ravi Kiran    Google: "public adjusters" Chandler Arizona (or town property is in) The percentage I paid was reasonable: $40,000 received, about $1,400 paid in commission. I would be interested to learn what you find out. I have someone I can refer to you if desired.

CoachMitch.com