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All Forum Posts by: Cody L.

Cody L. has started 35 posts and replied 3663 times.

Post: Looking for a co-founder of a Cash Flow Breakfast Club

Cody L.Posted
  • Rental Property Investor
  • San Diego, Ca
  • Posts 3,802
  • Votes 4,468

I'm too lazy to google...  wtf is a 'cash flow breakfast club' ?

Post: 80 Unit Apt Building in Houston, TX - 10% Cap - Recently Remodeled. Seeking Investors

Cody L.Posted
  • Rental Property Investor
  • San Diego, Ca
  • Posts 3,802
  • Votes 4,468
Quote from @Phil Avery:
Quote from @Cody L.:

I might be interested.  But you'll need to send me the address


 Excellent, just messaged you!


 Replied

Post: 80 Unit Apt Building in Houston, TX - 10% Cap - Recently Remodeled. Seeking Investors

Cody L.Posted
  • Rental Property Investor
  • San Diego, Ca
  • Posts 3,802
  • Votes 4,468

I might be interested.  But you'll need to send me the address

Post: Mortgages are higher than rent in my city. Do I move?

Cody L.Posted
  • Rental Property Investor
  • San Diego, Ca
  • Posts 3,802
  • Votes 4,468
Quote from @Account Closed:
Quote from @Amanda Black:

I am trying to break into real estate investing with my first purchase. I live in San Diego, California, and buying something to rent it out doesn't seem like a cash positive or even break even option. 

If I live in it a couple years, will this eventually change?

Or to make money, do I move to a city where this isn't the case?

Thank you so much for any advice!

I like San Diego, to visit, for the most part. But why stay? Just curious. As expensive as it is, you could redirect some of that energy into a better place at a much faster pace. That even cash flows.

Because San Diego is paradise.   I've been to a lot of places.  Not much beats the beauty of SD.  Where else do you get views like this on a random Dec night. 

Post: Mortgages are higher than rent in my city. Do I move?

Cody L.Posted
  • Rental Property Investor
  • San Diego, Ca
  • Posts 3,802
  • Votes 4,468
Quote from @Amanda Black:

I am trying to break into real estate investing with my first purchase. I live in San Diego, California, and buying something to rent it out doesn't seem like a cash positive or even break even option. 

If I live in it a couple years, will this eventually change?

Or to make money, do I move to a city where this isn't the case?

Thank you so much for any advice!


 Bottom line is this:  It's almost an economic rule that the nicer the property or location, the more likely the cost to own is going to be more than the cost of rent.

If you think about it, the reason why is obvious.  If the cost to own a nice property in a nice area was LESS than rent, then everyone would want to buy them to rent out as they could own something nice in a nice area and cash flow.   Which drives up the price, which makes it so the only people that will buy nice properties in nice areas to rent are those that don't mind a lower return.

Likewise, if it's a bad property and a bad aera, less people will want to buy them in order to own for cash flow.  This causes the prices to drop (relative to rent) till the cash flow becomes so strong that people start buying.

Post: $5.3M to use but 0 experience. Advice...?

Cody L.Posted
  • Rental Property Investor
  • San Diego, Ca
  • Posts 3,802
  • Votes 4,468

What *I'D* do with $5m cash?   More of what I'm doing.

Likley find a good multifamily in Houston.  Class C building in a B or better location.  I'd aim for something with recent distress due to interest rates.  Try to target about $50k/door for some ~$800/month rents.   

Buy two different ~80 unit buildings, with about 50% LTV from a freddie loan (to get ~6.5% rates). That's 160 units. With a good 3rd party management company you're doing pretty well with the $4m invested.

Then I'd toss the other $1.3m into short term (~5.5%) treasuries to make an extra $70k/year of interest income.

In a few years, after the market has gone back up and I've added some value, I'd refi the two buildings with a local bank.  With higher LTV (~75%) and a stronger basis, you should get all $4m you invested back.

Then I'd do the same thing again.   Take those 160 units and rince/wash/repeate

PS, this isn't something that "Well if I were you I'd..."  This is something I'm doing.

So there ya go.  That's your plan.

Post: Looking for an Experienced Mentor to Partner With

Cody L.Posted
  • Rental Property Investor
  • San Diego, Ca
  • Posts 3,802
  • Votes 4,468

There are a few brokers in Houston who do most of the deals (I won't give their full names but people like Tom W., Brian J, Shayan H., Jim H, Ryan M., Matt S.)

I'd say 90% of class C multifamily (or nicer, in the case of Matt S.) pass through their hands or the company they work for. 

Call a few of those guys.  tell them what you're looking for.  They may be hesitant to just give you their buyer contacts but some might.  Or maybe they'd be willing to FW an email from you to them.

Each of them would know at least 3-4 people (even if there is a lot of overlap) that fit what you're looking for. 

Post: CASH FLOW: Why you have been analyzing your deals all wrong.

Cody L.Posted
  • Rental Property Investor
  • San Diego, Ca
  • Posts 3,802
  • Votes 4,468
Quote from @Andrew Postell:

@Cody L.  I appreciate the continued support ;)


 Yeah, I realized the irony in my reply also bumping the thread.  Doah!  Ya got me

Post: Seller financing ideas

Cody L.Posted
  • Rental Property Investor
  • San Diego, Ca
  • Posts 3,802
  • Votes 4,468
Quote from @Dan H.:
Quote from @Cody L.:

What are the rents?   'How in the name of Zeus' butthole' do you cash flow on a triplex that's $2m? 

(quote from a movie that's in my top 5 list:  

High LTV at current rates likely requires >$20k/month rent so it will not be cash flowing under those conditions.  

but if you can purchase below value, add value, hope for historical appreciation over the long term, can handle the negative cash flow, it can still be a good investment. 

in Dec 2021 I purchased a value add quad for $2.25m.  It appraised at purchase for $2.5m.  I have rehabbed 3 of the units (if rates were still low I would have rehabbed all 4 and refinanced).  The RE is worth ~$3.2m.  In two years I made ~$850k in unrealized gain (including the $250k made at purchase).  The property likely still has little to no cash flow even with 3 units rehabbed (in part because 2 units are struggling as STRs, the rehabbed LTR has rent of $4.2k which at the loan terms at time of purchase may have had some miniscule cash flow but not at today’s rates if all 4 units were rented at the market price).

 
note I have not purchased since Dec 2021 (purchased $4m of RE that month), but if I had purchased San Diego RE a year ago at retail (mls purchase) the appreciation would have provided a good return.  Of course I do not own the crystal ball that tells me with certainty what the appreciation will be, but I have confidence long term the appreciation will be higher than CPI.  


I agree.  If you're not looking for cash flow and want to bet on appreciation (not a bad bet for San Diego, historically), there isn't many places that are better to buy multifamily.   Especially if you can buy under market and get some day-1 equity to help speed things up. 

Post: Looking for an Experienced Mentor to Partner With

Cody L.Posted
  • Rental Property Investor
  • San Diego, Ca
  • Posts 3,802
  • Votes 4,468
Quote from @Account Closed:
Quote from @Steve Sorensen:

Hello!

I’m looking to partner with an experienced mentor within the Houston area. I have passively sought out a mentor in the past with mild success, and now that I own four properties, I feel that I have the basic experience and have proven my level of commitment to financial independence through real estate to add tangible value to a mentor/partner.

Here is what I am generally looking for in a mentor:

  • 15+ years’ experience in real estate investing
  • Has been built their wealth/portfolio from the ground up, similar to the path that I am on (i.e. worked a W2 and invested on the side until their real estate portfolio was large enough leave their W2)
  • Be "retired" from their 9-5 and completely financially free
  • Own at least 30 doors
  • Invest heavily in the Houston market
  • Wants to partner on projects and provide project financing (this is not a requirement but I certainly feel this would be more mutually beneficial)

Here is what I intend to offer:

  • Shared equity in projects
  • I will do all the heavy lifting and day to day coordination for projects (with the understanding that the mentor will support questions and assist in critical decisions)
    • I plan to make real estate investing my full time job so this would be an opportunity to grow my mentors portfolio with significantly reduced time commitment for the foreseeable future
  • Provide a few hours of my time each week free of charge to assist with whatever the mentor would want within their business

My real estate background:

  • I purchased my first property, a triplex in Minnesota on an FHA loan, in December 2019.
  • My second property is my current residence which is a house-hack in Denver that I’ve been in since 2021. I do monthlong rentals in the upstairs two levels and I live in the basement full time.
  • I've BRRRR'd two additional SFH's in the last year and a half, one in Texas City and one in La Marque. These are both long term traditional rentals.

I’m looking to make my next investment in Q1 2024 and want to identify my mentor by the end of this year. Please direct message me if you have interest, I’d love to get on a call to consider a potential partnership and discuss each other’s real estate goals.

Thanks in advance!

I know there are a couple of REIAs in Houston (NationalREIA.org) and some groups have an entry fee of $20k or more, so before you commit, make sure they're going the direction yuo want to go.

I don't think anyone in Houston with a large portfolio exists on this site.   The ones that claim to be big shots are scammers I bet.