All Forum Posts by: Dan T.

Originally posted by @Mark S.:

@Dan T., congrats on your progress. I was in analysis paralysis for years, so don’t feel bad.  

I have not done business with any of the three you mentioned, but I did visit Spartan a while back and I was not impressed with the properties.  The people were fantastic, but the properties had a lot to be desired.  Since then, I’ve connected with a few investors on BP that have had pretty bad experiences with them, so it’s probably best I steered clear.  

Norada isn’t a turnkey provider themselves but more of a connector to other, supposedly vetted providers.  I think the idea with their model is the leverage you might gain if something with a provider does go wrong and they're standing behind you to make sure the provider makes things right (since they have a bunch of clients and it’s not just you as an individual going to bat for yourself).  Again, never used their services but don’t recall hearing anything bad about them.  

What numbers are you using for vacancy, cap-ex (even though property fully rehabbed on front end, things will need to eventually be replaced), and ongoing maintenance? Is your $200/month after all these mentioned reserves?

 Hi Mark,

Thanks for the note. I was not impressed with the Spartan Properties from what i saw. The customer service i received and pre-purchase consultation was amazing but I am mainly looking for the wealth building through equity pay-down; I wanted something that was a bit higher end. Appreciation would be nice and i know it's more likely in higher dollar areas as well. I never actually chatted with Norada but I always liked what i saw with Marco's involvement on the boards and he's from my neck of the woods. What clinched it for me with REI Nation is their ownership of the properties they sell and their in house property management for their clientele that had stellar reviews.

The numbers they told me to use are based on their property management group. 4% vacancy and 4% maintenance - no capex, 10% Management. The $220/m is net accounting for the 4% Vacancy, property tax, insurance, management fee, and maintenance. I may throw a capex in there as well to be on the safe side but i plan to keep a $5,000 reserve account per property for the unexpected.

Assuming i put down 25% and the property appreciates a modest 2% per year, i would see 18-20% on my money between cash flow, appreciation and equity. Even if i take appreciation out, I'm at 10%-13% in cash flow (accounting for tenant turnover ever 3-4 years - they claim this to be their average length of stay) and equity barring early move-outs or other unforeseen costs.

Hey everyone, long time listener, poster and reader - first time investor. I have been in the analysis paralysis state for a solid year. I get super close to making a move and back off when it's time to put pencil to paper. I feel that the simplicity of the BRRRR model is overstated - sure, it's the best way to create the most equity but also the riskiest way to enter the world of real estate investment. I have a full time job (55-60 hours per week), 2 daughters under 2 years old and a personal life so i started looking heavily into turnkey for my first investment.

I understand that TK isn't the fastest way to create wealth or equity. My goal is to have 15-20 of these under management in the next 10-15 years; the long game on this will hopefully outweigh the opportunity cost forfeited by choosing the TK model. In researching Turnkeys, it seems there are a LOT of companies to avoid. I narrowed it to Norada, Spartan and REI Nation. After researching the companies and markets in which they operate, then seeing Chris' replies on here and seeing his clients ALWAYS handled even in situations beyond their control, i decided to move forward with REI Nation.

I spoke to Taz to start,  he got an idea of what i was looking for. $150K-$200K property, A-B neighborhood, good schools, decent cash flow ($200+) when traditionally financed with 25% down and a COMPLETE renovation. Taz passed me along to a lender, I got preapproved and was passed over to Rick to hone in on their available properties. I looked at several in Arkansas, Oklahoma, Texas and Tennessee.

I finally saw one i loved in Barltett, TN 34814. As of today, I've locked my rate and put the Home under contract. I have a conversation planned with REI on Monday, i'll post all details as they happen.

Originally posted by @Joel Cruz de Anda:

What's up BP fam,

My name is Joel, I'm a 23 year old laborer in construction from Anaheim, Ca. I'm fairly new to real estate, but very excited to get started with this chapter of my life. My goal is to create passive income through rental single or multifamily properties and become financially free to be able to give my beautiful wife and my new born son the life they deserve. A lot of what I've learned is from listening to the podcasts and reading the forums which are very helpful. I'm very eager to get started but have no idea where to start ... any help, comments or suggestions would be very much appreciated. Would love to hear how you guys got started on your journey and steps you have taken or would advise me to take towards getting my feet wet on my new chapter in life.

Looking forward to chatting with you all soon. Thank you.

Welcome. I’m from Anaheim Hills and looking to do the same for my family. I have the capital and no construction experience, good for us to know each other! 

Originally posted by @Tyler Jahnke:

I believe Indianapolis is a great market for long-term rentals. 10% cash-on-cash is achievable for sure, but you might be in a rougher neighborhood and have to understand the risk you're taking if you go that route.

A place for under $80k that rents for $900 might be kinda tough to find, but they're out there if you look!

Let me know if you have any questions!

-Tyler

Did you end up buying in Indy, Tyler? I see this thread started a couple years ago. 

Originally posted by @Ron H.:

Somebody say NOCREI?  Our next meeting is Tuesday, November 27th.  Join us @Dan T. and @Alan Reza!

https://www.biggerpockets.com/forums/521/topics/631509-nocrei-s-november-meetup-in-anaheim

 Very cool, I should be able to make that no problem! Thanks for the heads up.

Originally posted by @Cody L.:

Originally posted by @Dan T.:

Originally posted by @Cody L.:

Originally posted by @Dan T.:

Originally posted by @Cody L.:

Originally posted by @Marla B.:

I’m on the path described by @Cody L. and now have the Refi done on my rental property and the HELOC in place on my primary. Now I'm looking for the right deal, and I'm petrified...but also excited!

 Best of luck to you! When you find the right deal go after it aggressively. You can win a deal by having the best price OR the best terms. 

I’m almost never the best price but even in this market I’m getting deals done. 2018 will close with my deals than I’ve ever done in a calendar year. And I’m almost never the highest bidder 

Your post both inspired and scared the hell out of me; you must carry your nuts around in a wheelbarrow. I hope I will one day have the gusto to chase it down like you do; I am just not sure it'll be in my first couple. I am, however, known to run once I get rolling. That said, you mentioned the Houston market in your first post, why Houston as it pertains to cash-flow? Most seem to agree that's past it's prime and 1% is pretty close to impossible there.

Uh, you're talking to the wrong people dude.  Just bought a 110 unit for $5m, it has $75k/month of rent roll.  Just bought a ~40 unit for $1.4m, it has $26k/month of rent roll.    These are not war zones.  They're inner loop or in the case of the 110, just outside but blocks from $1m homes.   In the super hot area of Montrose I got a few smaller ones in the last few months.  a 9 unit that leases for $8m/month for $650k, a 10 unit for $815k that leases for $9,500, and last year a 32 unit for $2m that leas for $28k

1% is not only easily doable, but would be my MAX MAX MAX I'd pay and I'd only pay that (I haven't yet) if I LOVED the building or area or there was some other major factor (sitting on tons of land, or new class B+/A, etc.)

Quite the portfolio; are you doing this as a sole proprietor or represent a bunch of investors? I would love to know how to get in contact with wholesalers to have a shot at SFH in the Houston area if you'd be willing to share this information.

Just a solo dude chillin in San Diego  (though that's not fair to my great team I have in Houston that manages this stuff.  I've gotten them to the point where I can say "here is another building.  Have fun!" and they make it happen).  Representing a bunch of (or any) investors sounds like my nightmares. 

I don't buy anything from wholesalers are don't buy SFH. I have a few SFH but those in that picture were just regular ones from the MLS. I used to have wholesalers try to pitch me but I've told them I'd rather them make an intro to a legit buyer and let me take it from there (and I pay them a fee if I get it) -- vs them trying to tie it up for some mystery amount and try to 'sell' it to me.

Well, as much as i would for all that to be in place for me to need nothing more than a phone call to hit the go button on the acquisition of a 5M, cash-flowing apartment complex, I fear I'm years, if not decades away from such a feat. Do you have any advice on the details of your getting started approach? I understand the concept of good locations, value-add, rent and refi (Basic BRRRR I keep reading about) but the devil's in the details. Are you scouring the MLS for these properties? What'd you do to get yourself comfortable with the Houston area - travel there to meet agents, PMs, contractors, mark the blocks in which you were interested to then research rents/plug into an analysis spreadsheet as properties popped up and just start investing?

Originally posted by @Cody L.:

Originally posted by @Dan T.:

Originally posted by @Cody L.:

Originally posted by @Marla B.:

I’m on the path described by @Cody L. and now have the Refi done on my rental property and the HELOC in place on my primary. Now I'm looking for the right deal, and I'm petrified...but also excited!

 Best of luck to you! When you find the right deal go after it aggressively. You can win a deal by having the best price OR the best terms. 

I’m almost never the best price but even in this market I’m getting deals done. 2018 will close with my deals than I’ve ever done in a calendar year. And I’m almost never the highest bidder 

Your post both inspired and scared the hell out of me; you must carry your nuts around in a wheelbarrow. I hope I will one day have the gusto to chase it down like you do; I am just not sure it'll be in my first couple. I am, however, known to run once I get rolling. That said, you mentioned the Houston market in your first post, why Houston as it pertains to cash-flow? Most seem to agree that's past it's prime and 1% is pretty close to impossible there.

Uh, you're talking to the wrong people dude.  Just bought a 110 unit for $5m, it has $75k/month of rent roll.  Just bought a ~40 unit for $1.4m, it has $26k/month of rent roll.    These are not war zones.  They're inner loop or in the case of the 110, just outside but blocks from $1m homes.   In the super hot area of Montrose I got a few smaller ones in the last few months.  a 9 unit that leases for $8m/month for $650k, a 10 unit for $815k that leases for $9,500, and last year a 32 unit for $2m that leas for $28k

1% is not only easily doable, but would be my MAX MAX MAX I'd pay and I'd only pay that (I haven't yet) if I LOVED the building or area or there was some other major factor (sitting on tons of land, or new class B+/A, etc.)

Quite the portfolio; are you doing this as a sole proprietor or represent a bunch of investors? I would love to know how to get in contact with wholesalers to have a shot at SFH in the Houston area if you'd be willing to share this information.

Originally posted by @Cody L.:

Originally posted by @Marla B.:

I’m on the path described by @Cody L. and now have the Refi done on my rental property and the HELOC in place on my primary. Now I'm looking for the right deal, and I'm petrified...but also excited!

 Best of luck to you! When you find the right deal go after it aggressively. You can win a deal by having the best price OR the best terms. 

I’m almost never the best price but even in this market I’m getting deals done. 2018 will close with my deals than I’ve ever done in a calendar year. And I’m almost never the highest bidder 

Your post both inspired and scared the hell out of me; you must carry your nuts around in a wheelbarrow. I hope I will one day have the gusto to chase it down like you do; I am just not sure it'll be in my first couple. I am, however, known to run once I get rolling. That said, you mentioned the Houston market in your first post, why Houston as it pertains to cash-flow? Most seem to agree that's past it's prime and 1% is pretty close to impossible there.

Originally posted by @Aamir Shah:

Hey Dan,

I was in a similar situation to you, living in Orange County and trying to figure out how to get into real estate. I also looked into out of state turnkey companies. I was really close to making an offer on one company, but when running the deals into the biggerpockets calculator I was just not seeing great returns (don't trust turnkey providers numbers, always run them yourself). 

The market is high here in Cali, but its not high everywhere. Take a look at IRR's viewpoint report as they track where each market is in terms of cycle. There are many markets that are still in recovery.

I looked into many markets, but I just couldn't find people that were trustworthy. Everyone was a salesman. Nobody was being honest. I finally found some good people in Detroit suburbs. Through them I have been BRRRing. I have so far acquired 4 rentals all in this area and my returns have been good. 

If you go the out of state route, I would not recommend turnkey as you can BRRRR yourself for better returns. Take a look at David Greene's Out of State investing book. The book will teach you to follow these steps:

1) Narrow down to markets you are interested in

2) Interview and build a team in that market (realtor, contractor, lender, property manager)

3) Buy, rehab, rent, refinance and repeat :)

Hi Amir, thank you so much for the reply. I just purchased the book and am super excited to start listening to it on my way home from work. Audible could be the greatest thing ever!

I keep going back to BRRRR(ing) myself but, being that I've never done anything like this, I don't have the confidence to just jump in not the capital to risk to manage a project of that magnitude from afar (hard enough to get contractors to do what I want when I am in the same room). I am sure I am adding unnecessary complication to this as it comes with the analysis-paralysis but I am not sure how to get started. I am sure this book will help. If you're ever looking for a free meal to bounce some knowledge of a fellow OC investor, let me know!!

@Cee Small We’re looking at larger homes in cheaper zip codes where the K-5 school is rated highest. Middle and High school are so far away that I’m really not too concerned with them. I try to maintain a 5-year plan as I have found too many variables beyond that benchmark.