All Forum Posts by: Dennis Cosgrave

My real estate attorney always told me, you always make your profit on the buy. If you pay top dollar for turn key you are either going to earn a smaller profit or it is going to take longer to get the return you want. If you are handy, it makes more sense to buy a fixer-upper. The objective is to add more value than what it costs.Even if you are not handy, if you are able to hire a contractor, get the work done, and still come in at a lower price than turn-key, the deal might make sense. 

Dan Heuschele,

According to the California legislative analyst's office, California suffered a net out migration of 1 million people between 2007 and 2018. The net out migration continues at the rate of 200,000 per year. Read the full report here.

https://lao.ca.gov/LAOEconTax/Article/Detail/265

California may have had a $9 billion surplus. It now faces a $54 billion deficit. Read the full article here.

https://www.politico.com/states/california/story/2020/05/07/california-faces-54b-budget-deficit-1282926

The past may have been good to California investors but from the current data, the future does not look so promising.

I asked the same question when I first started out. It seemed logical so I moved forward and got my real estate license. Taking the course was definitely worth it; I learned a lot. I was surprised how it didn't really help when it came to investing. In certain jurisdictions, if you are a licensed agent, you are required to disclose that on any offer you make. That sometimes alarms the seller. They think, he probably knows more about this property than I do and since he is willing to buy it, my asking price must be too low. So they counter-offer at full price. I ended up hanging my license with a broker just to get access to the MLS. When I wanted to put in an offer, I would get another agent to present it. That circumvented the disclosure requirement. I found that I got a better deal with less hassle.

How does anyone know this is temporary? You now have talk of defunding the police, not only in NYC but in other cities as well. Why would anyone want to live in an environment where there is no law and order? Maybe some people think it is great to sleep with a gun under your pillow but that does not sound like my idea of peaceful living. 

Another variable in the equation is the Work From Home trends. During the COVID lockdown many people worked from home and enjoyed it. That trend is not going away. Those WFH discovered that they did not have adequate work space, so as Darius pointed out, people are choosing to move to the suburbs for larger space at the same or lower cost. Commute cost and time is no longer a consideration for them.

I agree with the above comments. The only reason I would partner is because I was a newbie and then I would only partner with someone whose experience is worth it. Even then, I would have an attorney draw up a comprehensive partnership agreement so that issues like those described above are dealt with quickly without protracted and expensive litigation. 

If you are a newbie, I would suggest you partner with an investor who has a lot of experience. You want to be a hands on investor. Get your hands dirty and ask a lot of questions. The probability is high that your investment will be profitable and you will get a free education in the process. 

You have several options. I too had a number of properties and they kept me very busy; too busy. I chose to sell all those properties and with the proceeds, I purchased a 36 unit apartment building. The gross income allowed for a live-in property manager who took care of all the daily maintenance. I collected the rent and paid all the bills. I visited the property once a month just to make sure everything was in order. Freed up a lot of my time for other pursuits.

Depending on how concentrated the locations of your properties are, you could always hire a property management company. The key is to find a good one, which from what I have read on here, can be a challenge. 

The third option is to calculate your ROI and investigate other investment options that produce the same or higher ROI. At the same time, you have to assess the level of risk associated with the ROI. Difficult to do in the current environment.

All of the above are valid concerns. In addition, I would compare market rental rates to the monthly cost of home ownership for comparable properties in the area. If there is a significant disparity, i.e., rents are considerably lower, then it might be an attractive investment. However, if there is little difference, then the probability of rents declining along with home prices is much higher. In that case, pass on the deal, or calculate your ROI and your offer price that reflects the likely decrease in market rents.

So far. But looking at the direction the country is going, how long will that remain true?