All Forum Posts by: Bruce Lynn

@Shelli Neal Not sure what the rules and regs are for STR in Plano, but I think I would pick a different city. The residents do not seem to be STR friendly, so I would expect more restrictions in the months and years to come. At least attend some city council meetings where it is on the agent, or talk to your councilperson for advice. There have been several high profile incidents in STR in Plano over the past couple of years that I think have made the residents pause to think about how that works in residential neighborhoods. If I remember correctly a couple of murders and maybe a couple of big trafficking cases.

I think I would pick one of the smaller towns around Plano that might be more friendly or even embrace it.

@Eric Nielsen Great idea. Remember there are a lot of restrictions in Fort Worth and Arlington. People still do it, but always a risk if you try to go around the city rules and regs. Probably plenty of opportunity in some of the smaller and surrounding cities though. As best you can find out the regulations and if possible the sentiment of the community. Places like Dallas and Plano many not have strict regulations yet, but seems like the community is firmly against STR, so that's probably not the side you want to be on. Easier to be in a place that embraces it.

Where are you thinking about buying? I have seen a pretty neat place in Ft. Worth recently that had a nice ADU and a couple of decent rent by the room type house hacks. One in NRH and one in Princeton. If you are willing to hack, those might be much more lucrative than STR, but also probably more work.

@Evan T. Ong   You've received a lot of great advice here.  I wish I had your resolve and ambition when I was 15.  You're on the right track.

Just a couple of ideas for you.

#1.  Is there a trusted adult that could take you to some of the investor meetings?  Family member, rich uncle, family friend that your parents would trust.

#2.  Are there meetings or education online that you can attend vs going in person?

#3.  Could you start a real estate investment club in your school and have speakers you want to hear, come to you in a safe environment?

#4. First deal....save/bank as much cash as you can between now and 18years old.  I'd say at least $50,000, but with your goals $100,000.  You can do this.  You have 3-4 years.  $100,000/4 is $25,000 a year.  Invest some of it in real estate companies with a Robinhood account, so you learn some of the lingo, read their reports, study how they make money.  Plenty of people have done stuff like this, including in DFW area.  I would also study the billionaires you want to be.  What jobs did they have as kids.  Read 10 of these before winter break...Buffet, Trump, Bloomberg, Craig Hall, Trammell Crow, Jerry Jones, Michael Dell, Bill Gates, Bezos, Sam Zell, Li Ka-shing, Chuck Feeney, Ong Beng Seng....(Dell and Gates invest plenty of money in real estate).  Could you start a youth real estate investors podcast and interview some of these people?

#5.  Go to school...college is good. Not 100% necessary as Dell and Gates prove, but that's also where they got their start.  Learn to write well, finance, economics, engineering.

#6.  When you read, make some highlights, underline some passages, make notes.  Have a page of notes you keep with the highlights and important things you want to take away.  Review those every so often...maybe quarterly.

Seems like there is all kinds in and around Denton, especially all around 380 and 35.

#1 I would say, be fast, don't let things drag out.  You don't want to do loan extensions, pay more taxes, pay more holding costs.   Have plenty of reserve cash saved up in case you need to bonus your trades to do your job next.  Know what your holding costs are so in case it takes 4months to sell vs 2 months you can still profit.

#2 have/know well six trades for every major....so six masons, six HVAC, six framers, six foundation guys, six roofers.  If you're building one at a time and one of the big monster production builders needs work done from your #1 go to, you need a backup plan, and a backup plan to that backup plan.

#3.  Less fun and takes more time, but I would suggest before you start on your own, is to go work for any builder in the area.  Maybe as a construction manager, warranty guy, quality control or something.  You'll probably learn a lot from the big guys, but even small/smaller builder would be a good idea.  Learn on someone elses dime.  Backup plan, go to work for the city building inspections department or a third party inspector contracting for the county.

#4. Know your market inside/out backwards/forwards.  Know lot prices where you want to build.  Know every vacant lot where you want to build.  Build your database, who owns them, do they want to sell, sell at what price, what are other builders paying?   Know the prices of your trades, know your material costs, know your end sales prices.  Start visiting building sites so you can meet the trades and see finishouts in different price ranges.  If you're going to start with one at a time, know and study your competition.

Good luck....you are right in the heat of things.  I just think there is probably no better market in the country to do what you want to do and have the best opportunity for success.

@Hana Mori

I'm sorry this happened to you.  No fun at all.  In my experience it is not unusual at all.  I see this most often, when people go shopping on the national websites chasing rates.  If that's what happened, you are not alone.   What I have found over and over and over is when people go chasing rates, bad things just like this often happen.  Rates change, leverage change, fees go up, and sometimes they just leave you hanging with no closing and no communication.  It just feels like a big trap.  We try to warn our buyers about this and to use one of our trusted resources that is normally local, in the business for years, super knowledgeable and has a local reputation to defend and maintain.  Sometimes people just get so focused on shopping rate, they forget about fees, and many lenders understand that, so they quote a low rate, but don't tell you there are buydown fees involved, or their fees are there to make up for the low rate.

Next time use a trusted local resource like @Andrew Postell.  He is in the Ft. Worth area, a fellow investor, active on bigger pockets, Marine, and all around good guy and smart lender.  We also have other great lenders we work with regularly, some as long as about 20 years.  Plenty of lenders come and go, but when they last that long, they're doing something right and get lots of repeat business.

Quote from @Ezekiel Sandoval:

Looking to make new connections in Alvarado,TX. Have a property that I am looking to offload, please message me if you would like more info!

What do you have?  Do you still have it?  

Quote from @Srinivas Bondada:

Hello All, I am new here and was trying to check if anyone can provide the tools I need to find the best market and also any other suggestions are welcome.

I'm not sure there is a "tool" to tell you the best market to invest in.  Also "best" will vary from person to person.  Since you're in DFW, I could for example say the best appreciation market over the last 10 years is Highland Park, if appreciation is your goal.  However if you need rental income, it might be the lowest ROI.  Also purchase price is probably $5mil and up for a single family house, so that could be a limitation for many investors.

Since you are in the DFW area, I'd say there is probably no better place to invest than right here in your home town.  Plenty of job growth, plenty of population growth, diverse economy, newer homes, landlord friendly, and so many other factors.  While many others here have suggested where they live/work, I firmly believe for a first time investor in most cases, investing in a market you don't know well just adds a level of risk you don't need to take.  For your first project it is nice to be able to see it, talk with all the people involved, know the area, know the schools, know the employers, know the neighborhood, meet your trades, etc.

Remember the 90 day rule is from the time your deed for purchase was filed until the time new sales contract is signed from what I understand. That is for FHA loans. Do you think FHA is the most likely financing? Even if it is, I would go ahead and list now. You just never know. Maybe you get someone paying cash or using conventional financing. Something like 1/3 of the properties sold in DFW are for cash. You can put a note in the listing about the 90day timeline. I see this often. So if you get an FHA buyer, you just wait to execute until day 91.

As far as comps go, I would say savvy agents and the appraiser will all look at the property history. If you bought off MLS, then they'll know what you paid, if it is day 31, 61, or 91 or 361. If they use it as a comp will depend on what work you did. I would make a list of all the work, and for the appraiser include the costs, so they can justify the new valuation. Even if you bought off market, great agents should be able to guess what you spent on rehab and also make a guess as to how much you paid, unless you paid cash.

As an agent, I would suggest you connect with a great lender who can walk you thru all the nuances of FHA lending on a property like this. Some might require two appraisals for example. You'll want to know all those nuances just like the 90 day anti-flipping rule, so you don't waste time when you get a contract.

#1.  Pick where you want to live.

#2.  You can work on your license now if you have time.  Hit the ground running the day you graduate.

#3.  Start building your database.  Detail out everyone in your phone, linkedin, FB, IG, your BB buddies, your schoolmates, everyone who would potentially do business with you or feed your business.  So when I say detail them out, have all their details, full name, address, phone, birthdate, personal info, etc.

#4.  When you know where you will live, ask your career office to connect you with any alums in that area, ask your professors to connect you as well.

#5.  Sometimes it can take a little while to build up your commission income, so if you have to take on work for cash, do something in the field that puts you in the path of future business.  Leasing agent, maintenance guy, property manager, city hall-economic development, building permits.  Think about where you can be in the path of buyers, sellers, and investors.

Fair Park is not for the faint of heart.  You may get better returns there, but also have more headaches.  One of my criteria for investing is not to buy in any area where I would not feel comfortable sending my wife to collect rent in the dark.  

Everyone has different comfort levels of what and where they buy, so you just have to decide what's best for you.

Typically I say go north....north of McKinney, or draw a circle around DFW and invest on the outskirts of that circle.  That's typically where you'll find a nice combination of the better school districts, sales prices, and rent prices.