All Forum Posts by: Daniel Miller

I know a couple guys who do residential beach development let me know. I cant go to them without an address though...PM me

Do you have an address?

Interesting ideas. Jimmy Klein when you have a dense urban core with not much land to work with companies and investors have to get creative and think outside the box. I understand where you are coming from but being creative is a big part of Real Estate investing. I have not pursued this sight it has always piqued my interest and to this day sits vacant. More risk more reward.

Using an artificially enhanced 2005 value to justify making a sound investment decision in today's real estate climate holds no water.

I congratulate you on your success. I was not trying to imply anything and was only sharing my thoughts on low-income investments. Generally, my belief is that yes it might be a good cash flow situation but it's thinking small. And it's kind of boring. I like to look at properties, and I strive to purchase properties, where I would be proud to own the property. I know many southside investors and they do well. None of them are overly wealthy...another trait I noticed and like I said I like to set my sights high.

I have not heard of them before but any person or entity that is in between you and the deed to a property has an obvious financial incentive and motivation in the deal. They are a business that creates value through the purchase, renovation and resale of properties to investors. It's not the investing route I would take but each person walks their own path. If the deal was really good they would keep it for themselves. This eradicates any chance of you hitting a "home run" with your investment. I prefer to derive my deals organically through research as there is potential for future appreciation rather than buying $35,000 properties in South St. Petersburg that have not seen appreciation in a quarter century.

I was not looking to add anymore properties this year. First, I am broke. I spent everything I had in 2014 and anticipated spending 2015 fixing up the properties I purchased and boosting rents. Second, I thought I had maxxed out my ability to finance deals. The persons who had previously helped me finance deals were no longer in a position to assist me in financing the purchase of a property. 

All that being said there was a triplex I had my eye on for a while. It was on Homesearch. It had been auctioned three or four times with no bidders hitting the reserve. I convinced my parents to bid on the property. I figured I could manage it for them (I have a small management company) and it would be a good deal all the way around. They won the auction. I really liked the property and it was bugging me that I could not get some sort of equity stake. I thought about it a lot and contacted a friend who liked to hold Private Mortagages back by Real Estate. He did not like the headache of tenants. He did like the returns from holding mortgages (compared to keeping your money in a bank). I told my parents that I would buy the Triplex from them and give them $1500 for purchasing the property for me. I convinced my friend to buy the property from my parents and in turn I would take out a mortgage with my friend. 

Here are how the numbers broke down...

Purchase Price $58,000 (+3400 closing +1500 parents) = $62,900

Going to invest $10,000 into the triplex

Square Footage 2300

All Block Construction ( with wood frame houses/structures I use the 50% rule. With block I tend to go with 45% )

Rents will be about $0.80 a square foot monthly or $9.60 annually. 

Total Rents = $22,080

Expenses (45%) = $9,936

EGI = $12,144

Mortgage = $60,000 @7% interest over 12.5 years. Payments of $601 a month for 12.5 years. 

601 x 12 = $7,212

NOI = 12,144 - 7,212 = $4,936

I am pretty stoked about this deal. The area the subject property is in will not appreciate much but it should cash flow for years to come. Deals like this do not come around too often. No money down and I will be cash flowing almost $500 a month. Win-Win for everyone involved in the deal.

Jon Holdman is right. Nearly impossible to pick and one can argue that any list created is too subjective. Tampa is not too different than any other city when it comes to property expenses. If anything it is less expensive. Seeing as it is a block house I would probably forego the flood insurance (unless you can't). 

@Dave Bingham gave a very good current update of our area. Pinellas is tough right now. Most of the inventory online has been for 6 months or more. Mulit-family sellers are asking for big money right now and for the most part are getting it. 

22nd Street South, south of Central Ave is going through a similar gentrification. Federal and State funds have been used to spruce up the area and Midtown is currently being given a major facelift. 10 years will tell if the effort was worth it. 

Good time to be a multi-family seller. Artificially low interest rates have boosted the values of all income producing assets and properties (across all industries) while investors accept lower and lower returns due to the extended availability of cheap, cheap money.

It's kind of complicated. His Dad was a land speculator. So, half of his properties were vacant pieces of commercial land. He also had two warehouses, a couple apartment buildings, and 3 single family houses. He got in trouble in the recession. Rents went low, his spending stayed up, and commercial land and warehouses were vacant. Real Estate taxes were very high and he got hammered. We have sold a few pieces of land and invested in multi-family. He had two SFHs that were purchased in 2006 and he was paying mortgages on properties that were not worth what he paid. He had a hard time accepting this but ultimately sided with me and stopped paying the mortgage payments and gave the properties back to the bank. There was no other option. It's been a long process but divesting into multi-family properties where the risk of not reaching obligated payments and expenses is much lower than vacant land, is the path we decided to take.

I first got started in Real Estate in late 2011. A friend of mine (20 years my elder; I was 23 at the time) wanted to talk to me about doing some work for him. I was coming off a serious arm injury and did not have the desire to get surgery and recover again. My baseball career was over and I wanted to move forward. I did not know what my friend did, how he made money or even what work he was talking about! But, I did know that he was pretty well off and I was interested in learning. 

I sat down at his desk and realized that his family owned property. They were tardy on mortgage payments, had overdrawn back accounts, and let their properties' tax bills become delinquent. We were talking and I told him I do not see any ordinary income. What did he do for work? He told me he managed the properties. I said, I understand. But, those are your investments. What do you actually do from 9-5? He said I manage my properties. In that moment I realized what I wanted to do with my life.

Over the next three years we turned his RE Business around completely. It was losing six digits annually when I came aboard and is now profitable. 

2014 has been the most successful year of my life. Everything came together for me. I have worked 70 to 80 hours a week for the past three years. I have read over thirty Real Estate Investment books in the past three years. I believed in my goal and in what I was doing every day. I did not have any cash or properties until 2014 and I took every extra minute that I had to prepare myself for the time when I did have the opportunity to purchase multi-family properties. In 2014 I purchased two SFHs, a 4 unit, and a 7 unit apartment complex. This is my entire portfolio. 2014 was when everything really came together for me. I knew I was going to do this since late 2011, I just didn't know when. I had a goal, believed, and worked very, very hard to accomplish it. I purchased two vacant land properties for $20,000 and sold them one year later for $40,000, I saved 75% of my income. I leased out apartments, mowed lawns and trimmed palm trees (and got stung by many bees), did exterior and interior painting, took on property management contracts for friends, managed my older friend's 16 properties, managed my parents' 55-unit storage facility, worked most Friday and Saturday nights and got my Real Estate License and have done around 10 deals.  I do not have partners in any of the properties and the entire portfolio (2 SFHs and 11 Apartment Units) was purchased with my money or with private money and I have not had to get banks involved yet. My next goal is to purchase a large apartment complex in two years with commercial financing. 

I feel very blessed and fortunate that I was able to achieve my goals. I have had a lot of help along the way and could not have done it without the support of friends and family. It almost seems surreal. 3 years ago I had $14,000 that I saved from working at a Hyatt in college. Now, I have three properties that I purchased for either a great price or fantastic terms. The properties are appraised for a total of $750,000 and my equity is approximately $275,000 and they cash flow $30,000 a year (After mortgages and expenses). As long as you keep believing and keep working hard anything is possible. I can really contribute four things to my success so far. 

1) Hang out and Associate with people who are doing what you want to ultimately be doing RIGHT NOW. Life is not long. Do what you ultimately want to do today. Success will come as long as there is joy and motivation in what you are doing so you might as well be doing what you envision yourself doing for the rest of your life.

2) Be Flexible. I had a friend who was trying to get started and she had a check list full of requirements for her first property. She had no money yet was trying to find this perfect deal. Two SFHs detached (she did not want to be in an attached duplex), plenty of yard for her dogs, and she had to get 95% owner financing. I still do not understand this mode of thinking. I would have lived in a 200 square foot studio for a year or two if the deal makes sense. When you are starting out you need to find GREAT deals and adapt to the deals. Do not make deals adapt to your life. It is not a successful way of thinking. She is no longer in Real Estate...

3) Become educated. I consider myself an expert in my city now. Before, I did not know anything. I did not understand demographics, subdivisions, cap rates, or development. I did not grow up with parents in Real Estate. They always had 1 house and never talked about rental property. Education is the key to finding great deals in Real Estate. You have to know and understand what you are buying to be able to property assess it's current value and future (predicted) value. 

4) Don't become satisfied. Don't revel in achieved success. Focus on the future.