All Forum Posts by: Axel Meierhoefer

@Lee Ripma I totally agree. That's one reason I like turnkey. Sure, it is debatable if turnkey costs too much on the front end to purchase. On the other hand, in my approach, there is a strong correlation between purchase, renovation, sale, and property management. That correlation leads to very good quality work. There is only one other approach that has worked for me and that is having someone who I trust and who does the purchase and oversee the renovation but for another reason than selling. He does the front end of the turnkey process to generate long term relationships with investors to be their lender. It's an interesting thought because he would get the properties he originally purchased and improved back in case the investor does not pay the bills/mortgage/loans.

Hope to talk soon and would love to get the link to the podcast Alex was referring to

@Alex Mina You are welcome. I am always happy to talk. For the IWG program, I offer a complimentary strategy session to discuss the GROWER part of your situation. Just tell me when

@Dan H. Hi Dan

I found my mistake. The 2% is for the max increase in property taxes annually and the rate with local bonds, etc. is closer to 1 %.

I don't want to discourage Alex and if he wants to do BRRR and can pull it off locally it would be great.

Many of the folks that join my program are mainly interested in positive cash flow with a reasonable spread of the risk. That results in a performance of about 0.8 - 0.9% of the purchase price in rent and good cash flow with a 5/5/5 approach for vacancy, maintenance, and capex, plus 8-10% property management fee.

As I had mentioned, the mentoring program is called Ideal Wealth Grower and the GROWER part stands for

Goal

Current Reality

Opportunities and obstacles

Will to take action

Experiences from actions taken

Results generated from actions taken

Alex will have to think about what he wants to accomplish and what the long term goals are. If it is to generate profits from buying low, applying BRRR and selling high, that's a very valid approach.

In my program, people want to develop a passive income portfolio to ultimately become economically independent and possibly retire early.

@Alex Mina @Dan H. Alex, I will be very happy when you can report back to this thread on BP that you found a property as Dan describes. if you can find that, you will be a very lucky man. By the way, my house cost $550K when I bought it 3 years ago and my property tax is $11000. The rate in CA is 2%.

The main issue I have with the properties in our San Diego area is the performance. Assuming you would find someone who would pay you the rent on the less broken down half of the duplex to cover your carrying cost so you can save your own rent and use it to renovate, everybody in the area would do it. The reality is that you can typically get about 50-60% of the rent you would need, and the more broken the property the more likely you will end up with the worst possible tenants.

I like the idea of getting started locally. I only caution that you could lose your shirt because you have to make an assumption on top of assumption on top of assumption on top of assumption to make things work. If you find that pink unicorn I applaud you.

In case it does not emerge and you rather look for passive income and becoming an investor I am happy to help. I don't recommend learning how to renovate horrible properties while living in it and hoping the tenant never misses a rent payment in the middle of the worst economic and unemployment crisis.

That's the beauty of real estate and becoming an Ideal Wealth Grower. You decide what your BHAG (Big Hairy Audacious Goal) is and then you go after it. dan and I are here to help you and there are more very knowledgable people on BP who can also provide amazing information.

I created my OOS portfolio of single-family residences that pay $7500/month of passive income while living in San Diego and am always happy to share what I learned and how I did it. 

@Alex Mina Welcome to real estate investing. I live in Escondido and know the San Diego market pretty well. The approach Dan described is a possibility but you face two critical things: 1. you need to find a lender in the current environment that wants to fund your deal and that will only work if you have the ability to carry the property. As you may realize, in San Diego county you are looking at about $12000/year for property taxes alone. For the property with such low investment, you are also looking at about $400/month for mortgage insurance. In addition, you will need to get homeowners insurance, which will run you almost $100/month. So, notice I am not mentioning what your mortgage itself would be. You already have about $1500/month in costs + utilities and probably about $2500/month for interest and principle. All in you are going to have to pay approximately $4000/month to hold the property. 

If you now want to renovate it using BRRR, you will probably need at least 6 months depending on the ability to put money aside and buy the materials and in some cases get the experts to renovate the place you bought.

People here on BP tell you that BRRRR OOS is not a good idea, especially when you just started. I agree.

I created a system called "The IDEAL Wealth Grower" where I help you to make successful OOS investments. Yes, they are not BRRR but I believe they are a good compromise. I ask my clients: Do you really want to work on properties or do you want to invest to reach economic and ultimately financial independence?

If you are totally into BRRR, follow Dan's suggestions and also follow Dan. He is a great advisor and he has a ton of experience.

If what you really want is becoming a real estate investor and generate passive income, we should talk. In the current low-interest-rate environment your $35K can make you $200-$300/month. It will build you equity over time and it keeps you on a path where you can get more properties as you accumulate new down-payments. There are some ways to accelerate that path we could discuss.

On Bigger Pockets there are different "camps" of believers that you will discover. Some say you should only invest locally. Some say apartments are the only good investment. Some say working with the best TK operators is the way to go. Some say you should do nothing on your own and just give them your money - you may have heard about Grant Cardone.

I teach people how to become a real estate investor by selecting well-performing properties. The location is purely a matter of math. If you can find a well-performing property in San Diego that you can afford, you can invest here (you won't). If that well-performing property is far away from San Diego you need to have a long list of criteria to qualify all the service providers you will work with to have your property OOS.

Let me know if you like to speak about it. I am happy to have a call. PM me when you are ready

@Nathan Gesner I agree and one source I use is called GetAbstract. It does exactly what you are describing and only if I really like something well enough do I get the actual book and read cover to cover and often also get the audiobook as hearing it anchors it more in my brain than just reading.

Here is an example: https://www.getabstract.com/en/summary/tribes/11200
I think you can get a 30-day free trial to check it out

@Nathan Gesner Thank you. I know the books remain valid. Asking for a list like this just helps prioritize a little as there are so many and new ones coming out all the time. I really loved "The Wealthy Gardener" although it isn't as much a 'how-to' book.

@Erin Dorsey Robinson

The speed is dependent on circumstance.

So just for speed you would have to find and winnable auction for a foreclosure property at a very very favorable price and in a location that very shortly after your purchase becomes very desirable. This could happen because a major employer makes a favorable decision.

Imagine you hit a really great deal of a foreclosure in Missouri and a few weeks later it is announced that Tesla will build the cyber truck factory there.

You 4 plex you bought and now renovate could be ready for above market rate rents due to the perfect location by the factory.

As prices in the area explode you could potentially get a lot of money. Not sure if it would be a million but you get the idea. That way it might only take 18-24 months.

Those cases are rare. That’s why I help my mentoring clients in the Ideal Wealth Grower System to reach economic independence in about 10-15 years. By then they sure own more than 1 million in real estate and get enough passive income never to have to work again if they don’t want to.

Very cool. Thank you @Allan Smith.

I wonder how that is generated. I will use the link and ask BP support if they keep it or used to keep it updated or if they may be put it in another place.

If I find out I will post it here

I have been listening to the BP podcast for years and I am always interested in what the guest suggests as the best books to read. I am reading a lot myself and have been wondering if there is a list somewhere on BP where all the books that have been recommended are listed.

If such a list does not exist I wonder how hard it would be for a software wizard to create a tool the looks at the podcast show notes, grabs the book titles, authors and who recommended them and then publish it as an ongoing resource. I think it would not only show what the most recommended books are and how that changes over time. It would also indicate how the emphasis might change from flipping towards BRRR towards other topics people are interested in. I am sure there will be a new wave of titles coping with a new reality after the shutdown.