All Forum Posts by: Dylan Barnard

Hey Bryson,

Me and my girlfriend are in the same boat. We are looking for our first deal in multifamily as well around DFW, and it seems like the MLS only wants to offer south of I20 and west of Fort Worth, out of the way properties. She is from DFW, born and raised, and I moved up here in 2011 to start college at UNT. Let us know if you want to meet up or get on a call or something soon, especially since we are in the market for the same type of property.

Some people, like Mike Burry in the Big Short, have been investing in almond farms as an indirect investment into water and real estate. Water is a commodity that is taken for granted and is a scarce resource that is inelastic, so it will be interesting to see how the water industries change as global populations grow and fresh water becomes even more scarce.

Cryptos are nothing more than a fad. However, the blockchain is the mechanism of value that underpins the cryptos. The problem with that is the fact that the blockchain is an open-source technology that is not owned by anyone. Quite the opposite - it aims to be a publicly governed ledger for financial transactions. Plus, big banks like JP Morgan Chase and Goldman Sachs already have their own blockchain experiment in development, and they aren't creating their own coin: they are trying to use the existing monetary system that we have developed over centuries - that's right, the good ole US Dollar. 

There's really no economic or logical reason to move our global means of exchange to something that is not regulated and extremely volatile. Moving to cryptos would be like going back to the gold standard. One of the reasons that we moved off of the gold standard was so that we had more control over the fluctuations of the dollar via monetary policy. One of the main goals of central banks is to control and set inflation targets. The existence of inflation is important because if money doesn't erode its value slowly over time, then participants in a society would be incentivized to hoard cash and investment would not flow properly to where it needs to go within an economy. If bitcoin was the means of exchange for societies, then people would be hoarding cash and not investing funds into the ventures or products that most need it.

I'll give you two examples on why cryptos are not here to stay: 

1. If GE or any other big market participant is looking to raise $1 billion to finance a 30 year project, that $1 billion can be worth $1.1 billion tomorrow and $.9 billion the next day, just due to a 10% daily fluctuation, which is not unheard of with bitcoin. How can GE reliably borrow money when the value of the mechanism it is using changes value so quickly?

2. Say you are a homebuyer. Would you want to borrow money for a mortgage in bitcoin when the value of bitcoin has the ability to increase in value by 100% in a year and the potential to force you to pay 100% more for your mortgage in dollar terms in just one short year from now? 

The economics of cryptos are not viable on a large scale within the global commerce ecosystem we have built and it's just another Tulipmania-esque manic episode in market history.

Denton is where my girlfriend and I are looking right now for rentals. We just recently graduated from UNT and know Denton very well, being there for 5 years as a student. Every time we looked for a place to live in Denton ourselves, there were many other tenants applying and trying to rent the same place, so it doesn't seem like you would have a problem with vacancy since there are two major universities nearby. 

Let me know if you are ever looking for a partner. We are active in the Denton and Tarrant counties looking for rentals and BRRRR opportunities in SFR and small multifamily currently.

Yes, I would like an inspection before making an offer, and I learned today that they also will not offer a 7 day option period for an inspection either. I asked for that specifically and they still denied. The wholesale company needs $5k deposit that is only refundable if they cannot deliver clean title. So I feel like I am at a severe disadvantage on this one and will be walking away and going onto the next one. 

You guys just confirmed my suspicions are valid, thanks all. 

Good afternoon. I am currently working with a wholesaler on potentially buying a duplex in Denton, Texas, a college town. The wholesaling company had someone walk through and is confident there is nothing major wrong with the property. However, when we asked when we could go see it or get an inspector in there to make sure it is in good shape, the rep we are working with said that the seller absolutely refuses to let anyone in to see the property, even for an inspection. 

This is me and my girlfriend's first rental property purchase, and we are obviously turned off by the fact that we can't see it. My questions to the BP community are:

1. Is this a common thing with wholesale deals? Are you just supposed to trust the wholesale company's word?

2. The numbers make sense. The property has the opportunity to cash flow very well, but my gut is saying walk away and move on to the next one. Is that the right move?

Any advice or commentary would be great.

Thanks for the advice. The seller is not letting us personally into the property, but will allow an inspector. So that is a bit of a red flag to me, but the numbers still make sense as long as nothing major is wrong. The deal is coming from a wholesaler, so we are being cautious. 

Good afternoon BP. My girlfriend and I came across a duplex built in 1959 to rent and we were wondering what investors typically set aside for future maintenance and capex on properties that are almost 60 years old. Are there any rules of thumb out there? I know it depends on the condition of the property and all of that, but the property appears to be in good condition and only in need of minor repairs initially. 

Running the BP calculators, we decided to put a total of 15% of rents aside (5% for vacancy, 5% for general maintenance, and 5% for capex) and it still came out to a 15% COCR with 25% down on a 5.5% 30 year mortgage after we put about $10k worth of work into one side of the property. So, my main question is whether or not we are overshooting or undershooting with our 15% budget or should we allocate more since it was build in the 1950s.

This would be our first purchase of real estate and we are cautiously excited and are just looking for a little commentary. Thanks.

Dylan

Yeah Prof. Baen runs the real estate club on campus, so we can reach out to him or someone else that is part of that club.