All Forum Posts by: Account Closed

@Robin Casper LOL service providers in this industry are so garbage sometimes. 

@Pancham G. man, congrats. How long did you acquire smaller properties for before making adjustments to scale the model? What would you say is the key to scaling the syndication model quickly and with maximum profit, if you could pack it into a single sentence?

I tried a few BRRR deals when I started. I realized they wouldn't scale, so I started treating REI as a business. Things changed dramatically + quickly when this mindset shift occurred. Suddenly, firing oneself from their job becomes way more realistic.

What really pushed you over the edge, and allowed you to leave?

@Paul Wolfson you should always time the market. That doesn't mean stop investing and wait for things to crash. Timing the market means adjusting your investment strategies to maximize your returns and capitalize on opportunities best for the conditions of the current market phase. Every investor I've ever met who has made serious money has taken this into consideration.

These adjustments to strategy might push you to do something very different than you are currently doing or have done before. That's not a bad part of the business to have to embrace from time to time.

@Kevin Chan timing is certainly important, and being able to ride the growth wave is a huge cherry on top (if not a whole extra scoop of ice cream). I do, however, think its important that new investors now realize that they're buying in a peak market, and adjust their strategy AND expectations accordingly. There may not be much growth to be had until after a significant depreciation event. For this reason, I say focus less on "growth markets" and more on markets that are less likely to lose value in a recession + offer the MAXIMAL  yield so that while your property loses value over a correction, you're still happily collecting a significant amount of rents.

@Kevin Chan oversupply in cheap markets can be a real problem. The challenge you face investing out of state is really MAXIMIZING your yield, while investing in nonvolatile assets that are less likely to have severely diminished value and performance, all while investing in an asset with adequate rental demand.

I can't speak to all of the markets you've mentioned, but have dug deep into several and can tell you tenured property management companies in some of the areas advised me to stay away from multifamily in working class neighborhoods completely bc there aren't enough tenants to even fill the single family supply nearby. They've also told me to fill SFR units with the most qualified tenants you've to keep a unit remodeled to a very high standard, much higher than in the markets I already invest in. Turnover can be a pretty big issue when rental demand is low, combined with investing in working class areas.

My recommendation- go to high demand major cities that are a bit too expensive, and try to find secondary markets 30-45 minutes outside of them that piggyback on the same rental economics but with lower property values. Check on vacancy rates in those markets, but remember that broad scale statistics are often misleading. Rent increases over the last decade are a better indicator. Dig deeper and talk to management companies, and see how long tenants tend to stick around in the specific segments of the market that you think would work best.

Remember- if you research and base your decisions off of what every other investor on this forum does, you're going to end up banging your head against the wall trying to monetize concepts that have been wrung dry by the masses. Go deeper. Indianapolis and Kansas City have been mined hard by every other California investor for 5 years. The easy money there has become much less accessible.

@Jay Hinrichs risk isn't the ONLY determinant in market pricing. Although I agree it is one of them. 

There's a bit of hidden gold in finding markets that are priced low for reasons other than risk. The richest investors are in fact some of the best speculators out there ;)

@Kimberly Kesterke you know I don't think all landlords serve a noble cause, but there are plenty who aim to do so. Low income housing is an area of great necessity, and increasingly so. It is in fact hard though, and I think the idea that we can all just screen tenants well and rough neighborhoods will become good neighborhoods is a bit oversimplified.

I play in the C- to B+ range of assets. The C- range is different. It is higher yield for a reason. I'm more selective when identifying a C market to invest in, especially with respect to rental demand and landlord tenant law. I'm also pickier when performing due diligence with respect to condition and more averse to under market rents and vacant units. If you're prudent, these lower income assets can be higher yield and relatively stable, but the first year or so of stabilization is usually subject to more incidental risk. Honestly, I think they're good assets for someone who is willing to trade a bit of headache for the potential to earn higher ROI. I preferred these at some point, and my preference has shifted to B class as my income and value in my primary business has grown substantially- and I have observed the same set of preferences for others.

As for being labeled a slumlord. We just have to shut it off. Maybe even speak of our ventures less, which is an unfortunate truth. You get rich off low income rental property, you're called a slumlord. You get rich off A class rental property, you're called greedy, or lucky. You get rich off a business and earn your success, and you're called a rich (insert expletive of choice) who thinks they're better than everyone else. Saying too much about your financial endeavors is not so different from saying too much about your love life, or political/religious positions. Obscurity is your friend. Go get yourself 1000 sec8 units. 

@Jason Turgeon CONGRATS my friend. One step closer to being a full time artist. Happy New Year!

@Jason Turgeon i appreciate the plug sir.

As far as property managers go, I completely agree with your comment. They can be difficult to find. Sometimes a management company starts out great and their business changes over time so that they end up being sub par. There are so many variables that come into play and we've learned over time and incidents that due diligence on the front end plays a key role, but isn't enough. Having a reserve list of managers is necessary as well. Beyond this, expectations and persistence cure everything. 

Jason, did you get some good replacement properties in place?? I hope everything turned out well with your exchange

@Anthony Katsonis Hey!

 I prefer to work with institutional lenders since they are usually the cheapest and I've (finally) got over the new investor financing hurdles after 2 years of healthy biz tax returns, but these big banks can be conservative. 

Now I have seen my banking contact get an equities secured line of credit going for a client of mine with a sizable stock portfolio. What kind of collateral are you talking here? 

I'm glad to chat any time