All Forum Posts by: Blake C.

just an idea Micahel. Have you been to a local area RE investor meet up? It could be a good place to get to know someone. Also, if you started to try to drive for dollars or send yellow letters, you might be able to find a good property at a discount. You might not be able to swing paying for it solo, but you could bring this deal to a potential wholesale partner. Just a thought.

Eric Blanchard offer you great advice. It took me a year of looking before I found the right deal the first time. Them 9 months before the second. It goes faster as you can knowledge and experience. It's better to be a few months or even a year late to the game than to make a debilitating mistake. With that said you can't let fear keep you out of the game. My best solution for you as you hunt is to focus some time on continuing I learn and network. As you knowledge grows you will become a more attractive partner. As you network grows, you will find better deals... Even deals with some owner financing... That sounds like something that would be right up your alley. Know that it's okay to give up a little of the price you want to get the terms you need to make the deal happen. That's the price of using OPM. Stay determined!

I do exactly what James said. I also try to highlight the feature of the remodel and keep a sign out front. In Amarillo, the sign gets 70% of the leads.

I think you have positioned a good question. I haven't heard of a perfect answer. It's very situational. First, I think you have to always know your properties. If you know you have recently renovated big ticket items, you should be able to operate with less margin. Also some people go the home Warrenty route and use that as a guard against large expenses. I don't do that, but it also limits needs for large margin. I just have a couple homes and keep about 10% of the homes value in reserve. That's my rule. I have a friend with more properties and he keeps a lower over all percentage (closer to 5%) because he feels like he has spread his risk out. Unlikely that 20 of 20 AC units go out in a 2 month span. But it wouldn't be crazy of two of two went out. You need to be able to ride out a short term situation when everything goes wrong without causing too much pain. Therefore a factor for me is what kind of access to other cash do I have that's not liquid in case of a long string of bad luck. Can I cash out refi? Do I have access to a line of credit, access to short term loan, or I hate to say it but access to a credit card? Also you need to think about how much margin you have in your own life. Is there a way for you to cut back short term there so make life work. With all that said I don't live hard and fast by the 10% rule. You have to know and manage your risk. I would be willing to be below my 10% mark in order to make a deal happen, but it needs to be a calculated decision that acknowledges the risk present. I would especially be willing to do this knowing I could gain liquidity in other areas. This isn't my preference but if the worst thing happened, Or series of "worst things" happen, I know I can ride it out. That's a long and gray answer but I hope it helps.

@Omar Naguib I just wanted to make sure you have already found the Ultimate Beginners Guide: http://www.biggerpockets.com/real-estate-investing

Also, I sent you a Colleguge request and inside of it is a link to a Google Doc with 99 tips for investing in the Amarillo area. I didn't write it. Some people way wiser than me did. Good Luck!

When i first started, I looked lightly for a group. I wasn't able to find anything here. It looks like you may have found two. I was able to google the second one you listed, but not the first. I cant really tell you much about them, but I know from listening to people on the BP podcast that the local meet ups have been very beneficial. Since you have limited connections starting out, I would encourage it. For me, Ive made a few connections, but now that I am aware of it, Ill considering going as well. Did you find more info about it than whats here: http://www.megaeveningevent.com/real-estate-clubs/tx.php

RE is a team sport... no matter what method of investing you seek to use. Because of that, you will find that nearly all investors end up very helpful. People have helped us and we know we need to pay it forward. Additionally, you never know when working together with someone will help you both get to where you want to go. For instance, there is another buy and hold investor at my church. He has let me borrow tools and given me simple advice on how to cheaply make repairs. In return when I have a prospective tenant that has needs outside of what my current opening(s) are, I refer them to him.

That all makes sense. I would really recommend the Millionaire Real Estate Investor by Gary Keller. Its a great example of how buy and hold works. Its what I do. It might not be for you, but it would provide you a clear look at the fundamentals of buy and hold investing. If you read it and have questions, Id be willing to get together with you locally and talk it through.

Another local contact is amarillowelcomehomes.com. The owner is a friend of mine, Shawn Moore. He is a local wholesaler. Ive bought one of my buy and holds through him. If you end up looking for deals or wanting to really talk wholesales he would be the guy. He's pretty busy, but has been willing to share some great nuggets of wisdom with me along the road.

Jon has given great advice about rentals being a cash on cash game. To expand my cash flow on limited captial, I have focused hard on the cash on cash number. As Jon said, I have fund that you can do better at this by managing yourself and doing so in the lower working class neighborhoods. This means I don't invest in the neighborhood that i want to live in or to people that I typically run in a social circle, but its still not a scary place to be at night. The hassle factor is a little higher, its not as easy to sell these properties to an owner-buyer on exit, but the cash flow as a function of purchase price is much greater. As a result, I can get greater than 15% cash on cash return.

The increased return has its draw backs (property management, increased hassle, and lower liquidity, ect).

Another thing you can do to increase cash on cash is to finance with a mortgage. This route you can lock in a lower interest rate for a fixed period of time. There are some downsides to going mortgage as well... higher closing fees, and no LLCs.

Welcome to Bigger Pockets and Real Estate. I am an investor in the Amarillo area. There are a few others from Amarillo on here as well I believe. I'm not super experienced but I would be happy to meet you and hear more about what you are looking to do. Many people have helped me along my journey.

The Bigger Pockets site will be very helpful to you expanding your education and making great connections. Have you come to conclusion on how you want to go about starting and what style of investing you want to do?

James Wise exactly. My first deal was more of a home run. This cash flows about $250-300 with 25% down. My second deal was more of a home run ($350 cash flow on a 48k investment). After looking for 10 months for another home run, I decided that solid doubles are good enough for me. Ive heard other talk about you next deal always being better than the pervious. I'm not sure that's always realistic. I think staying in the game, making profitable deals, and getting better at managing the deals you have is more of my philosophy. Money can be made on the church, but profit can grow with great management.