All Forum Posts by: Stephen Masek

Originally posted by Blair H.:

I recently met with a local here in Atlanta, originally from China, who has been buying houses cash with a bankroll of $1.5MM cash from friends and family back in China.

Because he has the money, and/or because he doesn't know any better, he's been buying houses off the MLS whenever his realtor calls him. He feels he's getting a good deal. Minimum 10% ROI.

Nice! We've got two houses in Atlanta, and would liek more. The only negative in Atlanta is that property management is way more expensive than most other palces. Most all of them want a full months rent to lease to a new tenant! We were able to find one guy who wants half of a month's rent to lease to a new tenant, but his company does not cover the entire region.

Hint: Get a real job (or two), rather than chasing a golden goose of buying way below market and "wholesaling," all the while ignoring the very real risk of prosecution and/or lawsuit for making bogus offers to the current owner which you could not close (unless you actually have the ability to cloase the sale yourself).

We made money on appreciation before the crash, as we sold most of our properties, and now are making money on cash flow from ones bought in 2011 and 2012. We're looking for more. You can buy nice newer houses in nice subdivisons with good schools for 50% of construction cost. When the economy recovers, they should at least go back to construcion cost. However, that is a big if, given all of the bad government we have, so cash flow is important. Even if the economy tanks, real estate owned outright will still produce some cash flow, and has inherent value.

Sorry, we could not come, as I need to be in the Encino part of Los Angeles tomorrow morning. I was part way there, in Victorville, all day today. Please let us know the details of the discussion.

Ah, the old attempt to join two wrongs, and and somehow come out with a right.

And, to answer the question, yes I read the thread from the start, and did not, and would not, just jump in.

As for earning a good return, many of us are doing that in legal and moral ways, buying properties, fixing them, and renting them. We are indeed helping the economy. We are making good money without doing anything crooked or corrupt.

We will try to come, and would enjoy being there.

Either good newer houses in nice neighborhoods in most parts of the USA go back to at least construction cost, which is double current value, or the entire economy flopped. There are some over-priced areas, such as Phoenix, but they will still go up. You just can't make as a good areturn renting them. Of course, some old mansion in a bad neighborhood might only be worth $40,000 now and will never come back up to rebuilding cost, say $300,000.

Thanks, I didn't know about that link. 1990 is a better cut-off year, but some things made with asbestos are still legal and being sold and used, especially plastic roof cement, and stucco in some areas. There are a number of bans at different years, but all allowed existings tocks to be used-up. Some bans were initially ignored, especially the ban on drywall joint compound by the CPSC. Other attempted bans were overturned when Canadian asbestos producers sued and won. I should start another thread on asbestos, but would hope to make it "sticky," to help people here see it and stay out of trouble with asbestos. Anyone know how to do that?

By the way, as J pointed-out, that $70,000 is downright silly.

I own an environmental consulting, and we often help people with mold. It is a real danger to people with compromised immune systems. It is a real danger to people with money, when those exposed find a "Mold Is Gold" lawyer.

Since the house was built in 1978, the bigger problem is asbestos - the drywall joint compound, sheet vinyl flooring, acoustic ceiling exture, and other things are likely to be made with it, so it is really an asbestos job, and that is highly regulated. You need to find a good consultant to test it.

Do it wrong, that the guy who quoted a cheap price may hit you with a huge change order, or sue over exposure!

Look at most places in the USA, except Phoenix, and it is not difficult to find newer single family houses in good neighborhoods which will return 9% - 10% when purchased with cash (after property management, property tax, HOA, and insurance). Why fool with apartments? The single family properties can be bought for 50% of construction cost, so have real potential (again only newer in good neighborhoods) to double in value. They are also much easier to sell.

Las Vagas is very difficult now, due to the carzy law which essentially stopped foreclosures.

Remember that lead-based paint and asebstos are highly regulated, and people are being caught. For example, a guy with a 7-plex was fined over $18,000 per unit just for paperwork violations on lead paint, and a guy went to federal prison for four years for illegal ceiling texture scraping. I own an environmetnal consulting company, so know what I'm writing about. Have a good environmental consultant check the buildings before you buy. The peak usage for asbestos was the late 1970s, and the peak for lead-based paint was prior to the 1950s.