All Forum Posts by: Gareth Fisher

I'm not saying that it isn't possible to do well in real estate.  I still believe it is the safest surest place to stash money.   My point is that almost every public figure is blowing a whole lot of smoke.   Very few people talk about the risk, or the thousands of investors that have gone belly up and walked away.  There are more pitfalls, and traps in real estate then I have seen in any other business then I have been involved.  I see big banks hiding mold and lead issues, I see project managers expecting top dollar finishes at low end prices.  I know of realtors who blow more smoke then Cheech and Chong on 420.

I'm not saying it's impossible.  I'm just saying no one talks about all the pitfalls, all the crap that goes on, the lawsuits, the unpaid invoices.   

I haven't gotten burnt too bad.  I have been able to do "ok"  I have gotten extremely lucky imo.  It has helped I have years of experience doing the work.  Most don't have that.  

My problem is that no one is telling these new guys all of the problems and hardships that come with real estate investing.  That its an old boys game, where the new guys are often taking the losses.   Even cardone has said that.  It's the little guys that are going to get smashed when the market turns.   Well I'm sticking up for the little guy.  My parents raised me if it's too good to be true it probably is....

The bottom line is this more investors will lose money then the ones that will make.  There are multiple reasons for that. I personally just think this topic doesn't get talked about enough.

I don't know your particular market but idaho isn't what I think of when I think of a hot market.  If you look over the last 5 years of appreciation rates and compare them to an area like nashville  you will see your area more then likely has appreciated at a much slower rate.   You can further compound that by buying in a c class neighborhood down that street that hasn't had the demand that the b and a class neighborhoods have seen.   I would put a word caution on being careful on what you buy.   A lot of slum lords will recommend a piece of crap.   Thats because they leave them piece of craps and rent them out to other piece of craps.

I look for the outdated but well maintained homes typically you can get them below market rate, but not get a total pos that will nickel and dime you every month.

I remember a tackle shop I used to frequent.  It could be snowing out with blizzard conditions and you could walk in there and ask how the fishing was.   They would always reply the " the bite is the best its been all year!!"

I have been involved with flipping properties since early 2000s.   First subbing out as a carpenter for several local investors and builders.   When the market dropped out in 2008.  Everyone I knew including myself went under.   Several years back now that the market turned around I hopped back in the game!!  Full of eagerness and drive, I thought I was going to light the world on fire.   Instead I made a little, not enough to justify my moves.     In fact looking back, I think I would be much further ahead now if I would have stuck to contracting work.   I didn't lose money, but I haven't made what I would call "money"

Here is what I learned, and here is what very few investors will tell you.  The reason why is simple, most investors out there on podcasts, selling books, or on the web.  R there for exposure.   They need the exposure to bring in capital, syndicate money, expand there "circle"    

I have met a few "stand up" friends, but they also haven't made me money either.  

First off all the shows on hgtv are branding and marketing tools for the individuals on the shows.  This applies to podcasts, you tube, and almost any other forms of interactions.

Wholesalers numbers are the worst and extremely inaccurate

Most rei groups are nothing but a way to attract to stupid money

Most investors are cheap, cut corners on the contracting side in the sake of the almighty buck.   I recently seen photos of one of the largest flippers in the area who flips roughly 200 homes in my local markets.   Frame over carpet on a concrete floor with your standard non treated 2x4s.     This a basic no brainer clear violations of building codes.

90 percent of your contractors are crooks who will stab you in the back the first chance you can get.

Bankers will lend you money on properties that are complete junk, as long as the comps ck out and the appraiser comes through.    At the end of the day your portfolio is only worth what the properties will sell for.

For every investor  that makes money there are 8 or 9 that lose money and thats in a strong market.

Most diyers are complete hacks, constantly cut corners like having lead based wooden windows in there rentals exposing young children to toxins and damaging there front cortex.  

Neighborhoods full of rentals, typically go to crap, because tenants don't care and landlords don't want to dump money into properties where the tenants won't take care of them.

Big business and syndicates have taken over the most profitable areas of real estate. I remember a time where there were local builders in every town, and a man could make an honest living building homes.  Now there are tract builders, nationwide corporations that a common man just can't compete with.

I'm not sure how I'm going to move forward. I have made enough to keep me interested, learned a ton, but feel that most of the value in real estate is in the ability to money in a safe  tangible asset.   Being that were in a 13 year high, that doesn't even seem like a wise strategy at the moment.   For all you new guys, be very careful moving forward.    Real estate investing is a very difficult business.  Sorry for the rant, but I feel that all the sugar coating and *** kissing that goes on in these circles someone needs to share the other side of the story.

ugh.. man that is brutal wrong strategy for the wrong market perhaps.     I don't think you will be cash flowing much of anything when it comes to your home maintenance expenses, time and energy etc etc.  How quickly is your market appreciating.?  I would recommend maybe trying an appreciation play.   Wait 2 years and sell.  Hope that your market appreciates enough where you can make a profit.     

Around hear your money would go a long way.   I can find turn keys for around 80k in c class neighborhoods.   That will rent for 1000.     Cash flowing a few 100.   Or a 4 unit you can get for around 250k and cash flow 5-800  a month.     We have a conservative market that rarely appreciates more then 3%.   Cheap taxes, and good conservative values that provides us with good working class neighborhoods.   

i was just thanking you for your help

sweet website bro!! thanks for the tips!! much appreciated!!

I have been buying and rehabbing properties for a few years now. My first was a BRRR. It went well. My second was a flip it did ok but didn't like the added stress of having to deal with agents, the buyers, inspections, banks etc etc. I have 2 more projects in the works. My plan was to flip the one because the neighbors are a mess and I don't want to hold the property. The other I am rehabbing and will be doing a cash out refi then renting out. I also am a general contractor, so I have been doing all the work myself and paying myself.

Generally it is taking 20 -25 k to get these properties up to par once my labor is factored in.   Therefore I am generally having to take out the full 80%ltv.   Which leads me to this question.

 If I am having to borrow money to buy the places, then borrowing to pay myself back for the labor in the rehabs.  It seems that my whole income is now reliant on me leveraging myself or borrowing money.   I was raised conservative and something doesn't seem right.   However when I run the numbers everything seems to work.      So I dont know why this is causing so much anxiety.  Anyone have any thoughts?  It also strikes me as odd that I don't have to report any of it as income... also seems really weird, I guess because I now owe this money?

I guess in another words even thought my bank account continues to grow and my cash flows will continue to increase,  it seems this will be offset by greater debt and liability.    

yes the northeast in general is under performing in comparisons to other regions. however you lose local knowledge,  but I would at least start looking at data.

if you find a home zone commercial generally the township will allow you to convert it.  There are some ethical issues with this imo.   I am always trying to strive to improve the community I am investing in.   Taking a neighborhood that is traditionally sfh and converting a house to a multi.  Typically doesn't improve the community. Hence the reason for zoning regulations