All Forum Posts by: Mike McKinzie

I recently received a call from a friend who is also a property manager. He was asking if I knew anyone with development experience in the titled area. I told him I would put out some feelers and see if I could find anyone. He is NOT looking for funding. He is just seeking experienced advice.

I am no expert on SEC law, but maybe just a list of Syndicators WITHOUT listing any actual investments.  Without the ability to do the things that Brian listed (I work a 40 hour week), it's tough to network and make relationships!

I made my first Syndication Investment with Joe Fairless this year, and got my first return today. It got me to wondering if there is some Website that has a list of many different syndication opportunities.  Something like a Yellow Pages of Syndication Opportunities.  So far, my only source of Apartment Syndication is Bigger Pockets.  I know several folks on here are Syndicators, but I am sure there are many more out there!

Many investors on BP like the "distressed" properties.  If you can do a lot of the work yourself or have your own team, that is a good way to invest.  Other's like the "Turnkey" approach, letting someone else buy, rehab, rent and then sell.  And then you get to folks like me.  My last purchase, in June this year, was a Brand New Build in Tulsa, OK!  Paid $230,000, cash, and getting $1,795 a month rent.  And while the Cap Rate Return is nothing to brag about, there are three good reasons to go this route.  The first is obvious, there will be NO REPAIR COSTS the first year, the builder takes care of that.  The second is that I already have 2 properties in the marketplace so the PM charges me a 7% monthly management fee.  And the third is that there will be no Capital Expenses for many years, probably after I sell it.  Other benefits include the quality of tenant and the good possibility of appreciation.  Also, most buyers in a new tract are owner occupied so the neighborhood quality tends to stay high!  ALL Real Estate investors should be friends with builders in the area they are investing.  No one knows the market as well as builders.  Even if you never buy from them, they are a wealth of knowledge.  And if they are raising the price of the same model as each phase releases, that proves strong interest in the community.  Most good markets are so overpriced these days that wholesalers are getting RETAIL PRICES.  Those prices will soften at some point.  It is going to take some real work to get anywhere near 8-10% Cap Rates.  And those drop rapidly when a serious Cap Ex occurs, a vacancy or even worse, a non paying tenant that requires a costly eviction!  Therefore, it is my belief that a 3-5% Cap Rate with a Strong possibility for appreciation and a hassle free tenant is not a bad investment.

Sam, I do not understand your answer. This site is for investing in real estate. If that property is vacant, then the owner has NO CASH FLOW. I do not understand your point?

Let me give two scenarios:  I purchased a duplex for $320,000 in 2007.  I just sold it this month, June 2019, for $320,000.  My gross rents are $1,800 /month and net $1,000 a month.  Would you KEEP it or SELL it?

Next, I just sold a house for $642,000 and I was getting $1,800/month rent for it.  Would you KEEP it or SELL it?  If you want to know the appreciation potential, records show I could have gotten $650,000 for it in 2018, therefore it appears the market has flattened out.

Would you TRADE a 2-3% Cap Rate for a 5-6% Cap rate when you are looking mainly for Retirement Cash Flow?

I am writing offers in Colorado Springs and aM looking for a GREAT Property Manager. 

I just checked my profile and see that I joined BiggerPockets in May, 2009. It's hard to believe that it is ten years now. BP has been such a blessing, I want to say THANK YOU to Josh and Brandon and the rest of the staff. Due to contacts here, I have bought rental property in TN and MO. I found a great Property Manager in Fresno (after going through 5 BAD ones). I invested in my first Multi Family Syndication! I found a Realtor in the Denver, CO area and have closed one rental, am under contract for a new Personal Residence and searching for another rental. I learned a lot about different types of investing. And hopefully, I have helped a person or two with their REI journey. It's also been fun to debate, converse and cajole with other investor's on BP. Whether it is the subject of "$30,000" houses or "Cap Rates" or even "Owning Class D properties where you have to carry to collect rents!" And let's not forget the "50% Rule" where I analyzed a survey of 1.1 MILLION apartments and came to a 49.98% expense. I just ran my properties for the last six years and came to a 51.3% expense (caveat is 6 new roofs last year). It has been, and will continue to be, a great learning and sharing platform here on BiggerPockets. In Today's market, things are a little tougher, we made an ALL CASH, full price offer for a house in Colorado Springs and got beat by a 10% OVER asking price, all cash offer. But it's the information on BP that helps us understand why and how to get around such obstacles. So THANK YOU again, Josh and Brandon!

Thank you Mike, CJ and Jason, and the rest of you.  I like to think that when your return on equity drops below a 10 Year Treasury Bill, it might be a good idea to redeploy.  Capital Gains, depreciation recapture and cost of selling are just normal costs of doing business.  Why deal with all the headaches of owning rental property if your cap rate is below 2%?

Another point is, after over 40 years of handling tenant complaints, vacancies, large repairs, (last year my repairs totalled $111,618)  Maybe it's just time to scale down and lessen the headaches (I have 5 vacancies right now).  But the truth is, none of you, if you had $300,000 in cash would buy a rental that nets less than a grand a month unless there was some extenuating circumstance, like buying equity.