All Forum Posts by: Todd Hensy

I am heading down to Florida---namely Tampa, Orlando and Daytona Beach. I am scouting out duplexes and single family homes in those three areas.

Where are the cheapest properties in those areas to find great deals? I just need one town or city to make it happen.  In fact, it can be any area Florida.

Thanks.

Cool.

I thought of flipping -- but its too risky. I never thought of wholesaling. How does that work?

I want to make money on the side.

Hey fellas!

I have been in engaged in deep reflection and being honest with myself as to why I want to buy apartments and multiplexes.  I discovered that buying apartments or multiplexes is not a good fit for my personality. The reason is because I don't like to “manage things.”  Even if I got a property management company to manage it. I would have to manage them.

Managing causes me a lot of stress and anxiety. Some are very good at managing and others fail at it.

I remember being a teacher years ago and I disliked it because most of the job entailed managing students, attending meetings, grading papers, attending parent-teacher conferences, coaching basketball, managing my time, and managing my classroom.

Teaching was like running a business 24/7.  I wasn't an effective classroom manager, however I was a decent teacher. But being a full time teacher/manager was not a good fit for me. The kids loved me, but the stress was enormous. I didn't feel comfortable with it.

After I left teaching in 2011 I felt the weight of a 100lb pack taken off me. I did return to substitute teaching and loved that much better. At the end of the day---my day was done.  No grading papers, no coaching, no managing, and no calling parents. There is no managing as a substitute teacher--except for making sure the students stay on task, are behaving etc.(some light managing). I am a good fit for substitute teaching.

So after much reflection........

I would rather “do something” and walk away from it at end of the day. I want to set it and forget it.

Create something and sell it.

Example side jobs include.....driving a limo, acting a role in a movie, substitute teaching a class, performing in a sales role, and creating something and selling it.

Ironically some people are born managers. Some learn managing and enjoy it. I am neither.

About 10 years ago I was offered a sales position for a company and excelled at it and enjoyed it. After 1 year they promoted me to manager. I failed miserably. 

This is the same for real estate. In real estate you have to "manage your property" or you will fail. Even if you get a property management company--you have to know what they are doing. 

So what are some good properties to invest in that offers ZERO managing? I like making deals. I just don't care for managing them. 

I know "as to why" I invest in the stock market. 

Thanks folks.

All great posts! A lot of things to think about and rationalize.

 I may test the RE market in Columbus and see what kind of duplexes are out there. If I don't find a killer deal then I am ok with renting too because I can always funnel my extra pay into index funds.

A poster pointed out that real estate is not an arm chair investment. I agree it must take a lot of work to manage your investments ---- sometimes renting does have its advantages when I don't have to fix a roof or toilets.

in the meantime I am going to strategize and make a logical decision on what needs to be done for the long-term future. Thanks fellas!

@Chris Mason

Chris nailed it. The thought of living in state where I "know people" or have family has crossed my mind several times.  Good post.

Here is the deal. I am unstable. I live in a state a few years and move.. Sometimes up to ten years, other times 2 years. 

The nice thing is my job is flexible and i can live anywhere and transfer anywhere. The problem is I don't know where to live. Right now I am in Ohio cause its affordable and close to my home state of Illinois. I have family in Arizona and Florida. I lived in both of those states but left because of the heat and lack of jobs there.

Anyway, I am tired of renting and throwing away money. I am thinking of buying a duplex and renting out one side and living in the other side. if I get the itch to move out of state I could just rent out both sides and get a property management company to manage the duplex and still have cash flow.

Is that a great idea?

Or should I just rent the rest of my life and throw money away? Honestly, I have no idea which state I will end up these days. Never want to settle down.

So many excellent responses.

@Jay Hinrichs I did not know cap rates ran with higher risk. This is where educating myself is so critical. I guess a better way to put is this property may be high risk/high yield?

 I knew there was something that I was missing as to why not many investors were bidding on this property considering it had such an attractive cap rate. Obviously, the area is pretty bad, but besides that --- just looking at cash flow alone and high cap rate doesn't paint the complete picture. I need to conduct due diligence on my part. Thanks for the informative response.

@Ed S. That is brilliant. Yes, I have thought about getting an FHA on a duplex, but not on a multi-plex. I thought FHA's could only be used for SFH's and Duplexes and not obtained for multiplexes with more than 4 units? I will look into it.

@Jessie N - Can you recommend any great areas for rentals around Columbus? I thought of downtown near Ohio State -- but renting to college students comes with a lot of headaches. I looked at Worthington, Clintonville and Westerville. You are right Dublin and Upper Arlington are not good areas for rentals and good luck trying to find any in A rated areas. Cleveland Ave I will stay away from. I drove through the area and it was sketchy. A lot of war zones, some D rated areas. And small pockets of C areas at best. Thanks.

@David Terbeek That is brilliant. I will start asking for tax returns. All the information needed to make a wise, logical purchase has to be tackled from all angles. However, as you mentioned, assuming how long they owned it. Some are just investment flippers or fixer uppers and they don't give you an idea of tax abatements, repair costs, high turnover costs etc. Good information and will use that advice in my arsenal while scouting out properties.

@Jon Mason Glad you know the area. I drove over there recently and I agree the complex is  overpriced. The location is not ideal by any means. I did find a duplex in the Linwood area(just west of Germantown.) I see pockets of high crime around Linwood. I try to stay over by Dublin, Upper Arlington area--just tough to find duplexes and multiplexes on the west side of Cbus.

@Jay Hinrichs I am undercapitalized and need to start with duplexes. I am strictly looking for cash flow. I thought of looking for a duplex or a 4-mult-unit under 100k.  I need to start low or get a partner. So 15 caps are high risk? How come?

@Account Closed agreed.

Logically I need to start with a duplex or something much smaller and manage it myself. Then move up to bigger things. Apartments are fascinating to me.

Yes, good information. You are right -- never trust the seller. Go to a reliable source.

My question is.... if the cap rate is so attractive(15%)  and he's making a substantial profit per year why is he selling a an apartment complex if "life is just beautiful there." No one sells a cash cow.

I am willing to bet the place his complex has termites, needs some major repair work or the crime is so high its killing his profits.

Its my first deal. I just found out apartments and multiplexes are money-makers and would get a management company to manage it. I don't know anything about managing property.  Just want a second income stream.