All Forum Posts by: Jason Cory

You save money by financing subject to repairs. A local property management company can oversee things & the loan company won't release funds to the contractor until the appraiser turns in draw inspections as work progresses. 

Never invest for the 1% rule. Making $100-$200 a month is pointless investing/financing $100k. If one thing goes wrong where is the money coming from to renovate and/or cover expenses/loan payments. 

If you're going to invest to rent buy to actually make money. This TK investing being sold on BP is about to leave a lot of people with serious financial issues.

Real Estate is full time job not a hobby. Invest like it is.

It's frustrating to watch as a former appraiser. Your intentions are good but I've appraised too many foreclosures because people were sold sunshine & rainbows instead of the truth. 

 I had my tangle with him/them in 2010. He's well known in Birmingham. I'm amazed he's avoided the attorney general and/or jail. 

Malcolm has a younger brother & father in the business with LLC's also.

It's a multi-faceted/family business model. 

 The elderly guy was one of people in the group that funded the deal. The group had taken the properties back but if it's the same deal I'm the one that told him the taxes had been purchased. One of the apartments was green painted brick from my recollection. They were next door to each other basically on the street to left of the projects with a project building next door to them. He was going to redeem the taxes & call me back. He got the houses redeemed except Eastlake & Pratt. He couldn't redeem the apartments because one had a squatter he said. What he could sell I didn't want because they were all the bad properties. He wouldn't sell what was rented. 

This sounds like the same group. 

 A small house without a driveway on a busy road. 

 If you rent in these areas always get Section 8 tenants. The housing authority does background checks, criminal checks, & credit checks. If they are on the program they passed all of the checks.

Rents are guaranteed for a year with the housing authority. They renew on an annual not monthly basis. 

If a tenant decides to move they can't have a new voucher if they have an outstanding balance with a utility company or the landlord. The housing authority checks this & if they have a balance they have to stay until it's paid off in full.

Rent is direct deposit every month so no chasing rent. 

If the tenant gets out of line in any way notify the case worker. They straighten up quick for fear of losing their assistance. 

Always rent to a housing authority tenants. Never rent to straight pay tenants. 

3 bedroom houses rent for a minimum of $750 in Birmingham. It's easy to get 3 houses for a $100k investment in Birmingham. That's  $2,250 gross rent compared to buying one house that rents for $1,000 for $100k because it's in the suburbs.

Treat them with respect & they stay forever. Treat them like trash & they'll leave. 

I've had house in the past that had 70's carpet without a stain anywhere. The tenant was fine & didn't want it changed. Her rent was only $450 but she had been there 20 years & it was spotless inside & out. I left her rent at $450 to keep her at the house. 

Horror stories about these areas come from slumlords that don't fix anything & think they are better than the people paying their bills. 

Original owner elderly from Minnesota? Sounds eerily familiar to a call I got last year wanting me to buy a package of the 2 apartments, 2 houses in Centerpoint, one or 2 in Pleasant Grove, & one in North Eastlake, & one on Pratt Highway.

 The easiest way to think about it is, do you want renters living next door to you? 

Owners have a vested financial interest in protecting their value. Investors have a vested financial interest in keeping rent & returns high. 

Invest for the purpose/goal. 

 It takes one house to turn a hood into a neighborhood. Even low income areas have to keep up with Mr. Jones next door. Gentrification doesn't happen in pretty areas. Degentrification happens in pretty areas when all the investors start putting tenants in owner occupied areas. 

I'd be interested in a BP case study for the investors that bought in owner occupied areas using the correct value approach as occupied. That's the income approach not sales comparison. Current usage controls sales price. Owner occupants don't buy houses with tenants. Investors buy houses with tenants based on the income. If investors got the correct value approach appraisals based on current usage it would likely make many backsides pucker. 

If you're buying to rent you buy where value is controlled by rent, i.e., lower income areas. 

If not, you come out of pocket to renovate once you kick the tenant out to realize the value, sales comparison, you bought it at. The appraiser saw it vacant & pretty in an area where the highest & best use was owner occupied. TK providers switch the usage to an investor & they start underwater because they bought the wrong way, the wrong approach to value. It's not the appraiser's fault because they stated the highest & best use. Investors change the use therefore, change the value. 

I have a company that finances properties I sell so investors can buy based on the correct usage & value approach. Benefits of being a former appraiser. 

I also want to see people make money because I was there when investor's bought in the suburbs in the last downturn when the lender was foreclosing. 

 Lower the purchase price/investment, higher the return. 

You'll make money because you're buying for highest & best use of the property. Everyone that keeps buying in the suburbs will lose their backside in the next downturn netting $100-$200/mo on a $100,000 + investment. 

The 1% rule in actually is a 1% net return not a 10% return. The wool is over many eyes unfortunately. 

It's great to net $500 on a $50,000 house. Maybe one day people will see the light. 

  the data is for the city as a whole. I don't think you're calling me out. I've had these discussions with Underwriters and agents for years. At worst investors will understand our Market from our discussion and see that investors in the market can actually have intelligent conversations about it.