All Forum Posts by: Jeremiah B.

Zillow isn't all bad... but is also not all good... Based on my experiences:

• Zillow is not a good MLS search tool - though the discrepancies that I've found have been listings rather than solds.
• There are some markets where Zillow is very accurate. I think they struggle a little more with markets where there is a lot of distressed inventory and major rehabs.
• I've found the functionally of Redfin to be pretty freaking awesome - and is easily my online resource of choice.
• Your analysis of your comps will (should) always be better than any automated system!!! Zillow is a good starting point, and probably the best of the automated price estimators, but even in areas where Zillow is accurate, you should be doing your own comps on any deal.

I'm a small-time investor who is in the process of making my first out-of-state investment, and Charlotte is on my short-list of cities that I'm looking at. From what I can tell so far - it looks like there are a lot of great pockets to invest in.

For me - this would be a clear hold. I'm guessing your long-term goal is cash-flow, so selling a strong cash-flowing place for 15K before fees runs the risk of being counter-productive.

Another big consideration is that buying and selling real estate is expensive!!! You will have RE fees, closing fees, required fixes, appraisals, etc. - and that's not even mentioning your time. If you were going to double your cash flow, these can be justified - but I wouldn't even consider it with the increase you're describing.

At this price point, you may also run into financing issues. Finding a traditional lender to give you a 20k mortgage on a 70K property may be tough.

I agree with @John Thedford - if you want to expand, just put together a plan where your current cashflow becomes your next down payment.

I don't mean to take sides on this - in large part because I'm not sure how I even feel. But, the logic of why this could be considered ethical seems like a logical argument.

If the seller were to spend 10 minutes to post a free ad on Craigslist offering the property for what you are buying it for, plus your fee, that seller would likely get multiple offers. Insofar that this is accurate and complete, you are taking a fee for a service that saved the owner 10 minutes of 'work.' Defining this as unethical seems defendable.

With that said, I know that this is not always the case. And at times, offloading a property requires a special set of expertise or connections - in which case the wholesaler is indeed providing the owner a value-added service.

Jon wins the gold star for post of the year.

A few general thoughts:

1. PMs rarely meet the investors' expectations for service, quality, finances, etc. I firmly feel that this is a mix of unrealistic expectations from investors who want the vendor to value the property like its their own, and a thankless profession that needs high volumes to make ends meet (and still doesn't pay well).
2. I've never seen a PM act in an unethical way. I'm sure they exist - they are just not as common as some imply. Though idiots do abound...
3. I've only worked with a few companies, but I've got myself in trouble when I've used fees as the primary decision maker! Understand the size of the team, track a few properties from the company, get some referrals, etc.
4. Fees consist of a few components. Here they are, and what is normally paid:
   1. Placement fee: 1/2 of first month rent is normal. A full month's rent is common in some areas.
   2. Monthly fee of 6%-12% of collected rents. 8% is the norm.
   3. Renewal fees are a huge one! Be careful, as some charge as much as 1 month for this.
   4. Set-up fee of $100.
   5. Maintenance is a big one - be sure you understand it!!! 0% isn't rare but 10% on all services is probably the most common. Some companies have 'in house' teams that charge high amounts for things like paintings/carpet.

His podcasts are interesting.

First - the guy is an amazing speaker! And I can't emphasize that enough. In fact, he's clearly the most refined speaker of any RE podcast I've found, by a mile. I have no desire to wholesale, but I spend 30 minutes listening to him and i'm ready to post 200 bandit signs.

He also has great overall investing insights. He did a 2-minute blip on how all investing decisions are compounding that was simply oustanding.

But, there are downsides. The content isn't real deep and he spends a lot of the podcasts pointing you towards his free material, that points you to his paid material. booooo.

And some of his tactics are... marginal. His approach is to overpay to get the property under contract, and get the owner to commit to moving. Once they are committed, he approaches them about pre-planned, post-contract concessions. I have no doubt that this approach works, but I view it as highly unethical.

But, they are still good and enjoyable podcasts.

We're about 1 month from making our first out of state purchase, and have been considering it for around 10 months.

The above list certainly lists several cities with cash flow potential, but keep in mind that cashflow will probably not be your only concern. Or, at least it wasn't our only concern.

Each investor and situation is unique, but some things to consider include:

1. Historic/Recent Growth
2. Future Growth
3. Affluence
4. Cost of Living
5. Economic stability and structure
6. Appreciation
7. Vacancy Rates
8. Crime Rates
9. Current trends with hedge funds and other investors
10. Availability of house-type that you're targeting (I'm looking for 3+/2+, newer)
11. Climate (yes - weather)
12. Schools

I'm actually going through this process myself - you're welcome to read more in my blog post here. But to save you the 50,000 word post, we are looking in:

1. Atlanta
2. Charlotte
3. Columbus
4. Memphis
5. Nashville

We have a realtor who we have worked with for 8 years, and she is AMAZING! She's saved us from mistakes, held deals together with bailing twine, works through the night as needed, is incredibly responsive etc. etc. I really can't say enough good things about her (and no - I am not being paid to say this).

She works all of Portland, but is not licensed in WA.

PM me if interested.

I heard that same podcast and had the exact same thought. But, that's part of why I enjoy the BP Podcasts.

There have been a few podcasts where the guests have had plans or strategies that simply didn't make sense to me. But - this has cause me to challenge my way of thinking, and really give their perspective consideration. For me, the most extreme was with Leon Yang... That guy is miles more savvy and intelligent than me, and is advocating a strategy that I wouldn't touch with a 10-foot poll. But he's doing it, and probably making money hand-over-fist at this point.

The idea of pulling out your 401K and putting it in notes is not something I support, but the idea does have merit. Notes have pretty good, pretty predicable cash flow, and may make sense in some situations.