All Forum Posts by: Stone Jin

I stopped investing in AZ and started investing in north west ohio. I think if you get on wholesaler lists you may have a shot at finding cashflowing properties, the MLS is not going to yield much result in Phoenix.

I think with Maricopa county being one of the highest growth counties in the country, there is just a lot of demand from retail buyers and investors that are just trying to start. 

I'm actually transitioning my position in Phoenix into properties in Ohio.  Trade 1 for 3.

Good luck

In your math I don't see any costs set aside for monthly maintenance like landscaping or utilities for water and electricity for common areas.  

I wouldnt say this is a good deal.  You are exerting nearly all your cash on something that will not cashflow.  1 AC going out will wipe out your cashflow for a year.  

If you use the 50% rule (50% of your gross rents will be used for non debt related expense), then you are left with 2800, once you consider P&I at 2500 a month, you are left with roughly 300 cashflow.  

My experience from 11 years of owning and managing my own units is that crap will happen and you need to have money to cover it.  

Good luck

I believe midfirst also has some programs.  I've talked to both banks and midfirst had slightly better terms, but it's been awhile since I've spoken to them.

It may be easier to look for  a local lender as lenders in your area may not be licensed to originate loans in your target investment areas.  

I'm in AZ and when I started to invest in Ohio, I couldn't find a conventional lender that matched my needs so I asked my AZ lender to get licensed in Ohio, and fortunately they did.  

Good luck,

Stone

@Mary Jay If you are negative cashflow on your rental properties, should you consider selling them for seed money to 1031 exchange into something that is not cashflow negative.  A very smart investor told me that cashflow is the only thing that matters because cashflow pays bills.  I adopt that model very much.

What it sounds like to me is that you have an income problem.  If you can only save 10K  a year, and want to retire in 4 years, then simple math says you can feasibly save 40K to invest in the next 4 years, say you compound that with some cashflow you are at 50K.    Have you considered getting a realtor's license to sell homes.  If you sell 5-6 homes a year that what expedite your process.

As @Shiloh Lundahl points out, to achieve your goals though not impossible will take a lot of hard work and time.  A lot of the people on the pod casts are very successful and have accomplished amazing things.  However the number of people who do not reach those peaks greatly outnumber the ones that do.

The last thing I want to point out is that right now a lot of investor are buying in the midwest.  I'm not sure where you can buy a 20K house anymore.  The risk of a 20K house is that you get a tenant willing to live in a 20K house.  I think the cashflow numbers you are projecting are rosy as those houses come with high risk and high repair costs.

So to recap, take a look at why you are holding onto cashflow negative properties.  See if you can 1031 exchange into positive cashflow properties.  Find a way to make more money.  Lastly, understand the risks in investing out of state into C to C- neighborhoods.  

Good luck

Stone

@Trevor Dominique  It really depends on your strategy.  If you go on Zillow and look at what's available for rent in Toledo, I would wager that the vast majority of the rentals are in the 700-950 price range and that vast majority of the rentals are within a couple miles of each other.  

I think and am betting on demand for slightly nicer property in the Toledo market.  I'm okay making a little less up front and when the loan is paid off having significant cashflow from each home.  

I have properties in low end and high end in Phoenix and my experience has told me that tenants from both demographics will have issues and will call you to fix things.  The cost of unclogging a toilet is the same in both cases, however as a percentage of monthly cashflow it will vary widely.  

Good luck,

Stone

@Amy Thompson Well I didn't say Arizona :).  I'm buying out of state in the midwest.  Buying in A- neighborhoods.

Last year I did 6 1031 exchanges and bought all in Phoenix area.  The rent to purchase prices ratios weren't great, however I was able to preserve my cashflow and buy into a bigger better asset with more equity.  

For example. I had a condo that we bought for 55K and sold for 155K ish, with that I bought 2 SFH in East Mesa at 180K each (picking up some debt), I had to fix them up a little but they are now worth 220-240 each. My cashflow from the 2 houses combined is maybe a little more than the 1 condo, but the upside is much greater.

I hope this make sense.

Hi Amy,  I'm in the exact same position with 2 different properties and I'm treating them in 2 different ways.

I have a townhome in Chandler that I bought in 2009 for 75K, it's worth 160K-170K now.  I can rent it out for 1050 a month, after taxes/fees I can cashflow about $800 a month

I have a second town home I bought in 2009 for 30K, it's worth 75-80K now, I can rent it out for 900 a month, after taxes/fees I can cashflow about 600 a month.  

The first condo my return on equity is 6% (800*12/160000), the second condo my return on equity is 9%.  I can go out into the market place and get 10% returns so the first condo because it is far less than 10%, I'm going to sell and 1031 exchange.  The second condo because it already meets our min requirements or at least so close to it that it would be more trouble than the gains I would get, I'm not going to sell and will just keep renting it out.

In your case you can trade for cashflow, sell at 220K and trade into a sfh in east valley that rents for 1500 and cashflow more than the 600-700 you are getting now.

Good luck,

Stone

Adding @Martin Dimitrov to follow this thread.  

@DeWitt Gibson The conference rooms at Gangplank can comfortably seat 10-15 people but anymore than that would make Gangplank not the right space.  I've participated in "Mastermind" groups and a good size would be 8-12 people to start initially.  People will come and go.  @Shiloh Lundahl can may be host larger groups at his office.