All Forum Posts by: John Williams

Some states may be more enjoyable than others when it comes to running a PM company. It is a great business as long as you have some level as scale.

I like Clarksville, TN because of the strong fundamentals, minimal volatility, and balance of cash flow and appreciation opportunities. 

You'll never retire from flipping because that is active income. If you stop flipping, your income stops. Unless you are turning the profits into buy-and-hold rentals of course!

Cash flow is still possible, just more difficult than it was a couple of years ago! By buying down your rate and placing a larger down payment, you can still achieve true cash flow. 

If you are able, attend a local RE meetup and connect face-to-face with agents there. Pick their brain about investing to ascertain their knowledge.

If not, try joining local real estate groups on Facebook and asking for a recommendation. 

Another good strategy is to connect with a local property manager that does real estate sales, or can refer to an investor-friendly agent. 

 Problem with the stock market is that it's outside your control to a large extent (same as betting on appreciation) and you don't get the tax benefits and leverage. You have a good point about the hassle factor though. 

 Good point, if you have plans to sell in the near future, could be better to wait. But if you're holding long term with no plans to sell in near future - better to get them leased up!

 Would I buy the 5 homes with negative cash flow? It depends! If you budget the negative cash flow over the course of the hold period and have reserves set aside to fill the gap, there is no problem (assuming your investment meets your target appreciation rates - I understand there is no guarantee there). 

For example, you can buy 5 new construction homes at great price points in my market that would be perfect for this strategy. They certainly do not meet the 1% rule and they may be slightly negative cash flow. However, you'll minimal capex/maintenance/vacancy and the overall return after 5 years could be very strong.

 Depends! Some companies allow property owners to select tenants and set the screening criteria...

We do not - our criteria does not bend. 

Here's why I don't like the 1% rule...

A buy-and-hold investor should think long-term. 

The 1% rule doesn't matter as much if you have a 5-10 year investing horizon because it does not take into account appreciation or other benefits of holding (tax benefits, etc.)

The 1% rule stops a lot of folks from getting started. 

Think big picture.

Consider all the benefits of the investment over an extended period of time and get started! Take action! You'll thank me later!

You just picked a new market to invest in. Who is the first person you call in that market to get started? Why?