All Forum Posts by: Account Closed

@Travis Daggett

@Alex Anderson

Thanks for the quick replies!

I looked on the assessor's website but I cannot find owner information like names, phone numbers, etc. Am I doing it wrong? Or do I need to contact them in order for them to relinquish this information (pay to play?).

Ali's last paragraph sums it up pretty good.

If you're a buy and hold guy, I'd steer clear of most of the bigger coastal cities because the numbers simply don't work for rentals. The rents in places like New York and San Francisco and Los Angeles merely cannot keep up with property values, even amidst a financial crisis. Texas in general is a really good bet right now, along with many others. Take a look at some of the recent market reports to guide you to where to put your money. Listen to podcasts. Look at market trends. Follow and model what the most successful guys in the biz are doing. Oh, almost forgot- Scour BP!

Welcome and good luck!

I have been riding my bike around my neighborhood for a few days and have come up with a list of about 60 properties that are showing signs of distress(property not being taken care of, over-grown lawn, junk in the yard, etc.). I obviously have no idea whether or not the owners of these properties are in fact in a distressed situation, which is why I will be sending letters to these addresses indicating that I want to buy the house.

My question is how should I structure my approach? What should the content of my letter say? Can I mail to these addresses without knowing the owner's name (Do I need to know the owners name to put on the envelope?)

I can, and plan to, find another few hundred of these properties in my surrounding area simply by riding my bike around over the next couple of weeks. With a budget of about $300/mo. for my marketing campaign, my options are limited as to my approach, which is why I am seeking advice. My hope is that I can learn the most effective way to do this through some of the BP experts. I am willing to put more time in and get creative if it means that I will be able to stay within budget.

Unlike most wholesalers, I am looking to secure a wholesale deal to rehab myself, so I am interested in quality more so than quantity. I only need one really good deal to get the ball rolling in my neck of the woods, as the rehab spreads are a lot higher here. Investors and rehab team are already lined up, all that's left for me to do is finding the deal.

I'll second Michael's response. Dead on!

Those utility bills sure do seem high up there in Canada! I'll have to agree with Aaron that your net return is pretty low considering what you are putting in up front. You also failed to factor in any vacancy losses you might incur, which can definitely put a dent in your wallet, especially if the tenants are on a month-to-month lease. In addition, will you be managing the property or will you hire a manager? This should be factored in as another expense if the latter is the case.

I don't know anything about real estate in Canada, but I do know that there are still really good deals here in the US in select markets. I think your deal above would be a lot more appealing if you didn't pay those utility costs and made each tenant do so. Is water, electricity, gas all separately metered?

I am currently working with a 'turnkey' provider to purchase our first investment properties in the DFW market. My wife and I live in Los Angeles and we both work full-time and have pretty busy schedules. After doing a lot of research here, reading books, and listening to podcasts for about 6 months, I gained a good grasp on the different avenues of REI. Off the bat, we chose to be buy/hold/lease investors, as it is the easiest way to earn passive income immediately. We chose to use a turnkey provider because it's a lot less work than doing a traditional purchase using an agent. Most real estate agents, I've found, are not very seasoned when it comes to working with real estate investors. The turnkey guys are valuable because, from an investors standpoint, they know where to focus and who to network with- they deal with these kinds of transactions daily! Surely, if you have access to the MLS or if you are motivated enough/have the time to network and scour hundreds of deals daily, then you could definitely find a better deal than what you'd get from a turnkey provider. It depends on your business model, how much you value time, and your lifestyle. As I mentioned, we are very busy people who cherish our time off. Therefore, I do not want to spend x amount of time finding those really good deals when I'm off, at least at this present time. All I care about is that 1.) The property meets my criteria and 2.) The deal makes sense the day I buy it. With a turnkey provider, you are generally going to pay right around market value for the property. The difference is that they're there to hold your hand if you need that kind of attention. They are also there to do all of the networking and communication with the rest of the team, if you were to choose to be so removed (which I do not recommend). For me, I generally trust no one. I do my own research and then I will consult with other people to make sure that the information is consistent across the board. From my experience working with a TK provider, I'd say that the whole process has been very transparent. I have never felt that I was being taken advantage of or that someone was trying to withhold information from me (and I would have known because I did my due diligence). Overall, my experience working with a TK provider has been very positive. From our first conversation (about 3 months ago) up until now (about 2 weeks from closing), the provider I am working with has been very informative, diligent, and willing to help me with any questions I may have. PM me and I will give you the company's contact information.

Ok BP,

So I'm somewhat paralyzed by analysis. I am looking for my first investment property, and I've narrowed down my search to 2 markets and about 8 different properties (I know, probably not narrowed down by most standards). I keep looking at the numbers, doing research of the area, looking at google maps of the neighborhoods, etc., but I can't make a decision! The property I am posting about is the one that will give me the most cash flow/mo. but is, IMHO, the most risky based on the tenant quality and neighborhood.

Here it is:

2,010 sq.ft Duplex with Section 8 tenants in place:

Purchase price: $68,000

Rent total: $1,250

Property tax: $1300/yr.

Insurance: $600/yr.

Maintenance, Vacancy, PM: 10% each

Financing:

Down payment: $17,000 (25%)

Loan Amount: $51,000

Closing costs: $3,500

Initial Cash Invested: $20,500

Interest/ Term: 5.5% (conservative rate, will probably be better) 30 year fixed

Mortgage: $290/mo.

Cost/sq.ft: $34

Numbers:

Expenses including mortgage (including assumed vacancy/mtnce: $823/mo.

Cash flow/mo: $427

Cap rate: 12.7%

Cash on cash return: 25%

I do not know whether or not the tenants pay for utilities or if the current owner is paying utilities. I also don't know the overall condition of the property. At this point, I know that it has been rehabbed to the extent of indoor/ outdoor paint and refinished hardwood floors (not much, I know). I will obviously need to get an inspection report to find out about the overall condition of the property, but assuming no other issues, doesn't this seem like a good deal? Again, it has Section 8 tenants and the neighborhood is not the greatest, but also not a war zone area. Please take the above into consideration and let me know your opinions/experiences with Section 8 tenants.

An early thanks for your help!

Hey BP,

I'm looking for a CPA in the Los Angeles area (preferably the westside) that is familiar with income property investors. Thanks for your help!

Please share! I have not been able to find a market that accomplishes the 2% rule while still making sense outside the numbers.

Ryan,

I want to buy and hold because I see that cap rates are good, R/V ratios are good, there is a high rental market, and I am looking for immediate cash flow without putting in any rehab work. Both my wife and I work full time in Los Angeles and are unable to devote time to any other avenue of REI (although down the road I expect we will be more interested in exploring those different avenues).

I am looking for 8%+ caps and > $300/mo. cash flow. B- and above rental market neighborhoods and I'd prefer non Section 8.

Thanks for your insight regarding the tenant-friendly environment present in Chicago. Do you have any personal stories to share about how this tenant-friendly environment did you (or anyone you know) wrong? I am open ears and I am merely looking for advice on how to proceed and whether or not Chicago would equate to a sound investment for a virgin investor.

Thanks for your time and I appreciate your insight.