All Forum Posts by: Anthony Gayden

Originally posted by @Justin Robinson:

I’m a new investor based out of San Diego, Ca. Yesterday I came across an investor getting out of the game. They own a total of 28 properties in the Fontenelle area of N. Omaha. 12 are vacant and need extensive rehab. The others are rented out but I’m sure they need rehab as well. From what I could find out about the owner he seemed to be the cliche lower class neighborhood slum lord. I know it’s the lower class neighborhood with a lot of section 8 but does anyone know if there’s a revitalization going on there? I read that a lot of young professionals are moved my to the area? Could it be a good place to find deals? I have a meeting with an agent on Friday afternoon. I’d love some feedback. I’ve read that there is an attempt at economic development for he area. Any truth to that? Thanks much! 

 I live in Omaha in the Dundee neighborhood, which is relatively close to Fontenelle. Fontenelle has some nice older homes, but it would be quite a stretch to suggest that the area could even be considered "up and coming".

For now North Omaha is just a lower income area and you would have to go street by street to find the decent rental areas. That is not to say that it is a bad area to invest, but you need to be prepared and know what to expect. It is a cash flow market.

Originally posted by @Charletta Goodman:

I have 2 potential properties in the same area with same potential value. P1 for $40k will require $15k to repair and update..P2 $80k with $5k needed for repairs . Same seller is offering the properties.Is it better to buy and repair or purchase the one with the least repairs but higher price? I will be paying for the repairs out of pocket.

 You answered your own question. The property that costs 40K and needs 15K of work ($55K total investment) has the same potential value as a property that you would pay 80K and needs 5k worth of repairs.

As an investor you want the most potential for gains and the one with 15K of work will be a bigger win for you.

Originally posted by @Joshua D.:

So me and my wife started are company almost 4 years now. Doing very well as far as cashflow and everything. Are current debt is $286,000 and alot of equity from other properties to use around $300,000 i wanna grow to alot more units say 50-100 or really thousands. I cant imagine trying to manage that many properties. With lawn care of empty properties and turn overs and trying to manage my construction crew? Any advice i wanna really expand and grow only get once chance at this and wanna create something special for my family and myself. Have nothing else to fall back on.

 I'm assuming that the properties that you own are lower cost properties?

Why change to a format that you don't know? If you are having success with single family homes, I siuggest you keep buying them. The thing is that you need to set up systems and processes that will make management easier.

It sounds like you are a very hands on manager if you are out there doing all the work for turnovers and lawn care. If that is the case you may have to look into contracting out some of what you do as you expand.

Originally posted by @Dawn Curry:

I get markets, lifestyles and goals differ.. but how much passive income do you need coming in to walk away from your full time job?

We all are ambitious if we’re on BP.. so what are your goals? What is the line where you say “this is enough for me?”

 I need a lot. In fact it can't even by quantified by a number due to inflation or any number of issues that could arise in my life or my family's lives.

For that reason I will never limit myself to a specific number.

To the person who think's $44K a year is enough to retire. What happens if you have a major medical issue? What happens if your parents need long term care? $44K isn't going to get you through to the other side.

I have had some major things happen to me in the last year, and if it wasn't for the fact that I have substantial savings and a decent income I would have been buried. Life happens and you have to be in a position to handle these challenges. I can't help my family or friends in their time of need if I am barely skating by.

Derek Luttrell I pay the loan back over time. I will not use the proceeds from my cash out refinance to pay it back. The rules of my retirement plan won’t allow you to take another loan until a year after you pay the last one off. The result is not having access to cash to do deals.

Andrew Campbell That’s great and very exciting. What are your goals for the property and what are you doing next?

Ross Miller I doubt the tenant will be able to pay for the treatment. Besides it is a necessary fix so get it done ASAP.

Derek Luttrell Using your own money you can still accelerate the process by using low money down tricks. Just as an example I borrowed from my 401k for the down payment on three of my properties. I utilized an FHA loan and 3.5% down on one. I bought with a conventional mortgage 5% down and did a live-in flip. I successfully completed a BRRRR to get my cash out and reinvest. Next I’m going to use equity from properties I own as a down payment . In the end I used all my own money but was able to manipulate it so much less actual cash came out of my bank account.

@Mark K.

Real estate is pretty simple. A person with a basic understanding can successfully invest in it and understand it.

The stock market is not simple. The amount of research one would have to do to learn how to consistently make returns of 40% in a year (I made 40% in the stock market last year too BTW, it was just a good year for everyone) is huge.

Since it is so complex and unpredictable, the common advice is for everyone to put their money in index funds via a tax advantaged account such as a 401K or Roth IRA. This is what 95% of the people I know do including me.

We have to make a comparison between stock investing and real estate investing keeping that in mind. It is not a fair comparison when comparing a small landlord with a few houses to a day trader with years of experience. The grand majority of people will come out ahead with real estate in terms of actual returns.

BTW, I believe Scott is the President of Bigger Pockets now.

Originally posted by @Susan Armstrong Fisher:

A reputable apartment investing mentor with a program out of Dallas, Brad Sumrok with the Rat Race to Retirement program, says that anything less than 60 units will not economically justify the costs of professional property management and that self-management can't be effective more than 45 minutes away from where you live.  Does anyone agree or disagree?  

(side-note, I'm considering buying my first 12-unit apartment complex (that can be converted to condos) 3 states away) and am being discouraged by local investor friends).

 I disagree. That person made mo mention of any variable. I own two 4-plex properties in two different cities 1000+ miles from where I live. Both use property management and cash flow quite well. That alone seems like proof that this person using generalities does not cover every situation. Keeping that in mind, the author could be talking about full-time, on-site property management. For smaller properties that does not make sense.