All Forum Posts by: Ken M.

https://www.cbsnews.com/texas/news/ken-angela-paxton-mortgag...

Local News Report: Texas AG Ken Paxton claimed three homes as primary residence

Updated on: July 24, 2025 / 9:08 PM CDT / AP

Texas Attorney General Ken Paxton and his wife, state Sen. Angela Paxton, are longtime owners of a $1.5 million house in a gated community in McKinney. In 2015, they snapped up a second home in Austin. Then another.

The problem: Mortgages signed by the Paxtons contained inaccurate statements declaring that each of those three houses was their primary residence, enabling the now-estranged couple to improperly lock in low interest rates, according to an Associated Press review of public records. The lower rates will save the Paxtons tens of thousands of dollars in payments over the life of the loan, legal experts say.

The records also revealed that the Paxtons collected an improper homestead tax break on two of those homes at the same time.

@Ken M.@Ken M. Yeah, it's a full blown business. We’ve got about 20 people involved, and profit margins vary deal to deal. There’s a lot that goes into keeping it consistent and what it took to get us here. You can do a one-off here and there, but if you’re looking to do this full time, just know it’s not for the faint of heart.. 

A few years back, I walked through a two-bedroom bungalow that looked like time had stopped.

The curtains were still drawn. A calendar hung on the fridge with hopeful notes—“call plumber,” “ask about refinance,” “get school supplies.” But no one lived there anymore. The lock had changed, the bank had taken over, and what was once a home now sat in legal limbo.

The owner had equity. They weren’t in over their head with the loan. But they missed a few payments after a medical emergency, stopped opening letters, and assumed they had time to figure it out.

I’ve seen flips, short sales, and investment opportunities. But this wasn’t that. This was grief in drywall form.

I’m sharing this not as a cautionary tale for profit—but to ask: have you ever walked into a house and felt what it meant to lose it?

I wonder how many people are sitting in homes right now, thinking they’ll figure it out tomorrow. I wonder how we reach them before the calendar pages stop turning.

Hey Jon, fair question. I’ve been full-time in real estate for a while now, and yes, wholesaling can absolutely work if you treat it like a real business.
I've been doing it for 5 years now and started by locking up small deals and assigning them for 5 to 10k spreads. Over time, I built out a team, added systems like Batchdialer, Launch Control, etc. and focused hard on consistent lead gen.
That said, it’s not easy money. The marketing grind, seller conversations, and contract handling take some getting used to. But if you stay consistent, build relationships and keep learning, it’s definitely profitable. We are on track to gross 1MM this year!
Happy to answer any questions or walk you through what worked for me, just shoot me DM.

Quote from @Ken M.:

Quote from @Chloe Mariant:

Hello Ken and thank you for your reply!

So 1) check calculations and make sure property is worth buying for purpose of intent 2)figure out if its a deed of trust or conventional mortgage 3)make offer and bring the loan current asap

Kinda. You skipped a few steps, but that's the general idea.

First do step 1. You have to make an offer that the seller accepts, but with a pre-foreclosure, it has to be enough to cover paying off the loan, arrears, legal fees and realtor fees.

Deed of trust and conventional mortgage are something different, but they are related.

Personally, I wouldn't make an offer on a house pending foreclosure unless I knew what I was doing or had someone I trust walking me through it. But, that's me.

 As you can probably tell I am a newbie so I will follow your advice! Thank you for your replies!

@Jonathan Warner I understand and I'm telling you GPT is wrong.

The way you're refining your queries is making GPT respond in a way to confirm your own assumptions and beliefs. It's not giving you unbiased data-driven responses. It's telling you what you want to hear. While your fellow humans are telling you a reality that you don't want to hear, so you're deflecting, trying to make out that we don't like your AI friend.

I'm sorry to tell you this but you have a much bigger problem than being a new investor who's relying too much on AI for analysis. You're becoming psychologically dependent on AI stroking your ego. You need to get away from AI and seek mental health assistance from a human.

But I understand you'll just find that comment offensive. So I'll just wish you the best and hope you don't end up in a lawsuit or bankrupt from following your AI friend's advice.

Quote from @Ken M.:

Quote from @Jonathan Warner:

Hello. I'm a newbie investor with minimal experience analyzing deals. 

My agent sent me this one off-market deal yesterday and sort of got me fired up about its potential. However, I underwrote it quite conservatively and it has around -150 a month in cash flow.

Could you guys please take a look at how I underwrote it and tell me if you think I did everything properly?

1. The purchase price is around $210,000. It's a 1,000 sq ft 2BR/1Bath that has about 700 sq ft in basement space that could be converted into an extra bedroom and bathroom. I put in a conservative estimate of $50,000 for the rehab. It's ARV, based on similar comps in the area (I did this myself on ChatGPT), would be around $330,000-$340,000. I set it at $335,000.

2. A conservative estimate for the annual maintenance and repairs would be around $2,500 and annual CapEx comes out to around $1,117

- I used ChatGPT to help me with this part. It took into account the new roof and HVAC and gave me a 30-year budget estimate and annualized the costs. 

-

Expense Item	Schedule	Cost per Event	Total 30‑Yr Cost
Roof Replacement	Year 30	~$11,000	11,000
HVAC Unit Replacement	Year 15	~$7,500	7,500
Water Heater Replacements (2 cycles)	Years 10 & 20	~$2,000 ×2	4,000
Flooring/Interior Cycle (2×)	Years 15 & 30	~$3,000 ×2	6,000
Major Systems Update	Year 20	~$5,000	5,000
Routine Annual Repairs & Maintenance	Every Year (30 yrs)	~$2,500 × 30	75,000
Total Over 30 Years			$108,500

Property taxes would be $490

Insurance would be $2,100

Property management would be 10% of rent which is conservatively estimated at $1,900 post-rehab, so $190 per month and $2,280 annualized

I'd likely pay around $25 a month for garbage, so $300 annualized 

I assumed a new tenant every 3 years since it will likely be a family rental, so I estimated $63 a month leasing fee budget. 

Improvements would run me around $40,000-$50,000 so I put it in as a $50,000 budget

I assumed a 20% down payment on the purchase price at a 6.85% interest rate. 

Overall, it came out at around -$110 in cashflow. Despite it's negative cash flow, considering the rehab budget and ARV, I am still considering other ptions for the property. However, even if I were to flip it, I'd prefer the have a good exit strategy should I be stuck with the property for whatever reason. If things went sideways and I was stuck with the property, I'd be down $110 a month just hold onto it.

Any help would be greatly appreciated! 

Your comment: "I used ChatGPT to help me with this part." cracks me up. No offense intended. Instead, join up with someone with experience. Join a REIA (NationalREIA.org) ours is $20 per month as a sample.

Your numbers are wrong. This is real estate. It's always more expensive than you project and the surprises WILL happen.

I once had my cat in my arms showing it a butterfly on a leaf. Before I could think, the cat whipped out it's paw and caught and ate the butterfly. First, I didn't know my cat had a taste for butterfly. Second, the forces lurking to consume your profit on a real estate transaction disguise themselves as taxes, fees, capex, floods, winds, termites, neighbors, evictions, lawsuits, random acts and on and on.

Yeah, poor butterfly.

I understand people pew pew ChatGPT qutie a bit here. But the fact is, if you use it properly it can streamline and crawl through hours of manual research and give you the answer in seconds. If you are trying to move quickly on a deal before the compeition swoops in, this is quite valuable. I agree that everything should be verified once the information is recieved. But it was able to do the following for me in about 10 minutes. 

1. It crawled through other 3BR/2Bath listings in the same location with similar square footage and provide me with the Median list/sale prices. This allowed me to take the median sale price per sqft and apply it to my property to come up with the $340,000 ARV figure (again this is definitely better than napkin math, no?)

2. It ran a similar comp report for property of this type in this area and came up with an estimated rent range $1,900-$2,100 (I went with $1,900 to be conservative).

3. It provided a higher "optimized" rental range of $2,100-$2,200 to which I said "hmm, I wonder if people would be willing to pay that in this area to begin with?" So I used to it run another report on the average salary in this area, and to do some research on the public perception of the school district. Lo and behold, the school district is subpar and the salary average is only about $70,000, so that led me to the conclusion that a high-end rehab would go beyond what people are willing to pay for in this area and I would just be spending extra cash on a rehab that no one is willing to pay rent for. If I did ask for $2,200, I would likely have to provide concessions given this new information. I mean... It just steered me away from one bad decision there so that's pretty cool, right?

4. It even provided vacancy assumptions for the local area and suggested underwriting a moderate vanacy % into the underwriting. Again, this is something for to verifiy put it's a pretty good starting point. 

5. It made an important distinction for me that I didn't know existed, and that is "above-grade square footaage vs. below-grade square footage. That is, even if I finished out the basement into an extra bedroom and bathroom, I wouldn't be able to add the square footage to the total and I would still have to make that distinction if I were to list the house for sale again. Apprasiers generally count below-grade square footage as 60% of the value of normal square footage. That's good to know. My agent never told me that. However, I could still market it for rental with the total square footage combined. Basically, what's marketable (as functional square footage for a homebuyer) the ARV would be $340,000-$360,000. If I wanted to be super conservative and go based on the 60% value of the converted basement space provided by the appraiser, I'd put it at $300,000 ARV. This is the only area wher I didn't lean "super conservative" since I'm confident in my agents marketing abilities and I trust him when he says he could market it in that range. 

🧮 ARV Estimate for Your Post‑Rehab Property (3 BR / 2 BA)

Scenario	Equivalent Sq Ft	$/ft² Estimate	ARV Estimate
Appraiser-adjusted (60% of basement)	~1,478 ft²	$205	~$303,000
Full market-finished total (1,758 ft²)	~1,758 ft²	$205	~$360,000
Mid-range conservative case	–	$190	~$334,000

Again, not a bad starting point imo


6. It found that rents in my area are up 5-6% YoY. I still plugged in 3% to be conservative

Again, I believe it's not some magic go-to that you can trust 100%, but it provides some valuable information which needs needs to be verified and discussed with someone knowledge. That is my next step and that's why I'm here. We don't have a REIA near me unfortunately. There's one about a 3 hour drive away but that guy charges like $10,000 for personal coaching.