All Forum Posts by: Kevin Fletcher

I was doing some reading about the 2008 bubble burst of the real estate market in the book "The AfterShock Investor" by David Wiedmer. He explains the cause of the crash, which we should all know about anyway, but he claims that the the only reason the market has rebounded is because of QE (Quantitative Easing) aka Federal Reserve printing money and putting it back into circulation. This Solution just kicks the bucket down the road as they say and causes inflation to rise/speed. The more the Fed props up the economy this way, the worse it will be when it all comes crashing down.

So, that being said I have a few questions on what people think about this as it relates to Real Estate.

#1 Do you think the hyper-inflation will increase the value of real estate. I.E. if a loaf of bread will cost $15 dollars will my house also be worth 15x its current value (exaggeration of course)? or will the economy crash so bad that people wont have the jobs and income to pay for the houses, which will kill our market?

#2 Are any investors here planning for a swift economic downturn, as predicted by some forecasters? and If so, How are you planning to model your business/investing strategy with this possibility in mind?

I'm very Interested to see what people think on this so please share your thoughts

Well - I just learned a lot Thanks @Andrew Herrig for the great thread. I definitely took notes on this

@Account Closed Thanks, I think Ill try it on my next one. I think the only reason the eventual buyer should have a problem with using your title company would be because their an investor or they have an agent with a history or allegiance to a different title company. Do you just disclose that they need to use your title company up front? How do you let them know so it doesn't become a deal breaker?

For me, Clean lines on landscaping and well maintained green grass. Fresh paint and a nice red front door goes a long way.

As far as the deck/patio, it obviously depends on the property, but It should help the property sell quickly which is worth money, but wont get you much of ROI.

@Luther M. There are many ways to find unlisted properties, they just generally take a little more work to find. @Account Closed is right you gotta catch them before they are listed with an agent. Networking and advertising that you are willing to buy houses helps. Many people starting out do "Driving for Dollars" campaigns where they actually pick a target area and they just drive up and down the streets looking for signs that a property is distressed i.e. Trash, cars on the lawn, bad roof, un-kept lawn, broken windows. Then writing down the addresses and send letters to the owners expressing your interest in buying. Some of the owners will need to be tracked down using county records. There are also Craigslist ads, wholesalers, public trustee auctions, web auctions, and much more. Good luck finding a deal

@Matt Swartzendruber

I Heard this very general rule of thumb I learned that actually seems to get me pretty close with my rehab estimates.

Its the 3 TIER WAY of looking at prices for a primarily cosmetic flip.

Tier 1-LOW END $10-15 per Sq ft- That's just very basic cosmetic improvements

Tier 2 - MEDIUM $20 per Sq Ft. (where I Generally Aim)

Tier 3 - High End $25-30 per Sq ft. For upper end cosmetic improvements

Then I just add on any major improvements that the house may need, like Roof, garage, Furnace etc.

Good Luck with your estimates

@Rick McCray Yoga and Meditation my man. I have found the best thing that helps me is guided hypnosis. If you can manage to not fall asleep and really follow instructions without letting your mind wander.

Put some headphones on and Give it a shot..

http://www.youtube.com/watch?v=WfT7JuwpK2k

Ive never built a multi-unit place but I think one of the most important questions is where are you planning on building? Of the units I own I find it a lot easier to rent out units with 2 bedrooms and 1-2 baths. I like to have a little bigger units to attract families personally, because there is less turnover. Some people think there can be more wear and tear with families from small children. You should really get online to try and get an idea of what the apartments in your area are renting for, so you know what your return will look like. Many people who purchase rentals look for 1-3% return monthly on the full purchase price of the property, and I would assume its the same if you're building. I.E. if you spend 100,000 to build a unit you would ideally like $2,000 back per month in rent to cover all expenses. You can still make money with less then 2% but you gotta decide what your comfortable with and what make it a good deal for you.

I was told by a friend about using hold open title policy for flips because it can save a lot of closing costs when flipping. Does anyone have any experience with these? Is it a good option for flipping a SFH?

@Adrian Tilley Thanks, yeah, I am just trying to know the best techniques for navigating the tax system to give myself as little liability as possible in the future. I plan on seeing an experienced tax attorney soon.