All Forum Posts by: Kyle B.

Andrew Massaro, I appreciate your well thought out response. I think you provided good answers to some of the problems I outlined.

I think it really comes down to a newbie investor being able to decipher between someone like yourself and a "mentor" who is going to charge the most they can out of a student because it's easier to make money that way. As I'm sure people would agree, there are a lot of mentors that fit the latter description. It just blows my mind when you here anecdotes of people paying thousands of dollars upfront to learn all the "secrets" of a guru.

I tend to be wary of anyone offering mentoring services for a fee, although it's good to hear at least a few posters have had postive experiences with this.

My main reason for skepticism is that if an investor has become profitable in real estate, why would he or she spend time not investing to make money coaching other investors. If they are coaching for the money, I would think spending time investing would be a much more profitable use of time for them... if they really are indeed successful in real estate.

One extreme example (which may or may not be relevent) is of a professional athlete that charges for lessons in their off season. I can't think of any professional athlete that would do this (unless it was for charitable reasons). Now an athlete may do this when he is retired, but that is only because they can no longer make any money competing in the sport.

This comparison may not be precisely apples to apples, but I think it gets to my point. I'd be interested in hearing more perspectives on this however, as some people seemed to have had positive experiences with paid mentors.

Carlos Garza I think you are leaving out a few assumptions. For your cash-on-cash return calculation, the $7,800 figure does not include the cost of debt, taxes & insurance, and other misc. expenses.

So even though you are getting $7,800 annually in rental income, as you calculated below, your cash flow is only $2,784 ($232 x 12 months). I think you would want to base your rate of return off this number - which would come out to 18.6% (still not bad).

Also, you will need to include an estimate for other expenses outside of the monthly cost of debt, taxes, and insurance. My guess is it would be lower for a town house, but a lot of people on BP go by the 50% rule - that is, 50% of your rental income will be required for upkeep and maintenance of the property.

At this point, I'll let a more experienced poster chime in and verifty all the points I'm making are accurate.

Kyle

Sharon Vornholt, I am using ListSource. Let me know if you disagree, but that seems to be the concensus best source according to BP members.

Also had another question for you. From your experiences with absentee owner lists, what is the % breakout of leads between buy-and-hold investors and accidental landlords (needed to move but didn't want to sell at a steep discount)?

Sharon Vornholt and Michael Galloway - thanks for the responses. I appreciate the feedback.

Sharon - specific to your post, I've been testing out the ListSource criteria further, and I have discovered (at least for the area I'm looking at) that a significant amount of homes do not have equity % data. For example, after building out my geographic area, if I add the criteria: equity % from -99% to 100%, about half of the addresses are automatically removed. Furthermore, I've built an absentee owner list (based on market sale date pre 2000) that produced a little under 400 addresses. When I add the same equity filter above, the list shrinks to about 50.

Alternatively, if I swap out the last market sale date of pre-2000 and replace it with equity % from 40 to 100 percent, my list jumps to 832 (621 of which were purchased since 2008). So from your experience, it sounds like there could potentially be a lot of "tired landlords" in this 621 figure even though they purchased relatively recently?

Thanks again for the detailed feeback - this is all great information for me.

Kyle

Brandon Turner - thanks for pointing that out. I was actually wondering how that was done. Hopefully this thread will continue as well. I've learned a ton about ListSource over the past week from other BP members.

Thanks for the response Fred. I think I actually figured out what was bringing the numbers down so much. After playing around with the criteria for a bit, I ended up with 388 addresses for an absentee owner list. From this list, if I added any equity % stake (-99% to 100%), the list dropped to only 50 addresses.

So it seems the issue was that for these absentee owned addresses, equity data isn't readily available in the area I am looking at. So to filter out houses with low equity stakes, I've specified a last market sale date of pre-2000. I figure at least 13 years of ownership would lend itself to a minimum equity stake of 40% (assuming 20% down payment).

So I have spent the last several days searching through numerous posts on BP to refine my criteria for an absentee owner list. The criteria I am using, which I am basing off recommendations from members on this site consists of:

- Equity: 40%-100%
- Property Type: SFR
- Bedrooms: At least 3
- Absentee Owner
- Exclude Corporate
- Exclude Trustee
- Last Market Sale Date: Pre 2006

From this list, my screen is yielding only 119 addresses (with my selected area yielding about 130,000 addresses before adding any additional criteria). This is my first time using ListSource, but even so, this seems like a small amount of results compared to what I've read other people coming up with. In particular, adding the "Last Market Sale Date" reduced the list from about 820 to 119.

For those experienced with obtaining these lists, do these results sound typical or am I missing something? Also, thanks to everyone who has given me advice on this in the last several days.

Carolina - what area are you focusing on? I'm building a list in NW Indiana so I would assume this area would have less weighted towards rentals than Chicago.

Are most of the call backs you're getting from tired landlords then?

Thanks for the response Chris.