All Forum Posts by: Kris Wong

These are full cosmetic rehabs. We do not go down to the studs, but do replace all the cabinetry, flooring, and what not. Around $50 - $60K for all 4 units. Rents are $1200 for 2/1.

There is a lot of development in this area. I think that trend will continue for the foreseeable future. It's definitely an area in transition, but I believe there is money to be made. I own a quad here in a JV, and my partners own another quad as well. We're doing/have done full rehabs on both properties.

In terms of a 1031, it's definitely a productive strategy when used properly. The problem that makes a 1031 extremely difficult is the 45 day window. It's a short amount of time, and Austin is one of the most competitive RE markets in the country. It has been for a few years. So, 1031 is productive if you buy right - into a cash flowing rental property. Those properties are few and far between in this market. Do you have a team on the ground here that can help you be successful?

I also forgot to mention the section 121 exclusion, which you may lose if you hold on to your previous home as a rental for too long: https://www.irs.gov/taxtopics/tc701.

Based on your numbers, you will certainly cash flow negative on your CA house. An "asset" that loses money on a monthly basis is not an asset - it's a liability. Unless "investing" in liabilities is your thing, I suggest you sell that house and invest into something that's going to generate a positive return for you. At the end of the day, it all comes down to the return of one investment vs. another, and where on the spectrum you prefer to be in terms of monthly cash flow vs. wealth creation.

Secondly I would say, do not just dump that money into your new primary residence. Again, that's a liability, not an asset. Equity in your home generates no return. It's completely unproductive until you pull it out and invest in something productive.

My advise - focus on the team in your target market. This is way more important than the market itself. Perhaps look into who you can partner with in 2 - 3 markets, and see where you can build a team that you trust. Obviously, the closer the market is to you, the more feasible it is for you to check in on your properties.

Also, I would avoid Memphis. It's a tougher market to be successful in than many others. It has negative job growth over the past 12 months, and well as low median income, and high crime.

http://www.city-data.com/city/Memphis-Tennessee.html

https://www.deptofnumbers.com/employment/metros/

Lastly, when building a portfolio of that many residential properties, probably the first hurdle you will encounter is lending. You can't have that many conventional mortgages. The hard limit is 10, per Fannie Mae guidelines, but there are other requirements as well, like DTI. You will need to find non-conventional financing, which is typically at a higher interest rate due to increased risk to the lender. That being said, do you first deal or 2, and you can find a solution to this problem (or revise your strategy) as you go.

I own [4] SFH turnkey in Kansas City. It's not a strategy I pursue anymore due to scale. Feel free to PM me. Otherwise, join one of the many meetups that happen around town. Check meetup.com.

Well, as you've pointed out, the problem with residential property is that you don't have access to leverage. If you were looking at commercial property, the lending is entirely different. As I understand it, once you form a valid entity in the US, with an EIN and bank account, then you would have access to a commercial loan. Your other option, as I see it, is to find a money partner who is able to sign on a residential (conventional) loan here in the US. However, since you won't be signing on the loan, that mitigates most of the risk for you, which means your partner would have to have a very high level of trust in you. Or, perhaps you could bring all of the cash required to do the deal, your partner could sign on the loan, and then you could split the returns. That way you both have skin in the game.

My and my partners' time is worth way more than what we would save by going to the properties, picking up the change, and taking it to the bank, as well as having the machines serviced any time there's an issue. My property manager's time is also worth more than this, and so it's a net loss to pay them for this service instead of CCL. You guys are talking about saving a few dollars a month when it comes to a 2 - 4 unit property. Find your abundance mindset.

Mt. Auburn is historically a low income neighborhood, with a mix of some UC students as well. However, with the significant development happening in the area, it's in the path of progress. A well placed investment could do well here. This is neighborhood that you should consider block by block.