All Forum Posts by: Wendy Black

This question is aimed particularly at seasoned investors near or at retirement age or investors who also are certified financial planners:

Once you reach retirement age, what percentage of your portfolio reasonably should be in real estate vs. a traditional IRAs or other financial instruments?  Our investment strategy has been fairly conservative.  

Thank you.

Good one, Chris...

We live in AZ, but SoCal has been like our second home for decades, and that's where we bought a couple of rentals.  Before we decided to buy, I did a lot of research online about homes within our budget, and then we drove around those areas.  I next sought recommendations of a RE agent and totally lucked-out.  A stranger online recommended her.

From day one, the agent proved to be the right person for the job.  We were compatible both from a business and personal standpoint.  I'd send her listings, she'd send me listings, and we'd go through them on the phone or online.  Then she would visit our choices, take pictures, and give us a report about the pros and cons of each one. 

We visited the house in San Diego County before we bought it, but we toured it with her and the home inspector.  We carried the paperwork, too,  just in case it checked out.  It did.  However, we'd never even stepped foot into the OC condo before we bought it.  I'm not crazy about that property, but we've never had any problems with it, and both properties perform well.

While we'll invest long-distance, we feel most comfortable with properties just a few hours away in an area in which we're familiar.  I inherited properties in NorCal, but instead of being six hours away like the ones in the southern part of the state, these are 12 hours away, too far for us personally.

In our case, the only due diligence we did was check for the location of earthquake faults on the State of CA's hazard site.  We were not buying anywhere near a fault line.  

They've said on FB that they buy in bulk because they usually have dozens of flips going on simultaneously.  That cuts their costs tremendously, in terms of both goods and labor.  In addition, they also have their own company.

While I've never flipped, I think what is accurate is that you never know what's behind a wall, and you'll always go over budget.  

Everyone...please note the follow-up post.  He says you buy in at $60-$70k, substantially more than $25k.

I briefly spoke with him yesterday, and we'll be meeting with him next week.

He owns a remodeling firm that also does flips, and as I said, has very good clients' comments posted online.  He told me that he serves only a niche market, and I know the area.  Upscale, great shopping, lots of traffic.  The price point of those homes is fairly comparable to our properties in SoCal, but not the ones we'd be interested in buying here in AZ.  However, he doesn't want to work with more than a couple of investors on a project, and the buy-in is at $60k-70k for an $80k-$110k flip.  I said that maybe it wouldn't be a good match, but then he said he tried to pay investors 30% for a 5-6 mo. loan.  Clearly, we want to check him and his work thoroughly because that seems too good to be true.  It's not that I couldn't write him a check, but I wouldn't want to lose that much.  I did tell him that we were interested in learning about flipping, however.  I think it's one thing to spend that kind of money on a house that we could buy and over which we'd have control, but another to go into somebody else's deal.  However, I'd still consider it.  We'd looked into becoming accredited investors and crowdfunding projects with a $25k buy-in, but they wanted money for 5 years, and I don't know that we'd want to tie it up in a project over which we had no control.

What advice can you give to rental property owners who may give a small hard money loan ($25k?) to a fix & flipper?  It would be our first.

We met him at an REI. He's got excellent reviews online. He's done a number of fix & flips and remodeling jobs and has references. We would want to see his portfolio and follow up on recommendations, but we have no idea where to go from there. We would like to learn more about flipping and hard money lending from those who've been successful at it, but we're not sure it's for us.

Thank you.

I've gone through his online course twice, and it's free:

https://sso.usefedora.com/secure/1262/users/sign_up

Many of his strategies are the same as what I've heard by successful investors who've spoken to my local REIA groups. I can't vouch for how successful people are with them, however.

I continue to appreciate everyone's input because it's allowing me to flush out the pertinent issues in our case.   

We're retired, so what's important is cash flow.  We want investments that earn us more money than would interest offered by a bank, stocks, or a CD.  We need to decide the minimum limit of what would be acceptable for mobile homes.  We're not subsidizing the tenants because we didn't pay for any of this in the first place.

We have put the numbers on paper and continue to make a decent cash flow: over $800/mo. for three properties for which we haven't paid yet.  One of the tenants is the property manager.  We simply arrange for what needs to be done.  No difference from our other out-of-state PMs, except we arrange for the workers and supplies.  

However, I just found out that my husband--who handles these properties--has been considering expenses together, so that one property may have a lot of repairs and another property has few.  Clearly, that gives us an inaccurate picture because one of my issues is risk.  I don't want anyone hurt, and I clearly don't want to be held responsible if something's in bad shape.  I made the assumption that all of the homes were in the same condition because the exteriors are equally unattractive.  Before I write a check, I want to be able to estimate what each of them is worth and how long we can expect to make an acceptable cash flow before each of them goes south.  I look forward to looking at his new figures once he works them out.  

Hubby simply doesn't want to sell at this time.  Says it makes no financial sense yet.  

My bro had a condo in Stockton (and was head of the HOA), but he was an engineer and worked in SF. He did minor repairs himself, but from what I hear, he wasn't adept at them.

Good question how much my sis would pay me for these properties. The worth clearly will be in the 3 lots. We're having to deal with the sale of his condo right now, but in the meantime, we'll need to put these 3 properties into a new LLC. In case something happens, I don't want our other LLC's assets touched (including one in Oceanside, Bruce.)

BTW: Hubby, who held my bro's POA, said the mobile homes have liability only for $300k. The homes themselves aren't insured.