All Forum Posts by: Lee Ripma

You can get 100k properties in Yucca Valley, Joshua Tree, and Twentynine Palms. You also can in California Valley and perhaps Bakersfield. I do value-add investing remotely but it takes a lot of my time and wouldn’t recommend it as a “hands off” approach.

You’re buying TK properties at 75 LTV. That means you’re getting a loan for 75% of the value (or sale price) of the home. You can do a cash out refinance when there is equity in the home beyond 75 LTV. So in order to do a cash out refi you’re going to need to value of the home to go up, either through appreciation or through improvements. In most places where TK operators are selling there is not appreciation like what you see in CA. Improvements cost money. So what you’re doing by putting 25% down on those properties is trading the 25% down for the cash flow you’re getting. You don’t have a way to do a cash-out refi unless you add value. That’s why some people prefer to do value add or BRRR investing instead of buying TK. There is nothing wrong with your strategy, it just requires putting down 25% a lot of times. So if capital is a lacking factor you’re going to be limited in growing your portfolio. I hope that makes sense and good luck to you!

I had a terrible time using residential banks giving me an appraised value of just what I paid for the property despite all the improvements. I got a commercial loan. They do the value based on cap rate or gross rent multiplier and they don’t have the 6 month requirement. You’re looking for banks that don’t sell off to Fannie/Freddie and hold the note. You can get a commercial or portfolio loan, the rate will be higher and the am shorter but a lot easier to deal with when you’ve added value (in my experience).

I’m self managing my properties right now in order to put systems in place that will allow me to delegate all aspects of the property management. So I think of it as starting a PM business that I’m going to scale up. I’m reading Brandon’s book now and am self managing using tenantcloud. It’s not perfect but it allows you to collect rent for free and communicate with your tenants. It also allows you to have tenants submit maintenance requests with pictures and assign them out to your team. I do screening using Smartmove (35, paid by tebant). Unfortunately tenantcloud doesn’t yet have this built in. Smartmove does background check, credit check, and looks for evictions. I also have folks give me the info on their job, talk with their boss, and talk with personal references. My property could support PM but I fired the company I was using since they were doing a terrible job! That inspired me to build my own small team to manage and maybe one day I’ll take that system to scale and start managing other peoples properties with my team. Good luck!

Krystle Padilla I’m glad you’re taking advantage of that market! I think Twentynine Palms is a great choice for apartments. I totally agree-the prices are even less than many Midwest markets with a solid demand. Good luck with your ventures there I think you’re smart to scale up there!

I think that if you want cash flow within driving distance think about Yucca Valley and Twentynine Palms. For 300k you can get a multi-unit. Twentynine Palms is military rentals with some potential for Joshua Tree park employees. Yucca Valley is affordable housing in the Palm Springs area. You could also think about Big Bear.

@Adam Stroik

I'm in favor of getting that capital working, either through a refi or a HELOC. If a HELOC is hard and costly then a refi may be better. It's always hard to say what is best since there is only the best thing for you based on your goals. However, I'm in favor of using cash/equity to get a higher ROI than having it sitting in a property. As they say, the return on equity sitting in a property is 0%. But sometimes folks have legitimate reasons for letting that equity sit. Good luck!

If I had that asset I would take out a HELOC to buy value add MF rental properties in a cash flow market. Then I'd raise the value of the property, get the HELOC back through a commercial cash out refi and do it again and again. I wouldn't think about the cash flow on the SD property, rather I would think about that kind of cash flow I could create with the equity. But that's just what I would do!

I think it's a great idea. My business partner is an attorney and a realtor (in San Diego) and he thinks of a whole lot that other attorneys and brokers/agents would miss. So I'm a fan. I don't like going to two different experts and then explaining to one why the other one thinks x.

I think you can wholesale anywhere there is demand. In terms of best, I think it's more about best for you. Is there a market where you have a competitive advantage? Boots on the ground to go to seller meetings?