All Forum Posts by: Leo R.

@Robert Gonzalez you need to get the scope video of the sewer main, which will show you where the sewer main is damaged (if it is damaged)...never pay for a sewer scope unless they provide the video!

As for your original question--the short answer is yes, it could be possible for a sewer main problem to cause one toilet to back up, but not the other.  

Why? Well, imagine the sewer main has a partial blockage, and imagine there is a lot of pipe (and thus a lot of sewage capacity) between toilet 1 and blockage in the sewer main--when you flush that toilet, it doesn't back up because there's plenty of pipe to hold the sewage (although, if you repeatedly flushed it, it might back up...and eventually, as the blockage in the sewer main gets worse in the future, it will probably eventually start backing up)...on the other hand, imagine that toilet 2 has minimal pipe between it and the sewer main's blockage (and thus, minimal sewage capacity), so when you flush it, the water almost immediately meets the blockage, causing that toilet to back up.

I'm not saying that's necessarily what's occurring at your property--but it's an example of how a blockage could cause one toilet to back up, but not another.

To determine whether the problem is indeed caused by a sewer main blockage, watch the scope video, and ask the sewer scope guy to show you where the blockage is on the video.

Hopefully that helps...

Good luck!

@Kwan Suh there's some excellent feedback in this thread that you can use to move on and succeed--in fact, I'd suggest reading this thread a few times, because there are some valuable lessons here...

Here's some more feedback and suggestions for moving forward:

1. Good job keeping it real. Good on you for being honest with yourself about screwing up, and being willing to share it with others (we all screw up, but few of us are real with ourselves or others about it). It takes guts and maturity to recognize your mistakes, admit them to others, and ask others for help. And importantly, being real with yourself and others is the best way to learn from your mistakes, and become a better, smarter, stronger real estate investor (plus, others get to learn from your experience).

2. Avoid C's and D's. As others have mentioned, OOS investing is difficult enough, but it's EXPONENTIALLY more difficult in a C or D area. One of the main reasons is that C and D areas attract problems and problematic people (as you discovered), and very few property managers will put in the significant amount of work it takes to correctly manage a D property, because it's simply not worth the small amount of money they get from the property. Managing a D property is like taking on the worst job in the world, and getting paid almost nothing for it--so, understandably, PMs usually do not put in the effort required for these types of properties. Because of this, I'd suggest considering ditching this property, and looking for A and B properties instead (the lower cashflow of an A or B is absolutely worth the significantly easier management).

3. Keep it local. OOS investing is challenging (even with A and B properties). It is exponentially easier to learn the basics of REI if it's a property in your area. Because of this, I'd suggest trying to start with properties in your own area.

4. get some property management experience.  Being a successful real estate investor usually requires understanding how to manage properties. Even if you have a PM, you still need to understand how to manage your properties--because you can't effectively manage your PM if you don't understand how to manage properties.  Think of it this way: a person can't manage a law firm unless they have legal experience.  A person can't coach a team to an NBA championship unless they have basketball experience. A person can't run a mechanic's shop without any mechanical experience ...and similarly, it's very difficult to manage a PM (or team of PMs) if you have no property management experience.  Because of this, if you want to be a successful real estate investor, I suggest starting off with a strategy that gives you property management experience (ideally, managing your own property).

5. Stick with a strategy that matches your experience level. You're a beginner, but you tried to start off with an advanced strategy. Instead, you should start off with a beginner-appropriate strategy.  OOS investing is known to be challenging, and OOS investing in C and D properties is known to be so challenging that even highly experienced real estate investors rarely attempt it (and the few who do often fail!). ...OOS C and D property investing is one of THE most challenging strategies, yet you tried it as a beginner!  That's like trying to ski a double black diamond run the first time you put on skis, or trying to surf a fifty-foot wave the first time you get on a surf board--it's gonna end in disaster! So, don't beat yourself up too much--even experienced investors often fail at what you tried to do...but also, make sure you learn this valuable lesson: stick with the REI strategies that are appropriate for your level of experience--if you're a beginner, use a beginner-appropriate strategy.  In particular, house hacking a single fam or small multifam is one of the best ways for people to get started in REI (and there are plenty of free resources available on this topic).  Get some house hacks under your belt (which will teach you how to manage properties--which, as I said, is critical), and then if you want, move up to some of the more advanced strategies.

6. Keep the loss in perspective, and wear the scar with pride. As others have mentioned, it is not possible to succeed in REI without some big failures, and those of us who have been in REI for a while have suffered losses way more than $15k! In fact, you're not really much of a real estate investor until you've survived a few $10k, $20k, and even $50k+ punches to the gut! As James Brown sang: ya gotta pay the cost to be the boss. So, welcome to the club of real estate investors. Although you took an L on this one, at least you know you did something that everyone *talks* about doing, but which very few people have the cojónes to actually do--buying a rental property. Plus, you have some lessons here that are probably significantly more valuable than the cash you lost! 

Good luck out there!

@Christopher Pearson let me re-frame what @Nicholas L. is saying: REIAs are an excellent opportunity to network, and therefore offer a great opportunity to find a coach.

RE: coaching: There are real estate coaching programs out there, but they tend to be wildly expensive (tens of thousands of dollars), and for most beginner investors, it’s very doubtful that it’s worth the cost.

If you’re looking for a mentor/coach, I suggest doing two things: 1) figure out what value you are going to bring to the coach (more on that below), and 2) clearly communicate that value to potential coaches.

No experienced investor will want to mentor/coach someone unless that person clearly demonstrates the value they’re bringing to the table. This is 100x more true if the person asking to be coached is relatively inexperienced (because inexperienced people take more time and effort to coach, and bring more risk).

The value the mentee brings might be in the form of coaching fees, investment capital, experience, access to deals, the ability to put in a lot of work, social media expertise, accounting expertise, marketing expertise, etc., etc., but they have to bring SOMETHING to the table--and they must be VERY clear about what that thing is, so potential mentors/coaches see a reason to partner with them.

Also—and very importantly—the value the mentee brings, has to be sufficiently valuable to the mentor (and if the mentor is a highly experienced and successful RE investor, they ain't gonna come cheap!) --this is because perceived "value" depends on a person's net worth. For instance, a thousand bucks holds totally different "value" to a poor person than it does to a millionaire. If you pay a “coach” who has no net worth a thousand bucks, you’ve just changed their life! …but, if you pay a coach who’s a multi-millionaire a thousand bucks, they couldn’t care less—a thousand bucks to them is pocket change, and they’ve got bigger fish to fry! Because of this, the more experienced the coach is, and the higher the net worth they have, the more value the mentee must bring to the table in order to make it worth the coach’s time.

This is exponentially more true for mentees with little/no experience--because successful RE investors know that "mentoring" a rookie is often code for "wasting my time trying to help someone who's constantly screwing up (because they're a beginner) and getting nothing in return". Why should a high net-worth, highly experienced investor put their time, money, experience, reputation, and resources on the line for someone with no experience? ...you'll have to answer that question if you want to create a partnership with anyone worth partnering with!

All too often, we see folks on the forums with little or no real estate experience who want to "partner" with a coach/mentor, but who have no idea how to make it worthwhile for the coach (and, not surprisingly, they never find a coach).

So, my suggestion is: if you’re looking for a coach/mentor, first and foremost, communicate what value you are going to bring to them (and it needs to be more specific than “I’ll pay”, because again—if the coach is a high net worth person who makes $1000/hour in their sleep, it’s probably going to take more than a small coaching fee to entice them). The first impression you want to make on potential coaches is clearly and convincingly showing the value you're going to bring to them--so they have a reason to work with you.

Good luck out there!

@Kyle Curtin congrats on surviving year 1!  I can say that after many years, many deals, many successes, and many failures, the learning never stops (though, it tends to become a bit less stressful as you gain experience and wealth).

At the end of most BP podcasts, they ask the guest "what separates successful RE investors from those who fail, give up, or never get started?", and one of the most common answers is "persistence"  --the ability to bounce back time and time and time again after learning lessons the hard way.

Failures are all but inevitable in REI--but, as long as you're learning from those failures and using them to become a better investor, you're on the right path.

Good luck out there!

@Timothy Davis if you're a beginner, I'd suggest starting with a simpler strategy that has a higher likelihood of success (such as house hacking a single fam or small multifam property), and then--once you have that experience under your belt--move up to apartment buildings. Apartment buildings are a more advanced (and often higher-stakes) strategy than single fam/small multi-fam, so it's a good idea to get some REI experience before jumping into apartments.

Not only will the experience of operating a smaller property be absolutely critical in helping you eventually manage a larger property, but that experience will also make you more attractive to potential investors or partners--if you decide to go down that road.

...and, as others have mentioned, study up on all the resources (podcasts, articles, youtube videos, etc.) related to whatever investing strategy you're pursuing, and start attending your local REIA meetings. Also, find an experienced investor-friendly agent and mortgage broker--they will be crucial team members, so it's important to find the right ones (there are articles/forum posts, etc. on how to find a good investor-friendly agent & mortgage broker--so it's a good idea to study up on those topics)

Good luck out there!

@Benjamin Furney I don't necessarily have an exact answer for you, but here are some considerations:

First, whether people prefer LVP or carpet in a bedroom may depend on the quality of the LVP, and whether it's a style of LVP that fits a bedroom...some LVP is a stye that looks fine in a kitchen or bathroom, but it would look weird in a bedroom--the style has to look "normal" for a bedroom, and can't seem like it was made for some other area. Also, I think the lower the quality the LVP, the higher the chance it will look out of place in a bedroom--low quality LVP makes me think of mud rooms / utility spaces, and that's the LAST thing you want to bring to mind for a bedroom.

On the other hand, a really high quality LVP in a style that's appropriate for a bedroom might be preferred over carpet. Many tenants would prefer hardwood in a bedroom over carpet, so if it's really high quality LVP that reminds tenants of hardwood, they might like that...

Second; tenants' expectations probably play a role, and I think most tenants are more used to seeing carpet in bedrooms. Chances are, most previous places a tenant rented had carpeted bedrooms, so an LVP bedroom might be off-putting to those tenants (esp. if the style of the LVP isn't appropriate, or if it's low quality LVP)

Lastly (and probably obviously) LVP will be less maintenance headache for you than carpet, and it will probably last longer than carpet.

Good luck out there!

@Aberham S. Dadi if I bought OOS, I'd still want to go to the area and experience the city & neighborhood, and see the properties for myself...I know a lot of OOS investors don't do that, which, to me, is a failure of due diligence in most circumstances...it's one thing if you have a team of boots on the ground who are highly competent, and who have proven themselves across dozens of prior deals in that city--in that case, I might take their word for certain things... 

But, most OOS investors don't have a team like that.  ...and we regularly see folks on the forums asking how to salvage a trainwreck property (e.g.; non-paying tenants, MIA PM, crime, etc.), and when asked why they bought the property, 90% of the time, they say they're an inexperienced OOS investor who bought the property without visiting the area or the property, and it turned out to be a lipsticked pig in a D neighborhood...they trusted the data (the "incredible" cashflow data of D neighborhoods), they trusted the pictures of new finishes (and fell victim to shiny object syndrome), and they trusted someone else's (agent, PM, turnkey co, etc.) opinion that the property was a "deal", but they didn't take the personal responsibility of checking out the city and the property for themselves.  

Proper, and thorough due diligence is one of THE most important parts of REI--yet, it's something that many people don't do, or they blindly trust that others will do it for them--which is often a recipe for disaster.

@Aberham S. Dadi for a bit of background, I'm a RE investor, and I have a long background in doctoral-level statistics and data analysis.

Here's the issue from my perspective: most data that's relevant to REI (e.g.; employment trends, appreciation/depreciation history, housing supply, etc.) is relatively macro (it often covers at least an entire metro area), but real estate is hyper local.  For instance, the appreciation potential / depreciation risk, tenant demand, neighborhood quality, etc. can all vary dramatically within a single metro area. As an extreme example, consider how Hollywood is a different universe from skid row--even though they're both in the same metro area! 

Another example: during the recession, there were some metro areas that depreciated significantly, but within those metro areas were certain neighborhoods (often the A neighborhoods) that didn't depreciate at all--or that even appreciated.

So, the macro data you typically encounter can be useful, but it often doesn't tell the whole story.

To be a successful real estate investor, I need to understand my city like the back of my hand--with significantly more precision than what macro data would convey.  For instance, I know exactly what types of tenants (ages, occupations, income levels, even political affiliations) are attracted to various neighborhoods within my city--and I know exactly what types of properties those tenants will (and won't) want to rent. ...most macro data doesn't show you that level of detail.

...and that's just market-level data. MOST of my REI decisions (decisions to buy or sell a property, for instance) are governed by specific characteristics of the property itself. For instance, I sometimes look to buy properties that have a "weird" floorplan that turn other buyers off, but which I know I can easily fix to force appreciation and/or rent--that might be THE deciding factor in whether I buy the property, but there isn't ANY data representing that factor!

There's just so much fundamentally important info about REI that most data don't convey (Zillow discovered this the hard way, when they tried and failed to invest in real estate based largely on data inputs, rather than boots-on-the-ground knowledge).

Real estate is literally a physical item, with physical functions, governed by physical realities, and because of that, it can only be fully understood through physical means (seeing properties with your own eyes, experiencing neighborhoods in person, meeting potential tenants face-to-face...or at least on Zoom). Similar to how we can't convey the beauty of a sunset with data, and we can't (yet) convey many of the most important idiosyncrasies of real estate with data...le sigh.

Now, does that mean we shouldn't pay attention to data? Definitely not--the data can provide invaluable context and enhance our understanding of the market, and I study macro data consistently.  Plus, there are many ways to research local markets, and I regularly collect my OWN, more fine-grained data (e.g.; number of responses to an ad for a rental in neighborhood A versus neighborhood B, etc.)   ...BUT I know the data isn't going to provide me with a full understanding of the local markets, or the existing and potential value of a property. To get that, I need to experience the market and the property for myself (which, in my opinion, is the best part of real estate investing!)

Good luck out there!

@Megan Ratigan when I was first starting, I did some of the things you mentioned (I consumed a lot of REI-related content and studied up as much as I could...to this day, I continue to consume a lot of REI content like podcasts, youtube videos, the occasional book, articles, etc.).

Also, I surrounded myself with people who were doing what I was trying to do (e.g.; house hacking, BRRR'ing, multifam properties, etc.), and I learned a lot from them.

I'd suggest attending local REIA meetings, and keeping an eye out for folks who can teach you (while also being very thoughtful of how you will bring value to them--because a decent mentor will only continue to mentor you if you're bringing something to the table!). You can also find people just by word of mouth--ask around, and find out who's involved in real estate in your area...nearly everyone has a family member who's a real estate investor, or a friend who's an agent, or a co-worker who flipped a house, etc.--these are all people you can potentially learn from....but again, it's important to be very clear on what value you're bringing to the table, because good mentorship ain't cheap.

And, obviously, you can also get a lot of feedback just by posting your questions up here on the forums.

Lastly, I'd say try to focus your learning efforts on the specific real estate investment strategy that you're pursuing...for instance, if you're planning to do a house hack (the best strategy for beginners, IMO), then try to focus on studying house hacking specifically--and don't waste your time studying up on syndication, STRs, or other strategies that don't relate to house hacking.

Good luck out there!

I don't know anything about this particular program, but $2k per year probably isn't enough to break the bank for most people...but, I'd also wonder how good the service can be for $2k per year, and I'm wondering what that $2k gets you? ...Personally, I'd probably want to be able to do a trial period for less money before shelling out $2k for something like that...

As others have mentioned--be skeptical, and do a lot of your own research before committing...

There are people out there who can mentor you in exchange for value that you bring to them (such as finding them deals, etc.)--sometimes this can result in pretty great partnerships. When I was first starting out, my agent (who has a ton of REI experience) was my main mentor--I wasn't paying him directly, but I was buying houses with him regularly--which made it worth his time to talk with me far more than he would with a typical client...after years of working together, we've mutually benefitted and learned a lot from each other, and these days we often have multi-hour long conversations about REI that are really useful to both of us...

Good luck out there!