All Forum Posts by: Marshall Easlick

@John Leavelle I don't really have a special goal. I would like to get to 10 properties but I don't have a strict timeline.

You are correct on the buy and hold. By "new construction rental", I am just referring to the fact that I am buying brand new houses and renting them out, which I don't think will be very profitable because they are priced high compared to used homes in the area. This is the problem, really, it's not very profitable. Honestly, I think I have answered my own question just by creating the post. I'll need to move to older houses to be more profitable.

@Aaron Mazzrillo Thank you

I could use some advice and some more educated critical thinking that I can provide myself, if you please. I am approaching a dead end despite educating myself in real estate investing because I am ambitious and willing to accept risk but I know that my current investment strategy isn't fast enough for me and it's too costly.

I am in Wellington, Colorado (8,000 population with bare essential infrastructure), which is 15 minutes north of Fort Collins, Colorado (a city with 160,000+ population), which is an hour north of Denver, Colorado.

I am interested in buying and holding rental properties using a property management service because my work requires me to be out of state for weeks at a time and my availability is very low right now (If I could, I would be flipping houses because I love to be hands on with projects but I am making good money right now as an employee and I don't think I could make this much by flipping houses).

I have purchased two new construction houses so far and I am unsure of what my next investment should be. The rental market in Wellington, Colorado right now seems strong to me and I think it will only get better over the next twenty years (I think this will be the next Southern California). I say that it seems strong to me but when I quantify it, these houses are only renting for .6% of their purchase price. However, I am in it for the long haul and, at this rate, rents will increase tremendously over even the next 5 years. 

I bought my first one on Halloween 2014 with a 20% conventional loan and my second one a week ago with a VA loan. I was thinking of living in this house for a year (maybe more if needed), refinancing the VA into a conventional loan using equity and cash, and buying another house next year using the VA loan again. In order to do this, I am looking at an $8,000 VA loan fee and $2,500 in closing costs. With all miscellaneous costs associated with closing (and because I like to be conservative with my numbers), I am looking at spending roughly $12,000 in fees just to get a new construction rental property. I don't like the idea of fees and money going out the door like that when I could be using it toward a down payment and it would be equity. However, it might be better just to get as many rentals as possible right now and run a cash flow snowball to pay down one loan at a time. My two problems are: 1) this is too slow and, 2) giving money away sucks, that's why I bought a house in the first place. Any thoughts on a better strategy? I am sure that the answer is in education but, like I said, I have been educating myself for about 6 weeks in hopes that the dots would connect themselves once I read/listened enough but it just isn't clicking, so I am requesting some outside help. Anyone have a better idea?

That's just awesome! I'm happy for you. My closing was uneventful, which is always great. As I mentioned, it's new construction and the builder knows exactly what the market is and exactly what they can get away with, so the quality is lacking. However, I hope to be able to make it better with warranty work.

How did it go, Karl? Did you close?

@Wesley Jeanette side note: I don't know why sometimes the "@" function works and sometimes it doesn't but this was the best I could do.

In Wellington, unless you want to buy new construction, the inventory is very slim pickings. It's a small town to begin with and most of the people who have the decent older homes have lived in them for a long time and they aren't planning on selling.

Journey Homes is really going to town with their projects: Berthoud, Wellington, Severance, Windsor, and I think Johnstown right now. I know that they have built in Pierce, too, which is way out on the Hwy 85 cooridor. There is a builder called Hartford Homes in Wellington right now in addition to Journey. I looked at some of their models and they had OK floor plans but they hiked the price up by $20,000 over three weeks on me, so, obviously, I walked away from that.

Fort Collins is just ridiculous but I think I will try to buy there next.

Karl, I haven't checked anything else out yet because I was under contract on my current purchase before I found BiggerPockets, so I am a total newbie. I am waiting for this house to close and rebuild my capital before seriously considering another investment but I don't think my next one will be a single family home, and it certainly won't be new construction. People areally buying new construction homes out here before they are even holes in the ground and some of them are increasing in market value by $10,000 - $30,000 beforeally they are completed. Since I've begun educating myself with BiggerPockets, I've limited my investing potential by buying new construction because the money is made on the front end when purchasing.

Karl, boring pays the bills and leaves you with money left ovef at the end of the month to invest. I'm very boring and I am buying my first investment property. It won't be so boring when I am retired at 45.

I totally understand that. Personally, I don't like the Californian mindset but, as long as there are less Californians than California has, then Colorado will be more desirable to Californians looking to be a part of the exodus away from that place. These are obviously gross generalizations but it's the easiest way to talk about it. Honestly, this has been happening for generations and it's nothing new, so I don't take any of it personally.

I am a real estate investment newbie and I haven't actually read a single book specific to investing. However, the first financial book that I read was The Rishest Man in Babylon. It's one of those books that is written so well that it might change your life, depending on your current lifestyle. It was written in the 1920's but it is my favorite personal finance book and it is a short (about 170 pages), interested read in the form of fables.

@Karl B. I grew up in Ventura, California and I've ended up in Wellington, Colorado. What a great change! I originally moved from California to Casper, Wyoming (don't move to Casper) thinking that I would miss the beach but I grew up surfing in the Pacific and, once I moved away from the coast, I realized that I just didn't miss it like I thought I would. I found that the low density living and abundance of land made people behave differently toward each other (more humanely), which more than compensated for the lack of large bodies of water. I ended up in Wellington, which is located about an hour and a half north of Denver and 15 minutes north of Fort Collins and I love it here. This is a small town populated by about 8,000 people with massive, new residential construction going on right now and probably for the next 20 years- an excellent investment opportunity, as I see it. I bought one of these houses in late 2014 and it has increased in value from $222,000 to $290,000 in 2.5 years, so I'm buying another one on Monday for $300,000. I am renting my current house out for $1,700 per month, which will provide great cash flow. UPS plans to build a distribution center in the area, Google plans to build a headquarters near Denver, and there are dozens of new neighborhoods being built as I write this. I want to specify that I live in Wellington but I am talking generally about Northern Colorado. I wanted to provide some specific financials because they are important when considering an area as an investment opportunity but, more importantly, the people that I've encountered in Colorado are warm and friendly compared to the stereotypical Southern Californian. This reply turned out lengthier than expected but I hope it helps. Feel free to contact me if you want to.