All Forum Posts by: Matt Higgins

Dow is down 1000, 10 year is falling off a cliff, but people are still paying rent!

I do worry that this virus is going to bring the global economy to a significant slowdown, but will this hurt real estate?

My thought is inventory is tight and rates are gowing lower. I see US real estate getting a bump as stocks tumble this summer. What say you??

@Douglas Vogel

We (my wife and I) are exclusively in Minnesota.  Working the tertiary, value adds, to the best of our ability.  There are deals in Minnesota.  I’m not sure if it’s any better than anywhere else, but I got a 14 unit under contract this week for 340k and 30 year financing. It’s an hour outside of the metro in a growing market.  Shoutout @John Woodrich

PM me if you want.  I have an assumable non recourse deal that may interest you.  My company would like to manage it  

@Tanner Stringfellow depends on the market. What worked 7 years ago (buying prime metro real estate) isn’t working for us today. I’ve always liked small plexes in small towns to get started. Now we are on to small apartments in small towns.

Ya it’s sounds like you’ve had some bad management companies.  10% is more than what we are getting here, and you are right that the add on fees in the contract are the most important things to look for.  Another option would be to find someone to work on an hourly basis and help you out when it gets to that point.  Go show a property, clean outs, etc.

12 years till the good life!  I’m excited for you!

I went out and got a case of bottled water and put it in the trunk.  By the time I found a homeless person I opened the trunk and the water was frozen.  

Damnit Minnesota, poor guy had to settle for a half eaten McDouble:) 

I enjoyed the show 

@John Morgan are you raising rents annually on your tenants and keeping them on current leases?  I love to buy deals from people who self manage and never raise the rent because, “they have good tenants that never have a problem”. 

50$ a month annual rent raises are not uncommon for us.  50x12x10 is $6000 a year times x 13 years is $78000.  If you’re not continually pushing rents to keep up with your rising expenses property management is cheap. 

Don’t get me wrong I love what you're doing and your model.  I would just encourage you to consider 3rd party management.  If you like doing it great, but make sure you run it like a business. There is a lot that goes into  property management (I’m bias) and I think you would look better to the bank if you had a business that relied on something more than just you and your hard work.  We are buying an apartment now out of foreclosure from a bank.   The former owners wife still lives there even though she lost the property to the bank after the husband was injured in an accident and became paralyzed.  The bank got the property back and now I have to tell his wife that the rent is going up significantly.  

Thanks @Maria Burks. I appreciate you reading my blog! I didn't brrr, I wasn't that sophisticated at the time. I worked all the time to pay cash, then save 20% buy a house, repeat. I fixed them up with my own money. Then I opened a couple lines of credits and started flipping houses using that money. I do like the BRRR model and have done a couple since. The ones that I did BRRR were off market, slam dunk deals. I also have a lender in Minnesota that will take 10% down on sfh rentals. I've found that the community banks can usually structure deals to do whatever it is you're trying to do. If I BRRR a deal it's going to be to get into a 30 year fixed mortgage, but it would probably be faster to build your portfolio with a community bank that believes in you and your plan.

Enjoy sunny California, -10 here yesterday, but the real estate market is hot!  

@John Morgan

not a bad strategy if you don’t need the money. Although, Cap X and vacancy can really ruin that 200$ a month cash flow. It would take you 3 years to pay for a roof or one month of vacancy would knock out a year of cash flow. I started by paying for my sfr rentals with cash, then I went to 15 year fixed on townhomes, and now we just do multi-family value adds borrowing money on the longest term possible. It’s the evolution of a real estate investor. I would argue that your strategy may be riskier than someone with more leverage and more cash flow, but I understand what you’re doing and why you’re doing it. I have an unrelated business and don’t live off my real estate, but I have a hard time putting 40k down and getting 150$ a month back. In multi family value add I can put down 75k and get back thousands a month with leverage. To each his own and we all have different goals. I would just keep an open mind

Self managing is easy? Come on...... those of us who have done it know that at any kind of scale it isn’t. 20 houses = 20 water bills. I managed my own to about 15 properties and I did a bad job. Thank god i got some help and spent my energy finding the right people and system.

I have a condo I bought for 17k in 2010.  Now it’s worth 70k and I’ve collected over 100k in rent over the last 10 years.  Glad I didn’t sell in year two to make 20k 

not bragging, just saying......good luck Tyler! 

@Tom Shallcross

Correct I guess yearly payments would be about 3600. 40% annual return? Sounds like a pretty low risk deal. Definitely wouldn’t sell to pay taxes on a 25k gain. It’s sure not easy to find another deal like that.