All Forum Posts by: Matthew Terry

@Antonio Cucciniello

NOI - debt service. Assuming 20% down. What other valid definitions of cash flow are there?

If I had a $100K, is it reasonable to find a deal that will achieve $1000 a month in cash flow?

A portfolio of 4 $100K SFH home that produce $250 in cash flow?

A $400K multifamily that produces $1000 in cash flow?

What markets might currently have opportunities like this?

Greetings BP Mates,

I hope everyone is staying healthy and prosperous during these intense times.

I'm still a beginner in my investment journey (only 3 SFH) and it seems like the most accessible investments are turnkey providers who sell almost fully renovated properties and provide the management as well. Providers that find compelling deals with the opportunity to capture equity are largely tied to long-time customers, in my experience.

Considering there are 0% real yields on almost anything but REI and business investments and my personal view is that the stock market is at extreme risk of imploding, and the dollar is losing value, it only makes greater sense to store wealth in real estate.

However, it seems risky to do it in turnkey. To pay top dollar or higher for the property and base ROI in top market rents is a potential recipe for disaster during these uncertain times and for relatively small capitalized investors.

We have a very long 42 days until political reality is mandated. We don't know who will control the senate and therefore tax policies. We don't know when there will be more stimulus. We don't know if forbearance programs and eviction moratoriums will resume in January. We don't know how well vaccines will be distributed or even adopted.

Are you all disregarding these unknowns with potentially massive consequences to ROI over the next 2-4+ years and just being more careful? Are most people hoarding cash? Or do you not care what happens in the near to medium term, you just feel REI is the safest place to store wealth and 20+ years will eventually return good results? It would be great to hear from investors who use turnkey providers because of convenience\ease or the perception of less risk.

@Mike D'Arrigo

Thank you for your input. I understand that ill need to put in more effort and endure more risk to get the first right of refusal because ill need to find someone who is in growth mode and probably means less experience.

On the note of specifying criteria, I have that; 1500 sq ft or under, single story, at least 3 bedrooms, 10k sqft lot or under nothing built before 1960, etc. Is that what you mean about being specific or am I missing something?

@Rob Chance

I tried buying a property 23 minutes after the email was sent out , so I get it, believe me.

@Will Fraser

In my year+ of feverishly consuming podcasts, books, and forum posts on REI, I don't ever remember someone bringing up the possibility of a retainer. Is that really a thing? Have you experienced that?

I appreciate the candid feedback gentlemen, thank you. I hope all is well after that crazy storm.

Hello BP Mates,

I'm an investor from Phoenix looking for more residential investment properties in Oklahoma City, Memphis, Kansas City, Little Rock or other markets in those areas with similar opportunity.

It seems the trend of most companies that advertise on BP or are guests on REI podcasts are either turnkey or emailing inventory once a week that disappears in 30m. I'm not looking for either. I'd like a team that understands my needs and will offer first rite of refusal on a deal if it meets my criteria.

My focus is C, B class in the $130K and under SF or multi-plex residential that is slightly distressed and I can capture equity with small rehab. Section 8 preferred, but not manditory.

I work with an amazing team that acts as agent, PM, and rehab manager with excellent communication and systems in place, but only producing a property per month, if that. Ideally I'd like to find a similar company that focuses on investors but has a larger pipeline of deals (I understand the supply and pricing situation we are in)

Can anyone point me in the right direction?

@Account Closed

I think I heard this from R.K. in one of his books or podcasts and it is the philosophy I live by now. "What do I need to buy so I can afford to buy what I want"? For example, I acquired a property in Phoenix to fund my purchase of a vacation home up north to escape the heat.I'll buy another property to afford my tricked-out WRX STI in the future, and a third one so I can take a European vacation every year with my family.

I agree with your decision, but consider rewarding yourself again once you have more comfortable cash flow and there are more predictable signs of the direction of the economy and REI legeslature.

Investor here from Phoenix. 1% rule is a high-level filter assuming a 75-80% LTV if your strategy is to purchase cash-flow properties as opposed to appreciation properties. I live in Phoenix and the only investments I have are "live n' flips" where the property was my primary home for 2-3 years and then turn into a rental. Example: I have a 3/2 worth $320K and I'm getting $1800 a month for it. Pretty dismal 1% rule, but realize I bought it in 2015 for $210K. If you base it off the acquisition price, it gets pretty close to 1% which is very hard to find in the Phoenix metro area. I did a cash-out refi recently and used that money to buy a few properties in OKC that were 1.1% or so in the $90K price range. With the increased mortgage due to the cash-out, I'm only getting around $200 in cash flow from the Phoenix property, but I'm fine with that because I'm making $400 on the cash I took out. The $2400 a year is a risk cushion and won't be spent. It's the $18K per year (5-6%) in appreciation that really matters, as this will fund future 1% rule purchases in other markets by refinancing every 5 years (as the market permits) or 1031 exchange in 10-15 years.

I'm on a bunch of Phoenix wholesale lists and even distressed properties purchased at huge discounts can't produce 1% if you rehab correctly and then leverage 75%. Rent prices and property value prices just don't allow for that. Phoenix is much more of a flip market unless you get creative and do lease options and such.