All Forum Posts by: Michael Haynes

@Phil Bach, Hello, The foreign money from China, England, Russia and Brazil that has been buying up all the high end real estate in major cities around the world has been driving those prices sky high as the investors try to protect assets and launder money. That has been noticed in places like Canada and they started to charge something like a 10% tax on this imported money if you want to use it to buy their real estate. Same thing with other hard assets like Gold, paintings, antique cars, jewels etc. When the Banksters lower the interest rates to zero or like in Europe, negative interest, people with money have to scramble to save their assets somewhere else and try to make money. In Tampa we see this huge wave of building since the 2008 Crash. Harry Dent has talked about this for years and his take is that the last real estate values to fail are going to be the high end properties in the biggest cities. The Bubble is created and when it bursts, it collapses the prices all at once, as far as Historical charts will show you.

@Emily Reynolds, Hello, Waylon Gates sounds right on. I would add that you have to send your offer in writing. Why? Because someone like me who has properties for sale, will put that letter in the file for that property and maybe six months later I will give you a call and make a counter or accept your offer. I get letters every day from BP members in Tampa, the same type of "I want to buy your property for CASH..." I get letters like that from out of State companies. If you call the number that they list, they usually have a secretary who answers and wants you to give details of the property so they can get back with you. They never know what property you are talking about. Total waste of my time to call on those form letters offering to buy my property for CASH. The other thing that was described with the question of why the Banksters won't budge on the Price of their REO's in a Strong Market? Because the Prices are still going up. Our JOB is to be able to recognize what part of the Real Estate Cycle we are in and learn that when the Market is or could be topping out, you need to Hold them or Fold them and wait for a better opportunity. I am selling and limiting myself to buying one property at a time, at a big discount, because I think we are overpriced here in Tampa and I am not in my Accumulation stage of life. The % below Market Value depends on your ability to do a good Search for one that you can get at a Discount. It's the same thing with a Stock. You can do the research and buy the Stock or house at what you think is a Discount . Then, You are taking the Risk that the bottom Support in the Market, Stock or Real Estate, will hold out. Otherwise, the short term fix up and flip or holding period for the expected run up on that Stock, doesn't occur and you are now Stuck with a Buy and Hold Rental or Stock, for a longer period when you can at least break even with your, now, Investment. My lawyer who lives in a big new home, one block South of Gandy Blvd. has just sold three fixer uppers near the AFBase, that he rented for a time and bought two more houses to rehab and rent. An agent told me that on the East side of Dale Mabry, where my lawyer is living, that a tear down lot is now going for $175K and the Builders cannot make a big enough profit with those. As a comparison with how crazy it is, there is a lot near Gandy and West Shore asking $700K and they are tearing down perfectly beautiful houses on Davis Island for $650K to build $1.5million + dollar homes. At this time I would Sell two of my rental houses in order to Buy my friends two houses, on the lot next door, in a bad neighborhood, because I can get them for $30K under Retail, after a new roof and electric.

@Adam Ulery, Hello, I am learning something this time about how to find the intimate credit history of a 29 year old prospective renter. It's too bad that we can't just get a First, Last and Deposit rent, like in the old days. That way all you had to know is how long they had the same JOB, which these days is not such a good indicator. I have a brother, with a Business and Finance Masters Degree, who can only find Temp work in California at $70 an hour, but, he never has the position for more than six months. The tenants I have to deal with in Tampa, are all struggling since the 2008 Crash. Things have gotten a little better, but, none of them make $20 an hour. Some have two JOB's. Lots of them are on SSI for different injuries, which is where the rent check comes from. The First, Last and Security would solve a lot of the problems, but, with a $1000 a month for rent, that would mean that the prospective tenant has to have $3000 up front, plus the deposits for Light, Water, Cable and their Phone. I don't know any of my tenants that has $1000 saved, much less four or five thousand. The last two years everyone has complained that during the summer heat, the AC runs the Electric bill up to $350 a month. My girlfriend works for the County and they predicted a few years ago that the Utility costs would go up 20% a year. Does that mean that in five years or so, the tenants would be looking at $700 a month Light bills? Wages have been stagnant for 18 years. I was a welder 35 years ago at $10 an hour. A few years ago I called over to Tampa Shipyard when they started getting some work again and they offered me $13 an hour to weld. Florida is a Right to Work State. My brother is a Union Electrician in San Jose, California. He is a working manager at $55 an hour. He called the Hall  in Tampa and they offered him $13 an hour to transfer out here. I have had rentals in S. Tampa for 30 years and I always saw that the guys who could afford a house or apartment for more than $1000 a month, were the ones that would be looking to Buy a house if they were planning to stay in Tampa. For me to move up to bigger or better houses would never work, because those houses would not pay themselves. That's why we think multi-family duplexes. When my tenants have a problem with paying the bills, the first thing they stop paying is the rent. They will try to keep the lights and water going if I will let them make partial payments on the rent. The excuses are endless. If you let them get to the end of the month without paying, you are behind the eight ball for sure. One month late on the rent and no one in Tampa can catch up. You have to be strict with the rules. Rent is due on the First and Late on the Sixth. You can only give them the Three Day Notice on or after the Sixth and don't delay. When you post a Three Day Notice, take a photo of it or have a Witness sign it. If the tenant writes a complaint letter, the Liberal Judges from a few years back have started to order Mediation and give the deadbeat tenant another free month or two or three and say that you didn't post the Notice. As far as I can see, we have almost lost all property rights in the US as the Government gives all the rights to the Criminals and the Tenants and treats the Landord/Owner like crap in Court. If you don't have three months rents saved in the event that you have a problem tenant and have to Evict, your not going to make it. We used to be able to Evict a tenant in 9 working days in Tampa when I started renting 30 years ago. Now, you are lucky to get them out in the second month. Even the Sheriff's office ladies say that they have five working days to file the Order and the Server can take two weeks to Post the Eviction. Everything that I see since the 2008 Crash, has been going in the wrong direction for Owners of Real Property in the US. I am selling right now and only going to keep my Residence and one Rental into move to after I live in my Home for two years or more and sell it. In my retirement I am concentrating on making Daily Cash Flow and not Creating Wealth with Buy and Hold rental properties. You can do all the Smartmove researching and just like with a Stock, one bad Economic news event or like Hurricane Mathew could take a left turn and we have 160 mph winds running up the length of Florida and all the fly by night Home Owners Insurance companies declare Bankruptcy and no one gets paid for damages.

@Rita Koroll, Hello, do you start with a rental or try to fix up a house to flip? Does anyone have any sense out there? You start at the beginning. Pay off all your Debt. Study all you can about making money with Real Estate. There are the FliporFlop and FlippingVegas type shows on TV. The LA and NY real estate agent shows with high end property sales. There are youtube videos on all aspects of making money with RE. Save a pot of MONEY. Do you own your own home? Why not? Start there. First Time Home Buyers can get big discounts when buying a HOME. You need a home to live in. That is the safest place to start. If you have 20% down you don't have to pay Mortgage Insurance and save $100 a month. You can do like the commercial and see what loan you qualify for with Quicken Loans in your PJ's. Look at the 15 Year, 2.75% ones. How much would your PITI be and include "unforseeables." You can Homestead for a Property Tax break in Florida. If you do your Due Diligence, you can find a nice home in Palm Harbor to fix up and get it at a discount. Make it worth more with your Sweat Equity or find a Handyman who does a lot of the work to learn how to deal with the help. In RE they say, "Location, Location," but, you really don't get the main idea and I don't think most agents do either. In Palm Harbor you have the opportunity to buy a home with a View and not just a house, next to a house, with another house in front. Street noise matters. Not in the flight path to the airport. Corner lots pay more property tax, etc. Live in your home for two years and you can "flip" it, without having to put up with tenants, tax-free because of the Residential Sale Rule. Then, do it again. The add on is when you are living in your Home, you can buy a Rental and learn how to deal with Tenants. I would suggest that you never buy a house that you would not live in. You can have this as your Basic Real Estate Portfolio and learn how to make money with other things like be an Agent or trade Futures.

@Kyle Murphy, Hello, the reality from the bottom of the well, is that you can get a JOB and save some money and then start to buy rentals, but, at some point you run out of down payment money and have to learn how to Creatively Finance to buy more rentals in order to make it a Business, you have to have more than just one or follow the rotating Sale of your Residence Plan that I have outlined. This means that you have to learn how to use Other People's Money and using Hard Money is a bad idea for a long term Buy and Hold property. Just buying one multi-family rental is not going to make anybody rich and the Monthly Cash Flow is miniscule compared to other ways to make money with money. I see how the acquisition of a portfolio of good rental properties can be an attractive alternative to learning how to make money with Stocks. But, it is a lot of work and I would not recommend being an Absentee Owner. The farther away that you live from your rentals, the more it costs you to get there and take care of all the problems that will occur. You can try and calculate how many rentals you would have to acquire in order to replace your Monthly Earnings. Say that you take home $3000 a month for a start. How many rentals that produce positive Monthly Income do you have to acquire to replace this amount and do you have the down payment funds to buy that many rentals? I am not talking about the Pros who are able to buy many rentals in each State and somehow keep them going without losing their shirts in the Downtrends. The other way to Plan this for the guy just starting out is to find a way to buy five rentals that produce positive enough Monthly rents. Then, buy another five and hold them for ten years. Then, take the worst five and fix them up to sell. Take that money which could be quite a lot if you had low interest, 15 year mortgages and fix up the last five rentals which should be worth a million dollars and make you $3000 positive Monthly rents. After that its a numbers game, like raising cattle or planting an orange grove. The positive rents give you a way to finance with Other People's Money, more and more rentals. I have a friend who has acquired 90 trailers. Some are lots with a single or double wide trailer and he has a few small trailer parks. You have to learn how to use Leverage and the bigger you are the harder you can fall. I had eight duplexes and houses and met my girlfriend at our investment Club. We used her Credit to buy two more properties that were producing at least a few hundred in positive Cash Flow each month and one home for her to retire with later on. I currently have two residential houses, one is in S. Tampa near the AFBase and I may have a buyer for that. I also have a half acre on a corner zoned CG with a 2/1 rented for $1000 a month. It is almost on the main highway and a few blocks from the AFBase. An agent called me today and she has two clients who need a place to build a small factory. If I get my price, I can clear more than $100K for another ten year hold and use it as a 1031 Exchange to buy my friends two houses on one lot next to the I275 Highway, where I am rehabbing my other house. I can clear $500 a month in positive rents from those two houses and delay paying taxes on the sale of the commercial property, to live in the front house later on for 2 years and then sell, tax-free as my Residence...and do it again. My friend is rehabbing them at the moment and if we keep our original agreement for the sale, I can buy them with as much as a $50,000 discount to the retail value after I do a little more work on them. The thing about S. Tampa is that the East side of Dale Mabry Hwy. was the target for tear down and build out from Kennedy Blvd. down to the Base. Because the values have gone up to $175K for a simple house on a normal lot to tear down to build the 2 story homes with garages that everybody wants near the Base, the builders are now building on the West side of Dale Mabry. That makes my house and commercial property on the West side, worth a lot more. So, the time is right to sell. You also asked about N. Tampa and the question is how far North? On the East or West side of I275? Over by Carrollwood or out by Lutz? The houses and duplexes I have targeted in S. Tampa were all renting for $1000 or less per house or apartment. There are a lot of small houses in North Tampa, but, there are also a lot of newer homes that don't work for good rentals. My Plan from here is to end up with one Residence and one Rental and get back to my houses in Brazil to fix them up to sell, one at a time and move to the North of Brazil where it is desert like with two seasons. Wet and Dry or Spring and Summer. I trade Futures online and the most important thing for my Residence is to have a fast internet connection for my Daily Cash Flow from my trading. Much easier than being a Landlord. 

@Ralph C. and Jay Hinrichs, Hello there. Thanks guys. Someone seems to see my point about how to buy a rental property with a profit up front that actually makes you at least $100 a month in positive income. I have been a hands on Landlord who built his own rentals in Brazil while I was buying duplexes here in S. Tampa for 30 years. Jay, the last house I grew up in was a block off of University Ave. on the corner of W. Crescent, near where the overpass went to East Palo Alto, the most dangerous area in Palo Alto. You were buying East PA when I was living on a yacht in the Virgin Islands and still looking for a better place to live. I left PA during the Vietnam War. I freaked out and just started hitch hiking around the world for a few years. I fault parents and school councelors for not being able to give the children real Life Path Guidance because they do not know, themselves! I had the money and the desire to get into a business when I was 19 and I could have been in real estate investing when I was just out of High School. I could have had it made if there had been some adult who knew what the Path to Success is. I micro-scalp Futures and we say that you need to find a chart and a way to trade it, that matches your Personality. Same thing with Real Estate investing. A lot of it has to do with the Time Frame to hold. You need to be able to see the Big Picture and list of the consequences. The reality that Sales is where the Money is at and all the different ways to make Money with RE. Another reality in Trading Futures is why would you listen to anyone who does not already have a million dollars on his own? The most amount of millionaires in the US, have made their million with Real Estate. But, that does not mean that they worked for it. A majority of these millionaires inherited their Old Money. The best way to learn how to make Money is to find a Mentor who will take the time to outline your Path to Success and be available to prompt you on the way. Jay, I'll bet you could take a Newbie who is willing and able to work at it and show them The Way and make it relatively easy for them to get there, because you have, "been there and done that!" My original RE Agent, Bill Davidson, found me my duplexes from the MLS by noticing that they were all mis-advertised. The Listing stated that there were two Duplexes or a Duplex and a House on that property, but, the picture only showed One Building and apparently, everyone ignored it. My Offer was accepted and I financed two of them by the owner at 9% with $10,000 down because No Money Down Deals were too hard to find and work out. I made my money to buy the 8 properties in my rental portfolio, while I was working on the oil tankers because I studied how to make Money with Mutual Funds and the Market Cycle was in an Uptrend. I made $100,000 in ten years and bought my rentals, at discounts with owner financing, at going rates and later refied. It's the 2008 Crash that kept me from making double the money with the long term Buy and Hold, but, I had a cushion when I bought the properties at a discount. I also made out with my Monthly Cash Flow from the rents. Right now I am fixing up a 3/1 that I have near the AFBase in S. Tampa with parts that I took out of the two houses downtown that we just sold. I hope to sell it next week to a lady who grew up in that area and I will make around $30,000 for a ten year holding period. It produced more than $300 a month in positive rents during this whole time. And it will be tax-free profit because I get to use my Deductions that have accumulated since the 2008 Crash. "That's the way to do it...money for nothing and your girls for free."

@Kyle Murphy, Hello again, I am saying that I have had rentals in S. Tampa, Florida for 30 years along with a farm and rentals that I built in Rio de Janeiro, Brazil. When you say that you have run the numbers and you can cash flow $800-$1200 for each apartment in a Duplex here in Tampa, do you mean that this is Gross Rents per unit? I can agree with the low number, but, not the high one, even in the Palma Ceia area where I had to Duplexes that I had to Short Sell after the 2008 Economic Collapse. The main question is, "What is your Net?" My point is that each apartment will probably not make you $100 a month, Net Rents. You are talking about buying Retail. I rented the Duplexes for 20 years and at the end, per apartment, the 2/1, 700 sq. foot apartments, with off street parking and side yards, Central AC, all fixed up, etc. were rented for $800 each. We didn't build a lot of duplex or triplexes in S. Tampa because houses after WWII was targeted towards the Military families from the MacDill AFBase. I bought 3 of them when I started 30 years ago. For that reason I got my girlfriend to buy a property with two 1920 farm houses near downtown to have a multi-family rental that gave us around $200 per house, per month in Net Rents, that I personally managed. We just sold that property for $110,000 Profit after holding it for 10 years. My half of the profit is tax-free because I have accumulated $260,000 worth of Deductions since the 2008 Crash. We have paid off all of our Debt and now can get on to the next Deal. We could have sold for more in 2008, but, our tax situation at that time did not make us as much profit. I do not think, going forward, that you can expect that kind of Appreciation for long term rental property. After the Crash things got really crazy here. Tampa did not build 4 bedroom homes. We are a town trying to be a city. I own another house in a bad area next to the I275 Hwy. I am negotiating with my friend to buy his two old houses next door, in order to have another multi-family rental. The front, 1200 sq. foot, 3/1 front house can rent for $1200 and the 2/1 back house can rent for $900. Both have their own driveways with off street parking, fenced in back and side yards, Central AC, W/D hookups, extra storage, all fixed up. The problem is the highway noise from I275. I can personally manage them and make around $500 Net Rents per month. My Profit, up front, at the current price with my friend, could be $50,000. My house next door is a break even deal at the moment. After a months work to raise the rent, change the Home Owners Insurance company, get an Appraisal and maybe pay down a little on the mortgage to remove the Mortgage Insurance, I should be able to show up to $300 a month Net Rent. But, I continue to be the Landlord and do most of the repairs or the Sweat Equity. Real Estate investing is one of many ways to make money, but, if you are not in the Sales side of it, you face a lot of negatives in order to make long term profits. If you take the lessons from Dave Ramsey, then, you know that being in Debt is the worst thing in this world to be in. If you read the Bible, you know that we are warned that Usury is a Sin. The Banksters are in the business of getting everyone into Debt and having us Owe, Them. You say your Student Loan is "only" 3.2%. The current lending rate at Lending Tree for a 15yr. loan is 2.65%. Granted the judicious use of Credit is a way to make Money, but, when you are just starting out and you have to borrow to buy, why would you buy anything that but, your own Home and live in it? As your Residence, in two years you get to sell it tax-free. When starting out, I gave you examples of what you can do to make a little money, but, you can never count on Long Term Appreciation of Real Properties because of the Economic Cycles. The Biggest Risk Factor is Overnight Risk or in counting on long term Appreciation with real estate. So, it does not make any sense to me, to buy an essentially breakeven, rental property at Retail prices to hold on to for the Hope that it will go up in value over the long term as if it were a Stock or Mutual Fund. I have been a Newbie, BP follower for a couple of months and I have not seen any single house Deal that was better than this and most of the numbers that I see for properties that are offered, are losers. I am a gold miner and even from the California Gold Rush days, they have been saying that "the way to make money gold mining is to not to mine the gold, but, to mine the gold miners." 

@Kyle Murphy, Hello, I hate to see this kind of question as it makes me afraid for you and your girlfriend to even think of taking on more debt before you have paid off all of your other debts. Try to understand that we may be at the top of the real estate Cycle not the bottom. Caveat Emptor. That means that values may go flat here in Tampa where we lost up to 60% of property value during the 2008 to 2010 Economic Collapse. Some of my rentals actually went back to be worth what I paid for them, 20 years before when we had been in a flat appreciation cycle for 10 years. If you were to think like Warren Buffett, this would be the time to Sell and wait for the next bottom in the RE Cycle to Buy at a natural discount instead of searching for a Deal. That is where I am at. I grew up in Palo Alto and 47 years ago I had saved $25,000 when I was 19 years old. I could have bought downtown Palo Alto and sat back to just collect the rents and been a multi millionaire in short time without all the Sweat Equity that I have had to put into my rentals here in S. Tampa, during this last 30 years. Hind sight is 20/20. I keep suggesting what Dave Ramsey teaches...you want to get Debt Free first. Then, I say that the best Real Estate "investment" is always your first home because of all the first time Buyer discounts and you can live in that home for 2 years and then have a fixed up Residence to Sell, Tax-Free and go find another one to do without having the insanity of managing tenants here in Tampa, Florida. You can also Buy your first home and find a Deal to rent and plan to fix up both of them to move into the rental after you Sell your Residence and find another Deal as a Business Plan like me. Think. If I can maybe make 1% per year by keeping the money in a Savings Account. Or I can find a Duplex or Triplex to fix up in Tampa that will maybe make me $100+ a month and be an Absentee Landlord. Or I could Buy a Corporate Bond that will give me a few percents a year. Or I can learn how to Buy Debt like Jimmy Napier and make a little more. Or I can Buy a Stock or ETF that gives me Dividends and hope that this next downturn is not going to destroy the value of the Stock. Or I can learn how to trade Futures and be a Daytrader and maybe make $500 to $1000 each morning like my partner does. It sounds like you want to learn how to make money and the money you want to make is Buy and Hold investing in something that takes care of itself. PM will not do that for you with just one Duplex in Tampa. Rental Properties are not Stocks or Bonds. They don't take care of themselves and when the toilet plugs up or the AC breaks or the roof leaks the PM will not be out there when the tenant starts screaming at you over the phone that they will not pay the rent until you get there at midnight on Sunday to fix the problem. This is my standard message for Newbie's to RE investing and members of BP. 

@Eric Delcol, Hello, We just lived ten years in Seminole Heights on top of the 20 foot hill at the corner of N. Boulevard and Osborne with the million dollar view of Rivercrest Park running down to the Hillsborough River and the end of the Riverwalk....4701 N. Boulevard. I convinced my girlfriend, who owns this home, to put it up for sale and lets move across from the Lowry Park Zoo where we have a big lot with a 2000 sq. ft. home that we rented on the Hillsborough River. Her home has been for sale for more than six months and not one written offer because the day we put it up for sale, ten new homes began to be built within four blocks. They are all big if not two story and all have garages. No one even considers any of the extras that we have with this house. Lot and a half, on a corner, no trees on the lot, no trees in front to block the endless sunsets and moonrises. 2700 sq. feet of cinder block contruction with 2600 sq. feet of pavers, two Central AC units, one is for the 800 sq. foot Den and Sunroom with half bath and inside storage room with all the utilities including sprinkler control. Front porch, back deck, patio,side yard all fenced, back storage area, two car carport easy to maintain landscaping, ten year roof etc. Not, one written offer. MLS listed with drone pictures. Agent wants us to stage the house for quick sale...what a joke. Everybody wants shiny, new, with big garage, not updated, wooden, 2/1, 3/2 and we have 4/2.5! They didn't build 4 bedroom houses in Tampa, before this big wave of building started after the 2008 Economic Collapse and 1% interest rates for deposits in the bank. Most of the houses in Seminole Heights over the last ten years have been rehabbed. The area South of Hillsborough around Broward Elementary School and along the river is beautiful. All the rest of Seminole Heights is 2/1, 3/1, wooden, full of termites, tear down candidates, waiting for the next surge in building after all the big builders break their faces on the S. Tampa gold rush, South of Kennedy was first and now South of Gandy Blvd, East and now West side of Dale Mabry Hwy. The Path of Progress is definitely beginning to show up along Florida Avenue, but, on the West side and not the East side running up from the City Center through Seminole Heights. With Dale Mabry, the builders all built out the East side of Dale Mabry and now we see the rush to build out the West side where I have a house for sale near the AFBase, Do your research and pick your poison.

@Ryan Nitzsche, Hello, I too am new to BP, but, not to Buy and Hold multi-family and single family properties for rent in S. Tampa for the last 30 years. I keep seeing the new guys and gals asking essentially the same question about the "best Tampa neighborhood," should I look for multi-family or single family properties, try to hold for long term appreciation or do flips etc. You say you are an investor. I trade Futures and we consider investors, the Buy and Hold guys. Traders are the ones like me who hold from 2 seconds to 20 minutes, short term, day traders. That would be the Flipper guys in Tampa and a lot of them are getting killed in S. Tampa right now. Anyway, my question for the new guys is if you own your own home? If not, why not? Then, do you know that your best "investment" is in your own Residence. when you fix it up and sell it after two years tax-free? The plan would be to not look to become a burned out landlord like me, but, find a real Deal as they say in BP. How and where you find a distressed property for cheap is the trick. I am a gold miner to and they say that "gold is where you find it." I don't think it is a secret formula that the BP guys have. There are many ways to skin a cat. The safest way to invest in Real Estate is to only buy one at a time and make sure it is a "home" that you would want to live in or actually do what I do and live in it until the time is right to sell at a profit...tax-free and move on to your next one which you may have already had as a rental. I know a lady who has done ten like this. How you buy it is also a science. Do you pay cash? Use other people's money? Low down and financed by the owner? Lease Option. All those Low and No Money Down methods apply. If you have little or no money down, then, you may have to start with a manufactured home or a trailer. It's all the same thing. Just a bunch of numbers and you hope that they all work out to give you a positive return when you sell or trade.