All Forum Posts by: Mike Castellow

@Ted Klein

Thank you for the well wishes.

I also like the potential in Kansas City and would love the opportunity to do some major renovations on some of the 100 year old homes in the area. A lot of investors typically avoid these because of the initial costs and length of time it takes to do the work, but I enjoy the challenge and would much rather do a major renovation on a historic home than multiple cosmetic remodels for the same amount of initial capital and return on investment.

@Ted Klein I'm working nights at the end of a refinery outage in Alaska, and it's winding down so I have pockets of free time throughout the night. I actually cut my post off shorter than I wanted because I had to take care of some business, and I just didn't get back to talking about my potential plans.

A little backstory on why we are looking to move from the Austin area. My wife was recently diagnosed with an electrical issue with her heart and the new medication has made her far more susceptible to several allergens. She has always had issues during cedar fever season and now is going to be tested this week to find out which other allergens are causing her current severe allergic reactions. This will be a major factor in the region we relocate, but I will also be choosing the metropolitan area based on current and future real estate investment opportunities, the ability to match my investment style with the local market, tax implications, and the ability for me to lead the type of life that I want to live. I have a long list of potential investment locations, and I will be narrowing my list down over the next few weeks with most of my research taking place after I complete my current project this coming week.

I have mainly concentrated in real estate around my home in San Marcos, TX, and I have just begun researching opportunities to invest in other locations. If I am to remain in state, I plan to primarily invest in rental properties in and around San Antonio, Victoria, Corpus Christi, or I'd really enjoy focusing on old dilapidated homes in small Texas towns that have outstanding school districts.

For out of state, I will be focusing on metropolitan areas that exceed the national population growth and closer to the 1% rule than I can find around Austin. I've just begun researching cities such as Kansas City, Cincinnati, Fayetteville, several coastal cities in North and South Carolina, couple of places in Oregon, and numerous college towns scattered throughout the country. Like I said, I'm just starting my research outside of Texas, but I have previously traveled for weeks and even months at a time to almost every destination that I'm considering so I at least have some basic idea as to the culture of most of these areas. I have many more hours of research before I am ready to make a move, but I will be heading in my chosen direction within the next month or two.

@Jim K. You gave some great advice on finding good contractors and not just looking for the lowest bid, so I'm not sure why you would feel that you need to harass @Kyle Waters about his hair. His hair has absolutely nothing to do with his ability to screen and hire a good contractor. I personally have spent more than 25 years in the petrochemical industry and have had to wear fresh air respirators and full chemical suits in numerous pressure vessels and towers that have had toxic or inert atmospheres that were considered IDLH "Immediately Dangerous to Life and Health", and I still don't have the time nor the desire to worry about how someone's hair or lack thereof would impact whether or not I could work for or with them. Not only do I not care about someone else's appearance, but I've spent so many years having to shave on a daily basis to ensure that a respirator would form an airtight seal that I frequently grow a full beard (like now) when I don't have to meet those requirements.

I probably shouldn't have posted in this forum harassing you about harassing someone else but to tell the truth, the turnaround at the refinery in Kenai, AK where I'm currently working the night shift is winding down, and I had a few extra minutes to speak my mind. Regardless... good luck to both of you in your chose career path and investment field.

@Austin Joseph I am currently evaluating this same scenario myself right now. Since I frequently travel for my primary W2 job, I am free to live anywhere that I want to. I have spent an extensive amount of time traveling the country so I already have a good idea of the types of places that I would be willing to live and invest, and I am currently evaluating the numbers to see which locations make the most financial sense. Being free of any location restraints will also allow me the ability to pack up my toys and head to the next location if the economic conditions so dictate. Since some of my core construction and design team members will be moving with me, I will be able to quickly assemble a reliable team as @Kris Wong mentioned and can further reduce my learning curve by hiring a knowledgeable local real estate agent. I will also be hiring local skilled laborers, whenever financially prudent, instead of having to rely on unproven subcontractors. I'd love to know where you are considering investing and see if any of those locations overlap with any of the locations that I am considering. It would be great to share some information and insight with others so that I can further narrow down investment location.

@Shawn Jaffee The home prices in many of the cities surrounding Austin tend to be a lot more favorable for beginning investment purposes than Austin itself. I'm currently in San Marcos, and am in the process of expanding West, South, and Northwest from there.

@Homero Ramirez

If you are already approved for an FHA loan, one of the easiest options would probably be to find a duplex and house hack while you continue your real estate investment education. The main thing with real estate investment, from my limited perspective, would be to find the niche that best suits your investment style and personality and learn everything about that niche and do it as well as possible while continuing to learn and grow both your business and career.

@Account Closed

First let me say, congratulations on finding an alternative and less risky avenue for your talents. I enjoyed reading your story, and I'm sure many others would as well. You might want to consider writing up a first chapter and shopping it around to see if you can find some interest from publishers. There's a lot of young kids out there that could use a story of someone who found their way out of the only lifestyle that they've ever known. While my situation growing up was a little different, only because I realized at 17 that if I didn't move away I would wind up on a very similar path. Most everyone that I grew up with never made it out and are either dead or frequent guests of the county or state, so I'm hoping that you can share your story and help other young men and women realize that their future is in their hands and has absolutely nothing to do with what they have or haven't done in their past.

Good luck and I wish you continued success!

I might have been too specific when I only mentioned Danbury, TX, so I wanted to repost and see if there were any local Alvin, Angleton, or Brazoria County investors or real estate agents that might be willing to share their knowledge of the local market. Since the town is so small, I'd also like to find out if there are any HML's that will loan for a project in Danbury.

Any knowledge or insights would be greatly appreciated.

I have the opportunity to purchase a tear down house with a nice size barn/workshop on 4 lots in Danbury, TX. Is there anyone on here with any real estate experience in or near Danbury, TX?

My biggest concern is logistics and contacts since I live between Austin and San Antonio. Other than my lead carpenter and a few family members, I don't have any real contacts in the area. Any advice or recommendations would be appreciated.\

Thanks,

Mike Castellow

First let me preface my comments with, I am a real estate investor who also grew weary of trying to find a licensed, reliable, and knowledgeable general contractor who was actually available and willing to perform a whole home renovation on my historic home in San Marcos. When I found out how high both demand and prices were, I decided to do something about it by taking matters into my own hands. I actually went out and took the residential general contractor's examination and opened my own remodeling corporation so that I could perform my own renovations and homeowner and other investor's remodeling jobs as time allows. I know a license is not required in the vast majority of Texas, but it actually is required in San Marcos if you're going to work on properties other than your own.

@Chirag Shah Keep in mind if you hire that if you need to hire a true general contractor then you will either be paying a fee of approximately 10% of the overall job costs or an agreed upon salary. If you can find your own trades and have time to get bids and follow all of the work as @Bryan Petrinec suggested then that is one way to shave costs. That is path that I took, and one of the things that actually led me to start my own company.

I have to completely agree with @David Ivy on the contractor's costs that @Account Closed was talking about. An hourly rate for a painter actually seems to run much closer to $30 / hour than $20 and then you have the extra costs for worker's comp, taxes, SSI tax, any benefits including mandatory health insurance, and unemployment insurance. In addition to these fixed costs the contractor will bid the job with an additional mark up that is probably around 50%. While this mark up might sound crazy, it is with this "profit" that the contractor is able to pay corporate and/or personal taxes, liability insurance, bookkeeping and CPA fees, sales commissions, and if the job was bid correctly and all things go well then they get to pay themselves a salary. Before this business venture, I worked as a W2 contractor in the oil and gas industry for more than 20 years, and I can tell you that the average mark up in that industry are often closer to 200% so the margins are much thinner in the residential construction business.

If you would like a bid just to know if the prices that you are receiving are fair let me know, and I'll be glad to help.