All Forum Posts by: Michael Lee

Hello and thanks for your statement Chris!  The stock market never shows that there a negate times and it is looked at very well because of it's complication of the Stock Market and contributions are higher versus Real Estate which only might have more to learn but is easier to learn the basics.  The news usually reports more real estate negatives more than stock market negatives.  People tend to believe what they see on the television whether it is true or not and most people just want to be lazy and tends to do investments late and how it is reported on TV which tends to be believed too much.   I hope this makes sense.

My best to you!

Hello and welcome to this site Brandon!  One important item of a good answer would be knowing your goals  If the answer of yours is that these are on a short term investment I would tell you to sell both units if it is a hot area and is a sellers market there I would probably say to sell both of them as soon as possible if the seller's market continues and I might not spend your own or borrowed money before you sale.  

Owning single home houses are something I will never recommend renting them out with a few exceptions and you did not mention any of them. If you can make money and a minimum of "any expenses" I would recommend to sell both of those investments and to borrow as little as you can. SFH's are just too risky to use them as rentals because any vacancy could hurt. It is a good thing that you are still employed, I think.

If your are stressing the importance of long term investing  I would probably recommend the same thing because of the current economy would mostly make a Fix and Flip or a Quick Flip scenario and not get a loan to do any repairs if you feel like you would still make a profit.  I then would recommend that you purchases new homes  after you explain to a tax consultant like Dave recommended that best fits your goals.

You might benefit from the tax liability by living in one of those homes.  I would also say that there is good debt versus bad debt.  The basic meaning of good debt is that you are making more than what you borrowed.  So your final decision might be the answer you make on those 2 properties and any decision might be decided on the debt question of good debt versus bad debt.

If you have any benefits by purchasing  an apartment complex as a controlled ownership and by benefiting from a Tenants in Common joint venture association that will contribute to an apartment complex purchase and allow your keeping control of that property on a daily basis regardless of your ownership percentage.  

Just to inform you about why you should agree with anything I say might be because of my age of 61, my construction experience around Dallas for about 30 years, my having a real estate broker license in Texas for about 30 years, my college graduation in business with honors, or the time I have spent learning about this type of investment.

I hope that any of this helps your decision.  Even though you never mentioned having a W-2 job it may effect your decision making process.  Good luck to you!

Hello and welcome to this site Mike!  Even though you are fed alot of BS about Wholesaling I would not recommend Wholesaling as the place to be in when you first start out.  You may have to learn the different types of real estate and there is Wholesale competition out there too.  They tend to know more than you and they do crap to take advantage of you or go behind your back.  It's not as easy as the sellers say it is.  Most of the people you hear from on the Internet are crooks trying to fill their pockets, not yours.  

Depending on your attitude and your level of faith and honesty that also can be difficult because at least half the time you spend with sellers you have to be a little dishonest with the seller with your actual intention of what you are really up to.  That is why you may have to do two closings and budget for both of them in an attempt to not let the seller that you are making a profit on what you are doing.

In this economy Fix and Flip may be the best way to go including the borrowers that are willing to finance your repairs or rehab or to purchase multiple unit houses with a loan that the FHA will provide you with a low down payment but it is only made to an owner-occupant for regularly 12 months and you get to keep that same loan if you even when you choose to move away.

Another thing to consider is to buy apartment complexes and take the advantage of positive clash flow and using a cap rate to increase your value on add-on properties and raising the rent.  Plan on this to be a long term investment of 7 or 8 years or longer.  You do not need any prior experience,  That statement is a myth.  

You typically can get a Property Management Company when you work your way up to about 30 units and can turnover the property to them to take over the daily operations and you get monthly reports that are financial and occupancy involved.

The smaller apartment complexes (starting at about 6 units) are often owned by individuals that are willing to give you the financing.  Another typical positive attribute about doing apartments is having less competition and having more units at a single address.

The more units you purchase, the better.  Who am I?  i was in the construction management business for about 30 years.  I also held a real estate broker license for about 30 years.  I was born and raised in Dallas, Texas so I have plenty of experience in real estate.

If I can help you on anything please contact me on this website.  I am on this website just about everyday.   For about the last 4.5 years I have learned much about real estate investment and do that 7 days a week because I have been bedridden by some medical issues.

Good luck to you!

Hello and welcome to this site Heather! I really do not know what to tell a rural person that is trying to invest in an area that is not fully developed. I was born and grown up in Dallas, Texas and still live just outside of Dallas and I'm currently 61 years old but I will attempt to give you an answer. I would recommend apartment units over single family rental units for many reasons with a few exceptions like a FHA insured loan that has a 31/2% down payment but requires owner for about 12 months to live there.

You might consider making your investment(s) into a proven Turnkey company that does everything including property management and gives you a decent return every month on your investment. These people usually buy SFR. If there are apartments within a one hour driving time you may be able to do that depending on your goals and plans. One good thing about apartments is having multiple units at one address.

You would start off with small complexes and work your way up. Since you gave no location statements or your budget situation makes answers difficult. If you are short on funds there's always a Partnership that can help you accomplish your actions. There is not too much competition on apartments either, not as much as there is on SFH's. If you find an apartment complex it needs to start off with a positive cash flow.

If you need any further assistance you can let me know through this Website because I'm usually on it everyday.  Just so you know, I have about 30 years of construction management experience and having a real estate broker license for about 30 years too.

Good luck to you!

Hello William!  It's great that you have gotten started and may know enough to understand my answer to your question.  If I had the same "problem" I would put it all down on a multi-unit complex and work my way up to apartment complexes that could afford a Property Management Company. It might be just as hard to find one but if you are looking for a long term investment it is the best way to go.  You also get more units at the same address.

You also get more for each buck used to add-value because of the cap rate used.  I hope this helps you.  Good luck to you!

Hello and welcome to this site Erman!  There are only a few things for buying Single Financial homes because they are so risky.  The more of the units you have at each location, the vacancy will not hurt so much.  I would be looking for Apartment Complexes.  Needing any experience to do that is a myth.  Immediate positive cash flow is importing and a value-add place at a commercial loan location (more than 4 units) will add more value to it and not on a house because of the way cap-rates works versus comparables.  So are amenities, public transportation, and the local schools on any rental property. 

The location is important with any rentals as well as the first impression to any prospect.  It's parking and access is too.  Good luck to you!

Hello and thanks for your question Adrienne!  That is different in what I expected you were going to ask but I will attempt to give you a good answer.  I would try to find an acceptacle property manager or company that has experience in the same area   I would try to ask for referrals of property managers in that area from real estate Brokers.  If I feel the need to go farther I would also call local House and Apartment Managers Associations and try to get there referrals.  You might ask a Turnkey management Company in that subject area that has experience and availability.  Whoever you find I would tell you to tell them the things you expected like financial reports each month  and will they care of the minor maintenance or push for a quick turnaround plus keep your travel expenses down and the communication that you expect and as often as you need.  I would check out any locally managed property owners that may have someone worth referring.

That is all I can think of right now but one of the things that is mandatory is depending on a local manager or Property Management Company.  From what you said I would believe that those properties have full equity and you can afford an "expensive" property manager that will do what you expect and that you would still make a good profit and will keep your travel expense to a minimum..  I hope any of this helps you.  

Good luck to you!

Hello and welcome to this site Kathryn!  Just do what is the average for that area.  Put the refrigerator where it is the most convenient.  Depending on if this is a short or long term investment.  That would probably give you two different answers and the demand for that area. I would not hesitate to move the refrigerator if it is a long term investment.  I would tend to not spend more money if it's short term.  That answer on the closet existence and location would be about the same on a short term or long term investment.  I hope this helps in any way.  Good luck to you and your family!

Hello again Arthur!  Thank you for your response.  i would just recommend giving quality response to your customer's concern and to respond fairly quickly to any complaint or maintenance issue.  Having good customer service will pay off in the future as well as making a good first impression.  Best wishes to you!

Hello and welcome to this site Arthur! The more units you can buy, the better it is and any vacancies will hurt less. If you can make it happen starting off on apartments is no different than starting on a house, it can just make you more money and have more units at every address. The experience language before buying apartments is a myth. One of the reasons I would approve of a residential multifamily property is with a "house hacking" loan that is guaranteed by the FHA. Its location and the demand runs a close 2nd as well if you insist on houses you need to quickly own several of them in high demand areas. If you have to make any repairs just do what is considered average in that area.

Your ability to do any needed repair or rehab work must be done quickly so you can rent the property out sooner as opposed to later.  Not giving any details makes your question harder to answer.  Shop around for the best  loan interest rates and any repair costs.  It is usually better to have a pre-approval loan letter done prior to making any offers.  Acquiring more education will give you more confidence and make you sound like you know what you are doing to the seller and the Lender.  It might be better right now to Fix and Flip (including quick flip) over Buy and Hold.

Good luck to you!