All Forum Posts by: McKellar Newsom

In 2007, I thought my life was pretty well set. My husband, Chris, worked for my parents' mortgage company in Montana and I was a stay-at-home mom. We thought we would purchase my parent's company when they retired.

Chris kept coming home with stories about sub-prime lenders falling. A year before Lehman fell, we decided we didn't want to be in the mortgage business. We started having to live on half our income. We "ate our kitchen pantry". We consumed all those cans and bags of rice that never completely get used up normally. We pulled out our savings that had been in the stock market. But, you can't live on savings; you need cash flow.

Chris started delivering for the local bottling company and I started working again selling radio ads. While Chris looked for a better job, I read about investing in real estate. For a year or so, I put in a bunch of bids on property in Montana to get a modest 10% return. I rarely landed anything because I wouldn't raise my offers so I started to research other states and found Tennessee as well as other markets. We ultimately decided to move to Tennessee to be closer to our investments.

I started with flips and put profits into rentals. I've done more than 50 deals (more if you count all the deals with my coaching clients) and have 27 buy and holds. I'm now upgrading my "little" rentals. Friends started asking me to help them invest so I began helping them. I now have a good number of coaching clients. I also have an LLC partnership where I earn my part through sweat equity.

I'm so grateful for where I was and where I am now. I am grateful for the personal recession; I think it toughened me up and made me more grateful in general. I'm grateful for the decisions - not buying the mortgage company, withdrawing from the stock market before Lehman, buying real estate and moving to Tennessee.

Thanks for making me think back Rich.

Good luck to everyone. If you think you are in a tough position right now, you might be right where you are supposed to be because your situation might be toughening you up to make changes to put you in a better position. mck

I prefer to let my property managers communicate with most of my tenants; however, I like to work with my local section 8 tenants to speed up the process.

I started out flipping properties and putting the profits in rentals with 550-800 rent ranges. My toughest property is my lowest end property, a duplex with 450 rents.

Recently, I have been upgrading to nicer working class neighborhoods with lots of trucks and less crime. I like the 800-1200 rent range which have fewer turns and maintenance issues. I've been able to buy more equity with the medium end properties. mck

In Chattanooga, prices are still down compared to a few years ago but rents are up. I up my rent after every turn except for my lowest end property. Nashville seems to be going the same as Chattanooga. Memphis prices seem to be up a bit but rents are stable or down. Overall, it's still a great time to buy.

I'm impressed with how much everyone has done. I've been happy with 2012 so far.

Closed on a SFR on January 6th, have nearly completed the rehab and just listed it for rent.

Helped a client come up with an investment game plan and make 6 offers on houses this month. The goal is to buy 10 by the end of the year.

Landed my first "sweat equity" LLC deal. We plan to buy 6 this year.

Set up a marketing partnership.

Did 7 chin ups and 2 pull ups. My goal is to not have to touch the ground in between reps. I couldn't do one as of last summer.

Reorganized my wish board.

Try ServPro. They are a good company to remediate mold and water damage. Some are also general contractors and can fix the problem as well. You could at least get a quote from them.

Jeff,

We have a few holdings in Oregon and use Sterling Property Management out of Corvallis. This particular property management company has been amazing. They are one of our best property management companies.

Since you aren't too far, you might want to touch base with them to see how the rental market is doing in Corvallis. They might have some suggestions for a good realtor in the area.

Good luck. mck

One idea would be to buy another residence (or duplex or 4-plex) with an owner occupant loan and live in it yourself and rent out another room or the mother-in-law suite to someone. You could keep your initial house and rent out your room there. I think you have to live in one residence a certain number of years before you can get another owner occupant loan. mck

Investing outside your home city is not for everyone but I love it. I get the returns I want. I wish I had started investing away earlier.

I never do my own property management. I like to delegate it out and focus on finding deals and clients. I don't want to answer calls from tenants and respond to repair requests. If I did my own property management, I'd have higher turnover.

If you opt for property management, be ready to fire a company if they don't follow through. Changing property management companies is no cakewalk.

Thanks for your comments Chris. Due diligence delivers the dough. When I was slack about due diligence, I lost money and just as importantly I lost time and focus.