All Forum Posts by: James Park

I left the corporate world as VP of eCommerce in July 2007. Started my first eretail company in March 2005. Today I run and operate three internet retail stores. One of the three websites is my own consumer brand in designer eyewear and jewelry.

In June 30th, 2011 I moved to Atlanta from Chicago primarily because I wanted to build my second career and company in real estate. My dream in real estate is to have a company that works all three income streams in the northern suburbs of Atlanta: 1) Transactions, 2) Buy and hold SFRs in emerging sub-markets, and 3) Flipping.

I wanted to get your opinion about my SFR rental investment strategy. I've always been attracted to SFRs over commerical, multi-family, and apartments. I've always liked to build new and the past three real estate i bought were all new construction.

Most of the SFR and multi-family investors i see here on BP seem to have a fair amount of rehab skills and buy distressed properties REO & Short sales and either fix, rent or flip them. They also seem to live by the 2%/50% rule.

I target the "A" neighborhoods in the northern Altanta suburbs within High School clusters that are within the top 1% in the state. In the Atlanta market the more apartments and multi-family units are within a school cluster, the lower the ranking is for that high school. Here, in the northern suburbs of Atlanta, schools are what drives the demand for real estate.

My farm area that search daily for houses doesn't have any condos, townhomes, apartments or mult-family units. I try to buy into the entry level subdivisions that feed into the best high school clusters. Do you guys think that this is a viable long term strategy for building a portfolio of SFR rentals?

Here is a deal i am looking to buy in the next 2 months.

Demographics profile.
Median home price in this cluster is $380,000
Median household income is $140,000
High school ranked #5 in state: middle school #3 in state and elementary #2 in state.
No apartments and multi-family and lowest rent listing is $1700.00/month and the rental inventory in this area is 1.7 months.

I am looking to buy a new construction SFR 4 bed/2.5 bath 2800 sq/ft on .25 acre lot.

Price: $170,000

Rent: $1700
Mortgage: $608.70
HOA: $50
Insurance: $50
Tax: $141.66

Down payment $42,500 - 25% down
$10,195 annual cash flow
24% cash on cash return

At the moment, I don't have much rehab skills but from my limited experience my rental that I bought new in 2006 has been rented to a corporate executive transfer for 6 years now. The tenant has kept the property in excellent condition and i did not have to put any money in the home as the tenant has kept the property up with his money.

Should i pull the trigger on the new construction SFR?
I plan to buy and hold this home for 8-10 years.

Jennifer that is incredible! What you are doing right now is my dream. I have a product based online business in jewelry & eyewear that i built up in the last 7 years which provide me with a stable income. I've been wanting to do exactly what you are doing right now for a long time.

It is encouraging to know that you started out as an RE agent then started flipping properties and own cash flow rental properties. I can't believe you are doing all this as a one woman show. I will definitely need to hit you up for some advice. Right now i am just starting out as a RE agent for my area and currently own only two rentals. I dream of what you are doing right now.

Thank you so much for sharing Jennifer!

Ned,
I guess your investment advice outside of real estate would be..
1. Short Gold and Silver
2. Short the DOW and S&P
3. Short the long term treasury bonds

and go long real estate right? I know you are right about real estate being the only asset class that is undervalued right now. I just like to diversity and not put all my eggs in one basket.

Do you think in the next 5-8 years we will see real estate and interest rates moving up slowly at the same time?

With low fee Walmart brokerages like Solid Source and Duffy Realty here in Atlanta.. I just don't see how you can make money starting a brokerage today. These brokerage have 90/10 to 95/5 splits with their agents. With splits like that... it just seems much easier with less headache to be your own RE agent than starting your own brokerage.

I would be really interested to hear from business owners who operate their own flipping business vs. Transaction/RE agent business.

What do you Atlanta real estate investors think about this? How much decline have you seen in the market you invest in since last year?

http://atlrealestatescoop.com/tag/case-shiller-index-atlanta/

Steve K.

I looking to make some big bets on TBT and TBF - two ETFs that short the long term treasury bonds. I think these 2 ETFs would do well in the long run. I mean ... I just don't see how it is possible to a 30 mortgage under 4% in the next 4-5 years. Do you?

Monica,
Thanks for sharing. Wow! you are like a Real estate super woman! Would you mind sharing how you started in your real estate career? Did you start out as an RE agent and then start your own brokerage afterwards?

I read somewhere that you attended John Schaub's seminar last year. I really admire this guy and currently following his passive investment strategy of buy one SFR every year and build a portfolio of 10 SFRs by 2020.

Congratulations. you seem to be doing very well in your career in real estate.

Jeff.... interesting.
I've always thought that starting a flipping business takes a lot more skill and ability than starting a RE transaction business.

Which business is more profitable in terms of margin? You don't need much capital so start out as a real estate agent except your time. However in a flipping business... you can't really start without capital.

All being equal... are your chances better of having a six figure income in a flipping business or working as a RE agent?

Steve, hahaha.. domains are a lot like virtual real estate aren't they? You can buy them, build on them, flip them, and sell them. One of my best friends in SoCal bought the domain eromance.com for $40k for his dating website.

I was scratching my head.... "How can you buy just the domain for $40k?" The most I've ever paid for a domain is $12.95 at godaddy.com.