All Forum Posts by: Bart H.

@Bart H. ,

Appreciate your approach. I too like the multiple components of wealth growth from buy/hold real estate....but I admittedly like the 8% appreciation in Denver now.

I think there are many REI on BP that are long time and hate too much equity in the property that returns small yield....but, we are a collection on the spectrum of everything from zero debt to 100% leverage.

So, you like to own the "future scraper lot". Do you find that it appreciates more than a long time buy/hold? A nicer quality rental in the same neighborhood?

I too look for these...an ugly house on a nice lot, I build one spec home per year.....but I never thought of buying today the scraper for 5 yrs from now.

@Steve K. I actually have these conversations with my wife all the time, and HER risk tolerance is far lower than mine. She wants everything paid off, while I want to expand at a moderate rate. It all comes down to risk. "Risk" is not inherently good, or bad. High risk just means that there can be a very large "swing" - basically a large variation in outcomes. Low risk means that your outcomes are more predictable, not wholly predictable, just more so. An example of extremely high risk would be something like betting on a number at the roulette table, you might lose your money but you also might hit a pretty big return (typically 35x your bet). If you bet $100, that's basically a range of -$100 to $3500, hence "high risk", a less risky bet (less risk, not low risk) would be betting on black or red giving you a range of -$100 to $100. No risk would be keeping the money in your pocket and walking away because gambling is a pretty bad idea in the first place (I work in casinos, so don't tell my boss I said that). 

Strategies like BRRRR are high risk for many people, because frankly... far too many get excited and want to "strike while the iron is hot". They don't maintain enough cash reserves for each property, because it would slow down acquisition... grow Grow GROW! And they're right. If they can keep striking while the iron is hot, they will continue to grow wealth at a fantastic rate. Get rich quick. But if they don't slow down in time, when a large dip in the real estate market happens... some of them won't be able to weather it.

Don't get me wrong, I'm envious of the ones that grow like crazy. Striking when the iron is hot and making a fortune before resting on their laurels. They are a lot braver than I, but hindsight is 20/20. The funny thing about the economy is that.... no one can really predict it. If the economy crashed before they became stable, they would have lost all of it. Prior to the trade war, we were in the midst of a near record-setting decade long bull market. Keep in mind that we are STILL in that bull market, but the trade war has been making it fizzle a bit. The fact that it is very close to record setting means... we're in totally uncharted territory and some people may say "overdue" for a correction. But once again... it could collapse tomorrow, or go on for another decade. People said the real estate markets in Hong Kong and China was unsustainable and in massive bubble territory... about 10 years ago. Some of the people who didn't listen have seen their properties grow 500% or more.

There are people out there that will only do cash outright, they miss a lot of opportunity that way but they have almost zero risk. If the economy collapsed tomorrow, all they need to worry about are insurance, taxes, and maybe some repairs. There are people like Matthew that like to play it very safe, aiming for some leverage but carefully measured. I'm a little more risky, especially now that I'm looking to diversify a little more, but that's because I've "built in" some security first. But that's a key word.  Security. Better properties, mean you're less likely to have issues with both the properties and the tenants. Matthew and I belong to the turtles of the real estate world. Slow and steady wins the race.

Then you have the early birds that catch the worm. An early bird that started when I did would probably be in dozens of properties right now, possibly worth double, triple, 10x what mine are worth. Or... the early bird might have gotten unlucky on one of the early acquisitions and ended up 20k in the hole for major foundation issues that somehow got missed, or 5k for a new AC unit. (Did I mention that my one B-/C+ property had the copper coil stolen from the AC unit on the DAY I signed escrow? 4K to replace that one.) One or two really big setbacks early on can break a new investor. A big slide in the economy could break many investors. Or... we could have a record-setting, decade long bull market, and the ones that made it look like geniuses right now. They're in the strike while the iron is hot camp, and they've been the real winners for the past decade. But it could have just as easily gone sideways much sooner.

I'm okay being a turtle. The other guys have been doing great, many have made fortunes, but I don't want or need the kind of stress that operating like that would bring me. Sometimes I'm envious, but it's just not me. What good would an extra million or two do me if I die an extra 10 years earlier because of the ulcers? I'll just turtle along with Matthew, and let those guys make their fortunes. They've certainly been RIGHT this past decade, but that doesn't mean that I've been wrong.

I am under contract on a deal in Allen, TX and processing the loan. Its a rental property. Lender asked me to get a quote for home owner insurance. I reached out to few insurance company. Quotes came about $1400-$1800 per year and it comes about $110-150/month. we have few properties in CA and IL. we are usually paying about $700/year. Why its so expensive in Texas? Please share your experience or recommendation if any. 

All great answers.

I wonder what exactly is the impact to a landlord when you say:

"The bonds suggest that they will go bankrupt, and the politics are not friendly to landlords or businesses in general."

Would you mind clarifying?

Thanks

I've been listening to the podcasts (started from the beginning a few months ago and am on #79) and, at the behest of the guys, have finally gotten started with the forums. So I wanted to start off by introducing myself. I'm a sound mixer for television and film based in Dallas, TX and also have a retail shop that caters to the same industry. That's my day job, which I'm good at and mostly enjoy doing. Every day is unique with its own challenges and opportunities, but I can't help but see the window slowly closing on being physically able to keep it up until a traditional retirement age. I work in a self-employed industry where everyone is freelance and is constantly "unemployed" which is, perhaps ironically, the most secure job I could ever imagine. Being freelance also allows me to experiment with other ventures as well. I've designed and created a few apps, a physical product and in 2016 launched a plan to start building up some type of real estate portfolio, along with my partner-in-sound who is 50/50 with me on everything we do for our location sound business. We decided that we were best served to create our own tenants in the commercial sector rather than going for single family homes or small multi-family units. The basic idea is to operate what essentially is an office complex with a self-storage mentality. Admittedly, it's a bit different and not for everyone, but it's in our wheelhouse of expertise and it's worked well so far. We leased our initial building as a proof of concept and then bought a second property on our own as our first big kid step towards acquiring commercial property. We've learned a lot so far and are happy to be part of Bigger Pockets to continue our education. I'm most interested in learning more about various types of financing strategies but have been thrilled to find out so much more from landlording to absentee ownership in the residential market that I believe has a lot to offer to me. Thanks for everything so far and thanks in advance to all the great people here that are so willing to provide their insight on everything.

Hello!

My wife and I are purchasing our first investment home so I am interested in some advice. The home itself is a 3/1, 815 SF and it has a simple, low pitched shingle roof. The roof is nearing the end of its usable life. A few of the shingles are starting to curl, but there are no leaks. Our strategy is to buy and hold long-term for positive cash flow.

Would the savvy investors in here A) Replace the roof as soon as possible before we move-in our tenant, or B) Wait for some time so we can save up and get the most out of the current roof's life?

Our strategy is to buy and hold long-term for positive cash flow.

I should also probably point out... We are located in Jacksonville Florida and entering the peak of hurricane season.

Thanks!

I’m a Newby trying to start small in multi family. Does this look like a decent deal?

https://www.zillow.com/homedetails/4804-Junius-St-...

I’m in Dallas TX so prices are high on everything. Thanks in advance!

Dylan

Hi Everyone,

I am graduating from business school next year and want to start planning and acting of my future financial freedom. 

For my future job, I can choose between Chicago, IL or Dallas, TX as my base. 

From my previous learnings, my initial strategy is to invest in a duplex and "house hack" while gaining more experience to invest in additional properties. 

I would love to get some advice on which location is best to invest.

Thank You!

Fabricio Kannenberg

Hey Everyone!

Im trying to plan my business model for the next couple years and debating if I want to aim for flips or buy and holds. I have a day job right now I dont NEED cashflow but cashflowing will free up capital from my day job to reinvest. So both seem like a solid choice. 

So my question is what is typically harder to find good deals on? Im in the Dallas Texas market. I've done one flip and I've rented to tenants before so I have a bit of experience in both. So I feel the deciding criteria is which path I can manage to find the deals in. I plan to mostly work with wholesalers and the MLS as apposed to finding my own off market deals.

Thanks!
Jim Welch

This property Just came on the market. Asking price is 90,000. Four bedrooms two bathrooms with a pool and needs a total rehab. Do you judge a total rehab by cosmetic needs or in this case leaking pipes total re-wiring and current the condition of the pool in addition to needing flooring cabinets, etc. The ARV is pretty good the potential rent is also pretty good. I would hate to wholesale this property and lose out on a potential for a brrrr. I know this property probably won't last long even in this condition but I am very new to this and I have not completed a deal yet and would hate to lose my shirt on my first deal. My estimate on the repairs is $56k. Any advice.