All Forum Posts by: Ray Johnson

@Candice Banks When you say "up and coming areas of DC" Are you talking about an area that's currently a Class C+ area transitioning into a Class B area, or are you willing to go to a Class C, or C- area where you can get a 2br for the $300K range but the up and coming aspect may take a little longer than it would in an area transitioning from a Class C+ to a Class B area.  

@Steven DAmbra This will depend on several things if you want to have a great performing asset in the Condo space.

I only invest in Condos and large multifamily, I do not waste my time on SFR assets, or small multifamily.

What @Joe Splitrock says is true for some areas, this will depend on the location of the asset, I only purchase condos in major metropolitan cities, high density locations, class A or B properties, and typically new construction buildings or buildings less than 30 years old, and I never invest in buildings more than 6 stories high, etc... Since 2002, this has mitigated the risk typically associated with price fluctuations during down markets and works out great for me. I would never purchase condos in small towns, Class C- and below, or condos with high HOA dues even if it cash flows today, the HOA dues can increase and cut into your cashflow so I always factor in a projected increased HOA dues when analyzing a property with the expectation that the HOA dues can go up.

I will add that I have a high earning W2 that REI could never replace so I use RE as a form of diversification in my overall investment portfolio so condos and large scale multifamily investing work better for me than any other RE class.

@Steven Antonellis I BRRR a condo 7 months ago with an REO I got from Bank of America. When dealing with condos just make sure the HOA is well managed as previously mentioned. Also pay close attention to your competition the apartments near you because your potential renters will be gauging the difference in price and amenities.

@Elsa M. I have several condos in my portfolio, as long as you buy right they work just like other properties when it comes to your ROI. I have condos that outperform SFR, and small Multifamily properties so when someone tells you not to invest in the condo classification it's either they have a personal preference, it's their business model, the market they invest in or they don't know real estate that well.

@Kevin Mosier I don't know all the details on this deal, location, neighborhood Class C or D, etc... However based on what you've written, there are way too many red flags here, I'd suggest looking for a better deal. How many deals did you underwrite before settling on this deal?

@Mark V. This is nothing new regarding concept, What I think will change is if they were to become mainstream it is the current Wholesale community will suffer a little because these guys are cherry picking the better properties and leaving the riskier properties for everyone else. After the last crash, Private Equity companies were doing this with a flawed model so they saw great losses, these companies are trying to use a more refined model however I still see gaps, the big upside is if you gave people the option of using a well known brand like Redfin or using the stranger who direct mailed or cold called you, Redfin will win most of the time over for those who are on the fence or uncomfortable with the situation.

@Davin Sundvick This is going to vary based on investment goals, every flipper that find a a property low enough to rehab and flip can also hold that property as a long-term rental, by flipping they are choosing not to be landlords and receive their ROI in monthly increments, but instead all at once. I've also seen flippers that also Buy-and-Hold some of their acquisitions. It's all about investor preferences and business models.

@Philissa Gilliard I think this depends on the individual and who you're targeting to do business with, If someone contacted me wanting to conduct business and the only digital footprint they had was a Gmail account or something similar I wouldn't respond assuming it was fraud or someone who didn't have their business together so dealing with them may not be as professional. With companies like Godaddy, and a host of other low priced sites, you can get a business website fairly cheap. I recommend establishing an online presence for your business even if it's just an information site.

@Barry McCamant What size Syndication arena are you looking to get involved in? There are so many different area's of Syndication, it's like asking about our expertise in REI in general.

Are you looking to network with Syndicators of 40 - 120 Units,  120 - 250 Units, 250 and higher?

Class C, Class B, New Construction, etc...?

All of these are different types of syndications, are structured differently, draw different types of investors looking to place equity, and the list goes on.  

What are you considering?

@Brian Pham be careful using credit cards for the rehab, I've seen investors go that route and once they're done with the rehab, they can't get out of the Hard Money Loan at a good rate because of their DTI ratio which spiked due to the credit card usage, if your only option is using credit cards, use a higher interest rate calculation when projecting your BRRRR strategy to see what your deal really looks like at the 6-12 month seasoning period for the refinance