All Forum Posts by: Ray Johnson

@Karim Zada like many have stated, NOVA is hard to cash flow, a few of the strategies I use in the DC/NOVA area are: 1) My favorite because it allows me to purchase before the investor pool of buyers bid up the property. I buy REO's as Owner Occupant. I'm single so this works for me since I don't have to move a family around every 13-plus months after my Owner Occupant timeline has been met. 2) I also buy low-rise condos or Townhouses with low HOA dues, they will cash flow in the area. I've been successful with this strategy, keep in mind you won't be closing on 3 - 10 properties a year with this strategy, it's strictly for the long-term buy and hold portfolio.

@Ike Ekeh @Justin R. has pointed out one of the major points that will determine your price points and targeted markets for solicitations. Another thing to consider is the portfolio mix, Are all the parcels 100% raw land or do some parcels already have Sewer, and Utilities already in place? When I worked at a couple of the larger REITS in Orange County, and LA those were some of the main consideration points for a deal. I'll contact you offline later to see if you've already reached out to my old companies in SoCal, if not we can discuss.

@Joseph M. The article is 100% correct, I've worked at 2 National REIT and the diversification of a REIT can't be compared to the small scale investing we do. A REIT can have Large scale Apartment complexes 500 Units or larger, Large Office buildings or Office parks consisting several office buildings, Hospitals, Land, Industrial Wharehouses, Hotels, Large Shopping centers, and they also have strategic components factored into the REIT to mitigate losses based on changes in market conditions or asset types. I can't begin to count the number of inexperienced flippers that forget to factor in something as simple as taxes on sales when they're doing the numbers to acquire a property causing them to have a loss on a deal.

@Dominic Ruegemer What is the property actually worth? I'm not talking about the guesstimate from sites like Zillow, What are the recent sales comps? What are your minimum of 3 rehab estimates coming in at on the cost? This information will determine what your options are with the property.

@April Chim I've been wondering the same thing. I'm originally from the Orange County area and have been in DC for 5 years, I'm ready to move back home but I can't find any Wholesale or properties in need of rehabilitation that will allow me to get back to the Irvine/Newport Beach area at a decent price. I go to OC one week a month for work and I'm only seeing overpriced deals in the nice areas of South OC, and market rate or just above market rate in areas like Westminster, and Santa Ana, these use to be the go-to cheaper neighborhoods. I'm getting so frustrated I joked with a friend about funding a Wholesalers marketing campaign just to get a property in the Irvine/Newport area since that would be cheaper than paying above market rate.

@Addison Fields the strategy you're referring to will require you to hold a property for at least two years to avoid the 15% capital gains tax, this strategy will not work for what you've described

@David Roberts With the metrics you've listed, you're better off going with properties in the lower-end of Northeast, DC maybe Deanwood or near that area, I've looked at Baltimore in that price range and the rents are better in DC when dealing with the same class of property and/or renters. If you're stuck on Maryland, the neighborhoods just outside of DC will produce similar results.

@Gilbert Lugo "The deal is at a stand-still because the owner is asking for the highest Comps in the area" It sounds like the seller is testing you, How does this property compare with the properties of higher Comps for the area? Do the comps have high-end finishes and so does the one in negotiations? There are a lot more of these little things you have to look at when a seller is asking for top of the market pricing, sometimes a seller will test a buyer and possibly make some extra money. I'm also assuming this property is 100% Turnkey since the seller wants top market pricing? Lastly the most important part of the deal isn't what the owner wants on the price, it's what is the property worth, and are you willing to overpay to have it?

@Kyle Davis If your business plan states that you will accumulate as many Buy-and-Hold properties as possible based on the cash flow model, I would just save the excess cash flow to acquire additional properties. If you choose to pay down mortgages, I would recommend one change to whay you've outlined, Instead of paying a one-time annual payment of $6,000 at year-end, I'd suggest making the $500 payment monthly, It will reduce your principle balance faster than if you were to make one payment at year-end.

@Dhanesh Kumar I think your post is missing some clarity, Is this a post asking a question about these properties or did you accidentally post your solicitation for sales in the wrong area of the site?