All Forum Posts by: Chris Clothier

I'm looking from a 30,000 foot view and I do not currently invest in the area.

From what I can find, I think a commercial investment there, depending on the specific property, might be a great opportunity.  The area itself is definitely in the path of progress. There appears to be a great deal of activity.  Looks like a little north of $100million in econ. development and a couple of city centers that are the focus of a lot of development over the past year.  I would anticipate an area like this to be popular in the next decade for job growth due to so many companies locating and relocating jobs to Texas from corporate offices to warehouses, logistics, and distribution.  It is located right in the middle of a free trade zone.

Again, I don't actively invest in SFR or commercial in the city, but I do love Texas for investments and specifically for the way they handle taxes and what those taxes are used for. If you can find an opportunity that pencils out promisingly after your due diligence, then I would not have reservations about making a commercial investment there. I think an investment allowing for a tenant service provider to the people of the area (think multi-tenant strip center, single-occupant medical) may be a great opportunity. I can imagine there will be a lot of competition driving cap rates down, but that does not mean the investment or area is not strong. Do your homework - but I do like the area.

Gregory,
You specifically mention secondary Texas markets and I don't operate in those markets.  Most of our properties are A or B spaces.  Talking areas, I would say on our office spaces, we don't operate commercial is middle tier areas.  However, our A office spaces in the DFW market place are not suffering the same negative pressures on values or rents.  Refinancing is tighter, but also competitive which allows for negotiation to fid the best rate and terms.  One of our properties, although a B office space, was still a value add property.

Don,
If I can help in anyway or share resources on your Memphis property let me know. 

Same as in Dallas, our commercial properties are not seeing 50% reductions in rents over the past 4 years.  We are primarily in A class, B class and single-use office space such as small medical or service office spaces.  We have an A class property where we saw a strong increase in a large space last year and the term was 10 years with a 10year option on both sides with built in increases.  We have another space that is coming to market lower and possibly much lower when we sign a resident into the property, but there are reasons such as size and location and possible use of the space.

Our value add locations continue to rent strong.  Not saying you are wrong, just pointing out a lot of it has to do with location and use of space. If I can assist in any way, let me know.  

For OP, I think value add space is absolutely alive and kicking, but much if it depends on the same age old factors as location, location, location and your ability to creatively present your space to fill a need.  

@Remington Lyman

I guess part of my point gets lost in the fact that it is a two-dimensional forum.  BP is not the same company as it was when it was owned and operated by Josh.  There was a real community feel to it and decisions were made to protect and grow the community.  My surprise at it not being taken down is more of a commentary on how different BP is today.  I would not have been surprised if it were taken down to protect the brand before the community.

I assume when you say this is not an attack on BP, you mean the people.  The title is about the downfall of the forums so it is a pretty damning topic name.

@JD Martin, you are correct that change is inevitable and people will come and go naturally.  In my opinion, not enough has been done to keep some of the most popular voices in the forums active and engaged.  A common complaint, for lack of a better word, is that there is not enough carry over from the forums into the products like the podcasts ad live events.  There are some fantastic commentators who have years of wisdom and experience and yet, they are no where to be found on the podcasts and the yearly event.  For that reason, a lot of people that would attend or would listen in or would comment more in the forums, simply don't anymore. 

@Remington Lyman,

I'm surprised this post has stayed up this long.  

I'm late to the conversation because I only log on once or twice a week now, and if my name or company name is not tagged, I rarely have much to add anymore.  I wrote a longer post and deleted all of it after reading it.  

I used to love coming on the forums.  I liked the back and forth and the comaraderie that could be formed if you were willing to have a good, engaging debate.  There was a time when the site was great, but to be fair, the site has been losing value for posters for a long time.

 I appreciate the shout-out.  Happy to help point you in the right direction if needed.

I am not 100% sure if @Mike D'Arrigo is still operating, but he was operating out of KC and  Indianapolis. I've met Mike a few times and have never heard anything negative about him or his operation here on BP.  Additionally, consider Texas Turnkey Properties.  Shawn and Joni Wolfswinkel.  They are a husband/wife team with a good-sized company operating in Houston and Albuquerque, NM.  Same thing, never hear anything negative on their operation, and I have met them several times at different industry events.  They are good people. 

I may be forgetting about a company or two, but the reality is that there are not many high-quality companies out there with a reputation, scale, and historical performance.  That doesn't mean there aren't quality TK companies, but there are few that possess all three of these characteristics.

Thanks for the mention @Jay Hinrichs and @James Wise.  I operate on a fairly simple premise when handling issues, which I have adhered to since 2009.  The customer is not always right.  In fact, they are often wrong.  Yet, they are always the customer.  As long as I am providing a service, it's my obligation to respond to both the positive and the negative feedback.  Sometimes we are wrong and certainly not infallible, so it has to be acknowledged. Sometimes the investor is wrong, and in some cases that has to be acknowledged too.  On a side note, I appreciate the way @Zach Lemaster handles his business here on BP.  In much the same way, I see him deal with the good and the bad head-on and with a chin up, which speaks volumes about intent.  A company that intentionally wants to be great even if it means a little less profitable or doing hard things like admitting fault, covering the costs of a mistake, or even calling out an investor in the wrong, is a company worth doing business with, in my opinion.  

A few comments on what I've read so far:

1.  You can absolutely lose everything in real estate.  As Jay noted, there are scenarios where you can lose everything in a hard asset.  For me, the number one rule is never invest in real estate with money that you absolutely cannot afford to lose.  If you follow that rule, then losing sucks, but it doesn't alter your life.  I've lost on multiple investments and always learned a lesson and immediately applied it to the next investment.

2. We have looked so many times at syndications and may offer one on an SFR portfolio that is currently balance sheeted. Maybe. Either way, it is a different animal from managing investment portfolios. There are pros and cons, which is why we are unsure; there is also a real risk to our own reputation if we do not perform. Therefore, it is not something an operator or investor should undertake without a thorough understanding of the risks.

3.  Lastly, and for me, this is the most critical point in my opinion...

BP is not a good barometer of people.  

Never forget that one of the more famous implosions on BP only occurred after the person was featured on the BP podcast. That transfer of credibility led to hundreds of investors buying and some suffering incredible losses. If I'm not mistaken, several of the names Jay mentioned were on the podcast.

Just because someone is on the podcast does not mean they are a good investor, opportunity provider, company, or morally centered.  Just because someone has a high number of posts or votes or both does not mean that they give good advice.  Having a high BP or Google rating does not mean they are trustworthy.  And, just because someone was featured on, participated with, or worked for BP, it does not mean that they are skilled in business and will provide a great return.

BP cannot be held accountable for the due diligence that investors must do before parting with their hard-earned dollars.

I'm the first person to advise investors to take nothing on faith - even when deciding if REI Nation is a good fit for their needs. Due diligence is an absolute must, and patience is a commonality amongst most investors who post the best advice on here. A vast majority of our investors have never met our company or seen their investment. In truth, they are lucky we operate the way we do. Not a month goes by without us speaking to an investor who has used the same approach with another investment from another company and now seeks our advice or help because they were either scammed or misled. It happens routinely. Not everybody can or wants to operate with high integrity.

So, hold us all accountable if you're going to do business with our companies or us individually. BP ratings and Google ratings, along with posts and votes, are certainly earned and often deserved. However, I believe that all reputable companies, including REI and Rent to Retirement, would advise investors to conduct their own due diligence and not blindly invest. Please don't take our reputations as a stamp of approval that negates all risk. Our reputations are earned, but ultimately, there is risk, and each investor is responsible for their decisions.

 Joshua,

I suggest you create a separate thread or post, and be more specific about your location. Southern Cal is a big area, and there may not be alerts set up specifically for that phrase. Use the city you are located in and ask if there are any investors in that area who have invested out of state successfully that will share the successes and failures. Ask them to share the reality, including the mistakes and pitfalls. I'd also specifically ask if there are REIA organizations or meet-ups in your specific city.

The more specific you are with the help you want, the more likely you are to receive it.  

You should be patient and avoid making hasty decisions or investments.  You took a significant first step in seeking other investors. In my opinion, you should refine that search a bit to get connected to local investors who can give you their advice and maybe even referrals or recommendations, both for whom to work with and more importantly, who to avoid.

Best to you -

 Max,

I appreciate the mention in your post.  I'm not sure if you found my family's company through research or a referral, as we have several dozen clients on the islands. However, the mention suggests that, at a minimum, you've done some research and reading and are prioritizing who you will work with, rather than where.   

It is challenging to travel to Memphis or any other Midwest market from Hawaii, but my advice follows along the lines of @Nicholas L..  Too often, investors don't take the time to confirm who they are working with and spend time determining if their perception of who they are investing with and where they are investing aligns.  Investors also need to see for themselves, and often it only takes a dose of common sense to determine if their expectations can be met by what their eyes see and their ears hear.

My advice is to spend a small amount of your capital and visit whoever you are going to work with and see for yourself 'How" they will meet your expectations and 'Why' you should pick them as a partner.  Call it due diligence, and you will be grateful you did later. In the long term, investing your hard-earned capital is a small expense compared to the cost of entrusting the wrong team with a bad investment.  

What type of investment property you choose is going to come down to how you feel about who you are going to do business with.  You will get a multitude of opinions.   I would suggest patience, high accountability, and the right investment will be obvious.

Best of luck to you!  

 Absolutely!

@Mike D.

Hopefully you read this comment.  No need to respond, just wanted to point out a discussion I had on here years ago with @Joe Villeneuve.  I like reading his comments, respect his opinions, and consider him a pretty direct responder.  I also consider him a smart and likely successful investor.

In so many words, he told me I was a poor investor, leaving return and opportunity on the table. I had shared that I am not a fan of long-term leverage. I am risk-averse when it comes to leverage. I use leverage to acquire and look to get rid of it as soon as possible. I love taking risks when my money is on the line. I have a healthy risk appetite. However, I structure my investments to minimize principal in the shortest amount of time, opting for cash-flow neutral positions or those with negative NOI in both cash flow and appreciation plays.

His point was that TVM meant I needed to stay as leveraged as possible. My returns would be higher, and I would either have more cash available or build a larger portfolio.

I am paraphrasing because it has been a while.

He was right. I told him I understood his points and agreed with him. However, I was not going to change. I had my reasons for investing the way I invest. I've had to sit with lenders and explain that I needed them to work with me to restructure or negotiate debt terms. I will never put myself in that position again, so I created my rules for engagement and follow them. I am properly capitalized, have a strong LOC position on my equity, and have been hitting home runs by my definition for the past 15 years. Still, he wasn't wrong when he was looking at pure math.

I've been told many times that I am foolish for the decisions I make as an investor.  I'm good with that.  This place is two-dimensional, and I am rarely offended here.  Intent is hard to figure out.  I've been attacked personally and the intent in those posts is plain to see, but I consider those people weak and ignore them. I could not care less.  However, I'm never offended by other investors discussing strategies and how their math is better than mine.  I've learned a lot from other investors without putting them on pedestals.  I can learn without capitulating.  I'm not going to change how I invest at this point, but I am certainly open to adjusting later and have a broader view of how to be a successful investor in case I do adjust my strategy.

Best of luck with your portfolio.