All Forum Posts by: Chris Clothier

 Happy to share lender recommendations, but they are not in Memphis.  They are national lenders that specialize in working with investors and especially those that are passive.  If it is ok with you, I will have someone reach out to share those and make sure they are the right fit for you.  If none of them work, feel free to reach back out and I can recommend others.

Best - Chris

I dont use alphabet codes because it is easy to get the wrong idea one way or the other.  I like the area for single family homes.  The townhomes over there may look a little rough but they seem to always stay rented.  So they are in demand.  It is not a new area so maybe c+ to b- based on the way most investors discuss areas.  It is median priced for median income so I think you're safe.

Our management team says newly renovated in that area is 1495 for a 3/2.5 townhome and we would price in $25 to $50 bumps every year to every other year. Not newly renovated may fall as low as $1250 so you have bit of a range depending on condition but I would be comfortable telling an investor that $1350 seems doable if you keep a nice property and rent bumps are certainly part of the plan.  Good luck if you decide to move forward on it!

You would be on the main road Crestridge which is better than being at the back of the area.  That rent seems very high for a townhome in that area.  I lived on Littlefield cove in a very similar sized unit.  The pictures reminded me of our place.  Personally, there is a lot of deferred maintenance in the pictures so I am not enamored with it, but if you can verify that the rent is a current rate and would remain there or above, then the pricing is close.  You have a good bit of work to be done if you want to have a place that will be in demand, so build that into your pricing, but all in all it is not an absolute no in my book.  

We manage properties in this area and I can have our team research and give an idea of what we think the current rental rate is in that area.  It could be spot on.  Happy to help.  Good luck - 

 As a general rule, 38119 is not a bad zip code.  Areas however do matter.  I used to live in Green Lodge Townhomes and my brother owned one.  I am not sure it was named that back in the mid 90's when I was there.  Today, the townhomes are rough.  It has been a bit of time since I last drove through there, but it is right on the edge of an area trying  hard to make a comeback.  There is a strip center with some new construction right there, but no real long-term services yet.  A grocery store and a few restaurants nearby and easy access to the highway.  You are 1 mile form the new Top Golf and the apartment complex directly to the south is nice for that area and new ownership has cleaned up the appearance.

All in all, if you are talking the townhomes specifically, they are old and run down.  My worry would be about the appearance of the rest of the area as opposed to my unit.  Depending on numbers it could be great, but just know there are challenges right there.  If you are talking multiple units, possibly the whole complex, then you have a chance to flip the area and provide something great.  Good luck either way.

 Are these companies you are asking about or operation terms?  Any additional insight would be helpful.

Jorge,

Please forgive my directness, but based on what you've shared, no one can give you any real advice and asking a question like this with so little info, is akin to standing on a street corner and asking passerby's if they have any ideas for retirement income.  You have no idea if you are going to get any advice that actually fits what you need.  It's just noise right now.

You are in Yorba Linda, CA.  You are within a quick drive to one of the few areas of California that you can invest in rentals and have reasonable expectations to make a profit in yearly income and get appreciation.  Riverside, Beaumont, Hemet, San Jacinto, etc...You're right next to the Inland Empire.  That is fertile ground for a lot of commentators here on BP.

Plus, if you create a thread asking who is near Yorba Linda and invests actively or passively, you will get a ton of people respond. Ask if there are REIA groups in the area (hint: there are many) and then go to them.

When you find local investors ask them if you can buy them lunch, coffee, a beer - whatever and pick their brain.  Don't give everyone everything, but find a mentor or an experienced investor you can talk to face to face and that is who you share the details with and ask for advice.  

The good thing is you are in the land of the investor and a huge majority invest passively.  But there are plenty who invest right there in state and some actively and they are the ones quickly replacing their w-2 incomes.  Why?

Because it is very hard to replace active income with passive activity.  It rarely if ever happens.  It takes work and planning to be good at real estate investing - even investing passively out of state.  I have many California clients and I am literally telling you to look locally before buying out of state.  That's not to say don't talk to or explore RTR as they may be your best passive and out of state option, but you listed several different investing strategies and questions and in the end you want to be clear and intentional.  What you have stated as a goal is very difficult, takes time and those that succeed often had the hand of luck on their side. 

Passive income is something that is meant to grow AT THE SAME TIME that you are earning active income - especially when you are in your best earning years.  My advice is to be patient and not go on the forums asking for advice on what to do to replace your income unless you are prepared to get naked and share it all.  Otherwise, no one can actually help you and you are liable to get as many disparate ideas as there are commenters.  You are blessed to live where you live and it sounds like you have a done a great job getting one property and setting yourself up to invest more.  I promise there are investors right here on BP who will meet with you one on one and gladly share their guidance.  If you are patient, the answers will come sooner than you think as will clarity from all the podcasts and books.  Let someone who has achieved what you want to achieve help clear the picture for you and you can then possibly follow in their footsteps.

Best of luck!

 Same goes for untraded equity like ownership of a company.  A well-established company, I'll use mine for example, that has two decades in business may constitute a large part of someone's networth.  It is untradable but not neccesarily unaccessible.  It can be used as I stated above for borrowing purposes and can be helpful in getting better terms.  However, it is not liquid.  

So, a lot of good points brought up in this discussion for entrepreneurs, business owners and investors.  Perhaps part of a net worth calculation should also be how much is your experience worth?  Knowing and understanding where you are, where you're going and how you get there enables you to use your assets and NW to your best advantage and avoid the detrament.

 Ha!  I think you might be a trouble maker!

This is no argy bargy.  I equate this more to my Maltese yapping like crazy at my Bernese Mountain dog every time he comes within 10 feet of their food.  Not a whole lot for him to do unless they really make it personal, lol!

Put your popcorn away because for now I am exercising the Lincoln Leadership method.  I've typed my response and tucked it away in my proverbial drawer.  I'll wait a few days, think it over, get centered and take advice and if I think its still worth posting or needs to be posted, then I'll post it.  If it needs to be changed, I'll change it and if it needs to be deleted, I'll delete it and move on.

One thing it won't be is flippant, emotionally charged, personal or attacking.  It'll be fact based and I'll list the receipts.  I've been defending the true Turnkey industry since before you joined BiggerPockets and I take the responsibility of doing that for so long seriously.  I don't post often, but when I do I try to say something that helps others and moves the conversation.   I want to be patient in case there's no need to argy bargy. 

So, we'll see.  

For those wondering what true Turnkey is, it is what Engelo and I both do along with a few other companies and operators that I truly respect.  We own the process, the result and the fallout.  Good or bad, the buck stops with us.  There are no third party renovation companies to point fingers at, no outside management companies to blame.  Just us.   We don't make you sign waivers and try to silence our critics.  We know we bring value and are attracting our ideal clients.  There are plenty of other ways to operate "Turnkey", but as an old school entrepreneur, I stand by my definition of what it means to be a true Turnkey company.  

Engelo, I look forward to our paths crossing and breaking bread again.  Be on the lookout for another message maybe even thread on entrepreneurship and recognizing your blind spots.  I think it's time for newer entrepreneurs to read about what it means and how to respond on BP when someone shines a light in them.  You are one of the best at knowing your worth and owning as positives what others see as negatives.

Stay well and quit causing trouble!  -  

@Douglas Skipworth,

Like Jay, I am required by lenders to update annually with a rent roll and PFS.  That being said, when I was younger I found one bad habit created by updating and checking my PFS (net worth statement) when I wasn't required by lenders to keep it.

It can be de-motivating at times.  Clear expectations have to be set and an understanding that in almost all cases, net worth is built slowly, deliberately and over time.  Two things can happen.  A person can easily become discouraged by the pace of wealth building and take risks.  Or can they can be satisfied with their current situation and stop building early if they like what they see.

So, it is a tool in my opinion and probably worth a whole lot more as a tool to gain access to capital and better priced capital than it is for anything else.  In my opinion.  Hope you're doing well.