All Forum Posts by: Chris Clothier

Blair, Are these the cities where the owners owned property or the cities where the mailed recipients lived?

Chris

Mark Ferguson - Nice blog and good article. I can tell you and even J Scott that the best thing for me about writing a blog or even writing articles for Bigger Pockets or Niche Report is that it becomes cathartic. It is a great way to rehash the good, the bad and the ugly in a truthful and often thought provoking way. And I could not agree any more with both of your statements about how much better of an over-all investor and even business person that process can make you.

Good stuff -

Hey Joe -

Welcome to BP! As someone who has faced your questions and I faced them when the economy was good and the real estate market was booming, I would pay off the mortgage of the existing property and increase the monthly dollar return you are getting. The percentage may not go up, but it sounds like you are not concerned with percentages - you are concerned with cash flow.

I would say the exact opposite of the advice to buy more with leverage as a hedge against future real estate properties. Properties with mortgages are not easier to sell nor are you able to cut and run for fewer dollars. The dollars you have invested are exactly the same. The difference will be that you own your home free and clear and are not worried about a financial issue if the market tanks. You will be concerned with can you keep the home rented for the same rent each month. You would have a free and clear performing asset that you could leverage for at some point in the future if you needed to or sell without the worry of a lein to pay off. You would have greater flexibility.

In my opinion, just based on what you wrote, I would pay off the existing mortgage, enjoy the cash flow and maybe start saving for another down payment on a second property in the future.

All the best to you -

Chris

Shea Stringert -

Do you see a lot of bandit signs in the area you want to invest? If you do, you can assume (although not always 100% correct) that they are working and that other investors use them to drive leads. If you do not see bandit signs in the area you want to work, then again, you can assume that they do not work or that the municipality is pretty stringent and people have learned their lesson.

They are not allowed in most municipalities around the country but are still used because they are cheap, effective and a good form of creating an image. Remember, that does not mean the image will be a good one. But in a lot of areas, mine included, there are many more pressing issues that the gov. faces so enforcement is secondary at best.

BTW, we do not use bandit signs.

Chris

Mike -

I would agree with Bill Gulley on the advantages, not just because you are new to investing, of using a buyer's agent. They are incentivized to work quickly and on your behalf which are two things that will work in your favor as you actually progress from viewing to offering to placing a contract and closing. You really need someone who works solely for you in that process. In my opinion...

Good luck - Chris

I have found it tough to make money near the University of Memphis because the rent ratios to price do not pencil out the way they do in other parts of the city. The prices are too high and the rents are tough to get and maintain. Other investors may do very well there, but I prefer to be in the suburbs and in areas where there is more demand for stable, family homes.

Good luck to you -

Chris

Yvonne Sheehan - Welcome to BP! You've found a great place to network, ask questions and get to know other investors. I can tell you that Memphis is like any other mid-America city. It is a great place to invest in SFR, but in every city you have to be careful, do your homework and get to know who you are working with.

Don't be in a hurry. Memphis has been a much-talked-about investment city for some time, but that does not mean that the deals are gone and they will not be disappearing anytime soon either. You have plenty of time to be thorough and to really dig into the city and your investment strategy. If you are patient, it is a great city for investment.

Best of luck to you. Don't hesitate to let me know if I can help you in any way.

Chris

Hey Freddy -

Welcome to BP! I had never heard of the company and a quick search online showed that the company and owner are in San Jose, CA. Not much to the site, but the owner seems to have a good back story from what was shared. I would recommend reaching out to Geraldine Barry who runs the San Jose REIA and maybe even Lori Greymont who has an investment company located there in San Jose. You should be able to get their info by doing a Google search. They may be able to give you a good, independent, 3rd party opinion.

I have their contact info that I can PM to you if you cannot find it and want to check with them.

Good luck - hope your purchases turn out to be what you expect! All the best -

Chris

Joe - I take no offense and know you are not trying to be an *** and like I said, I'm not really part of this conversation...BUT, I listened to the tapes tonight and I absolutely made a mis-statement of fact over the length of time and the percentage of population decline. I then do a very poor job of tying back in the shrinking of the size of the city. Listening I remembered back to how rushed I felt during that talk with such a short time to speak, but that is not an excuse for getting data wrong.

all the best to you guys up there -

Chris

Clay Huber - that was funny!

Joe Delia - I will re-listen and see how I phrased it. If I spoke incorrectly during the talk, then I will absolutely own up to that mistake. But my talk was not about Detroit. My talk was about doing your proper due diligence and making sure you know where your buying and who you are doing business with. My talk was about how to look at a city from an economic standpoint - especially when you do not live there. It was titled "Doing Proper Due Diligence in 2012" and was aimed in particular at investors who buy out-of-area. When I used Detroit as an example of a city I would not invest in after looking at its future through an economic lense, my information was based on Mayor Bing's plan to reduce the actual size of the cities infrastructure and services by 1/3 or more and consolidating the population into roughly 9 neighborhoods encompassing 45 square miles. That is a shrinking city. He cites as his reasoning for this plan the "sharp decline in population" and "neighborhoods where as many or more than 80% of the properties are vacant amid high unemployment". And the city had a documented decline in population of 25% between 2000 and 2010 and nearly 40&% between 1990 and 2010. The population actually sits at its lowest level since 1910. But, like I said, if I said a 50% decline in population over the last 5 years I was incorrect. It appears that the city wants to shrink tis footprint by almost that much, but that is not the same thing as population decline.

I have been to Detroit - albeit only once - to look at the city for investing. I was not comfortable there with the city and was not comfortable with the future. As an out-of-area investor, I was not interested. You guys though know the city well and how to make money there so I have no doubt you love the place and want to see it succeed.

Here are some of the articles I used along with the ones cited above to have an idea about the city and it's future and each cites both population and infrastructure reduction:

http://newsfeed.time.com/2011/03/24/vanishing-city-the-story-behind-detroit%E2%80%99s-shocking-population-decline/

http://usatoday30.usatoday.com/news/nation/census/2011-03-22-michigan-census_N.htm

http://www.urbanophile.com/2012/02/21/the-reasons-behind-detroits-decline-by-pete-saunders/

I applaud everyone's in-depth knowledge and passion for the city and hate that I am in this conversation, because I am not one to bash anyone or companies or even cities. I just laid out my thoughts as an out-of-area investor and still stand by that today. AND, I am an ardent defender of my own city and there are plenty of people that do not like Memphis as an investment city and that is ok as long as they use stats and reasoning to come to that conclusion.