All Forum Posts by: Chris Clothier

Mary Joe - When I read back thru your thread it sounded like you may be leaning toward self management (you mentioned preferring tenants who will do direct deposit). I'm not sure if that is the case or not. Let us know if that is correct and I can share some questions to ask when it comes time to locate properties.

There have also been a lot of comments here mentioning price and you noted several questions about lower prices. If you are a conservative investor and looking for stability rather than simply a nice looking paper return, in my opinion you do not need to be looking at the low price points. I personally would prefer that an investor looking at a very low price point that comes with a lot of challenges be a local investor who fully understands those challenges. That would be my personal advice for someone asking me about buying that price point in Memphis. I don't deal on the lower end of the price range anymore just due to inconsistent occupancy and on-going maintenance that usually occompanies a super low price point.

If you are open to a higher price point (you mentioned $400K) and are not married to the idea of single family homes, I would reach out to Joel Owens. He commented on this thread earlier about Atlanta. he is a great resource for investing in multi-family and commercial and was very helpful to me when I reached out to him with questions.

As far as Memphis and Dallas, the two markets I know best from my companies, I know you can reach your goals. They are stable markets from a long-term economic standpoint which is important for an investor looking to use the buy/hold strategy. As far as the multi-family opportunities, I like Dallas, though I'm not as enamored with those opportunities in Memphis even though they do exist. They simply come with a lower rental rate and tenants who can only afford lower rental rates tend to present another unique set of challenges. I simply like SFR's in both cities, but I too am reviewing the opportunities that multi-family present in both cities.

Whew! That was long! Your are doing great by looking around and asking for feedback. As you really start to narrow down, don't hesitate to ask any other questions on specific markets, companies or even properties as you get ready to buy.

Best of luck to you - Chris

Bienes Raices - I'd agree with Bill and Kyle. No need to put too much thought into it beyond maybe asking a question of your insurance company. Beyond that, hire a guy to cut and clean the lawn and don;t worry too much. Probabilities are in your favor.

William H. Good to see you jumping in and getting involved here on BP!

Pretty good insight here: "Memphis seems like it's far too spotty for a new outsider."

Don't hesitate to reach out and ask any questions you have about the city and investing here. I can help make sure you are pointed in the right direction as you get started here or at the least shorten your learning curve about the city.

All the best - Chris

Cody Croslow - I am going to echo a few of the sentiments on the previous comments especially J Scott, Will Barnard and Josh Dotzler. Only you can determine if a coach is too expensive for your needs. Only you can determine whether or not you even need a coach to truly reach your potential. Lastly, only you can determine if you are going to commit yourself all-in to make every dollar you spend whether it be on education, coaching, a property, etc... worth what you are giving up. I'm a big believer in surrounding myself with people including coaches who can have a profound impact on what I am hiring them to influence. So I calculate the cost vs. what I fully expect to take place with their influence and the return I will get.

So often we are willing to justify overspending on everything in our daily lives except when it comes to our own success. We'll forgo a .10 cup of coffee brewed on the kitchen counter for a $6 cup because we value the brand name on the side of the cup. Consider that when you are thinking about how much you are willing to spend to shorten the learning curve as you enter the world of being a full time investor. How much do you value your own brand? If you are willing to follow the steps someone gives you and make sacrifices elsewhere in your life to get your goals then it may very well be worth it to hire this coach. In the end though, only you know if you are going to commit and follow thru and so only you know if your $8k investment will have a huge payoff or be a complete waste of the money and both his and your time.

The PRO account was one of the best decisions I have made since joining the discussion on Bigger Pockets. If you are looking to build a brand or raise your profile, I would absolutely recommend that you upgrade to the PRO account.

If you are looking to network and try to find some great ancillary services or partners to work with or maybe just develop possible future colleagues, the PRO account will be invaluable. I don;t work for BP, but I have written a lot in the past on how good this site has been for me personally and also for my business, so when I saw this post, I wanted to jump on and throw my .02 cents in on it.

I personally think this is a great value if you are on the site and being active.

Chris

Mary Joe - I really like the Memphis market, the Dallas/Ft. Worth market for long-term buy/hold markets. I am also starting to invest in Nashville in Tennessee and researching Austin and Houston over in Texas.

Your question about Cash Flow has a lot of other detail that you should consider and maybe share before really knowing a market that fits your goals. Are you talking Cash Flow as a creation of using leverage? If so, you can find cash flow just about anywhere. It all depends on what price point you are looking at, what your risk tolerance is and how much you are willing to put down. I have been researching markets for a long time and thru my success and failure I have come to learn that the properties themselves and finding someone to help you if you are investing out of area are really secondary to researching a good market that fits your long term goals.

Every market is going to offer something a little different whether it is good opportunity in SFR or multifamily or good opportunity for short term investing while others are good for long term investing. You really have to know what your expectations from investing are and then find a market and/or strategy that fits those goals.

Good luck with your investing - Chris

Steven Hamilton II -

I read this thread the other day and was going to respond with the @messenger to you. It's funny how over time you start to recognize that some questions need to be answered by the resident expert!

I agree with Jeff S, especially on the part of not doing my own dental work! I have an accountant that I meet with monthly and then a CPA who prepares my taxes, but I can meet with him throughout the year just to make sure whatever plan he put together for our taxes is still on track. I own several companies and a nice size portfolio of property so I want to make sure the accounting is done right, which means I don't do it. It doesn't have to be expensive, but I would suggest at the very least meeting with an accountant or tax preparer to make sure your plans for your tax moves line up with their advice.

As far as on BP is concerned, Steve is one of those guys on here who knows his stuff and there are several others who together make up a group of really good advisers. i for one pay attention to their answers!

Jeremiah B. -

The contract between you and the property management company should come with a 30-day cancellation clause and if it does not, I would think nothing more than a form letter stating your intent to take over the lease would be required.

Of course, I haven't read on here if you were planning on taking over the lease yourself or moving it to another PM - it does appear you were planning on moving it to another PM(?). In that scenario, if your new PM company is a good one, they will have a process already in place to transfer a lease and all of the legalities that go along with it such as notifying the tenant, collecting due and back-due rents as well as transferring the deposit to a separate account.

If you are planning on managing yourself, even short-term then let us know and I will respond back with some other steps you are going to want to take to protect yourself. Steve Babiak is exactly right on the transfer for the tenant. Unfortunately, this wold present a good opportunity for some tenants to not make payments or hold payments in lieu of repairs. Confusion in management just lends itself to lost rental income.

I agree with everyone else on the part of the 12-month lease itself. Unfortunately, the property management company is the legal signer on that lease and they entered into a 12-month lease with the tenant -even against your wishes. I don't think there is much you can do there except honor the lease unless the tenant breaks it on their end.

Chris Reece,

Welcome to BiggerPockets! I love the great attitude and the willingness to jump right in and start investigating. This is the best site by far to connect with other investors and opportunities as well as to get good unfiltered advice.

I wrote an article flor the BP blog a couple of weeks ago and one line you wrote in your response above really hit home to the point i was making:
"Unfortunately it just doesn't take much being 80% leveraged to knock your profits to zero." You were spot on with that comment. So many investors don't get that when talking about "cash flow" property.

The good news is that you have an income stream that allows you a lot of freedom with investing. You can look around and diversify as an investor and not everyone has that luxury. I think it is very wise to investigate every opportunity. Also, be real clear about what you long-term objectives are with investing. I personally have a portfolio of properties, but I also invest in other ways. Some is for long-term wealth building and some is for short-term high yield. Either way, always consider what your long-term goals are when putting your money to work.

Being a large company here in Memphis, I can only offer you my support and help in any way - and I would do that for any investor who asks for help here in Memphis. I think you have a very good outlook, but if you wanted a second opinion on rental rates and your 2nd year expenses I would be happy to help. As with any investment, you should not be expecting a lot of deferred maintenance, but especially not with a turn-key property. I really like the Memphis and Dallas markets and I can say that I dont agree with simply chalking up problems with a memphis investment property to "it's just memphis". I do think a lot has to do with management. A bad management company can make a good investment go bad very quickly. I'm not saying that is the case here, but I would be happy to put another set of eyes on your properties if you wanted that opinion. I look forward to connecting with you soon.

All the best - Chris

John C -

It is funny that you posted this, because I think it is a common feeling for a lot fo investors. There are certainly parts of the process that we enjoy and parts that we do not. I do not like being a hands on investor with the renovation or the management, but looking for and researching I love. I also really enjoy talking to other investors, which believe it or not, is a big part of being an investor - sharing your story.

Sometimes people are surprised to hear that I buy the same way I support other investors, through the turnkey process. I use the same services from my company that other investors use and I have not personally seen the last 3 properties I have purchased. That is not part of what I enjoy. I researched them and made the final call, but I left the parts of the process I didn't like to those that are better at those services than me!

Good luck - Chris