All Forum Posts by: Chris Clothier

So I have seen the emails and read the forums, but I allowed the holidays and end of the year wrap-up work to keep me from really focusing on the new Key Word Alert system that has been set up in Bigger Pockets. It took a quick holiday greeting call today with Josh Dorkin for me to understand the power of the new system - and a little bit of hazing from him for me being so slow to implement!

I have become so accustomed to using the search function every time I log on. Josh pointed out that rather than logging on and searching for the terms I follow I should enter the search one time in the Key Word Alert system and then Bigger Pockets will alert me every time those terms are mentioned in the system.

This is a huge time-saver and upgrade for Bigger Pockets and I really look forward to it helping me get even more engaged. I want to join the conversation as soon as terms that matter to me are mentioned on the site and add my advice or answers to those that need them as soon as possible. Thanks to Bigger Pockets for always working to improve the site! Looking forward to a big 2013 and Bigger Pockets is going to be a major driver of our success.

Daniel L. - Your profile says you are an investor in Texas, why the question concern about investing in Memphis? If you are wanting to do projects in Memphis, but live in Texas, then the Hall Tax does not apply to you unless you plan on living in Memphis while doing your projects and that amounts to greater than 6 months of the year. Otherwise, it does not apply to you.

Damn Glenn Espinosa - You are too smart for me and I didn't realize Googling the comment would reveal the name. It is never my intention to embarrass anyone - just to use the example as a good teaching point.

Joshua Dorkin and I had just talked about this on the phone last week. There is nothing more important than how you conduct yourself and your business. Your image is everything and the web is so permanent. In Josh's case, an email is absolutely permanent. It is crazy how many people don;t really get the point of all the outsourcing advice. You keep the most important tasks and outsource the tasks that make you more productive!

Glenn, I do appreciate the kind words in the last sentence. Thanks. We have worked very hard and are very protective of our reputation and our image.

There are a lot of people who will tell you that hiring a VA (Virtual Assistant) is a great thing for your business. When they do, ask them what they have VA's do for them? DO NOT hire a V.A. to post on the internet, on blogs, on social medial sites or on forums soliciting business or you. DO NOT have a V.A. post under your name leaving yoru website everywhere connected to silly comments clearly written by someone working for $2 an hour with little command of the English language in hopes of building back links! If you want to hire a V.A. - hire them for menial tasks and research. If you want to build an online reputation as someone who actually knowswhat they are talking about, then you need o do it yourself. You cannot hire this our to a Virtual Assistant and expect to be taken seriously.

Case in point: I am reading a real estate economists' blog this AM and the thing is littered with spam comments seeking to get backlinks for a well known real estate personality. I'm not sure if this guy is a guru or not and what level of respect he gets does not matter to me. I can tell you that if people read these comments, it will definitely go down over time:

hi,Nice posting.it would be more interesting and informative to us.we have news about
real estate investing.visit: (removed for his sake!)

This is attached and posted from this persons online persona attached with his gravatar. It is followed by three more comments by the same VA and all three suck as bad as this one!

In marketing, it is a major pet peeve of mine when people outsource thinking they are following the Time Ferris model and they end up looking like Ferris Bueller.

Wai Fung -

Excellent - if you feel comfortable and have the data and info you feel you need, then regardless of what anyone else says about investing away from home or DPW in particular, go for it. The best thing you can do is research and ask the tough questions. No one else is going to do it for you. It is your money, your future and your investment - so investigate and prepare, then either get stated or keep looking.

Best of luck on your investments -

Chris

Jake Kucheck and Steve Cook -

You are both correct and in the Memphis market, one funds plan includes buying properties doing very little work placing a property management company that they control over the properties and selling the monthly cash flow to AIG (that was there state intention, but they gave no indication that this was going to take place).

We have dealt with this the same way we always have. 1. Make fair offers 2. don't over-pay for anything 3. Never back out of a signed contract. There is not a whole lot else you can do. You have to continue to operate the same way you always have just taking more time to make sure you do treat everyone you do business with better than an out of state large fund would. From what we have seen and heard, it is going to be difficult for them to make the return spreads that they were hoping for, but they could have us all fooled. They may only be looking for net 7-9% return and that may be an easy sell to risk-averse institutions.

We have also seen them buying a lot of property that simply doesn't meet the standards of many individual investors and certainly none that we would purchase or sell to investors whose properties we manage.

So we will see ultimately what effect it has on our market.

Joel OwensHi Wai Fung -

Smart move on your part to come to BP and post a forum question. I can give you a couple of pointers when buying out of area, but nothing concrete on the actual company you are asking about.
1. Always remember that due diligence and time are your friends when buying away from home. It may seem like all the "hot deals" are going to disappear, but they are not. Be patient and educate yourself on the market you are wanting to invest in (economy, growth in jobs, growth in population, demand for multi-unit housing).
2. Only when you know that St Louis is the right market do you move forward with a team that can assist you. You may find that St. Louis is not the right market for your goals when buying investments.
3. There are a lot of factors that come into play with a good team in a far away city and most of them you will have to dig out for yourself. And, most importantly, until you have a history with a company, you cannot take anything they say (marketing, promotions, spreadsheets) on faith.
I run two turn-key companies in two cities and this is the same advice I would give any investor wanting to find out about one of my companies. Until you have a high comfort level, you have to dig deep and investigate a market and a company before you can invest. And you never, ever start with the property. That is the last thing you look at. Look at the city and the team first, then look at properties if you feel it makes sense.

Last note - hit up @joel owens before you buy multi-family or commercial or triple-net lease stuff. He has a world of knowledge and experience and may be willing to give you some advice on what to ask and look for before you buy.

David -

You could try a private mortgage to establish a lien against the properties and then do a rate/term refinance. Essentially the same thing as you stated just not
Going the route if commercial financing on residential properties, which I would think may be tough.

Ed O., I think that is a tough conundrum. I have been looking for a reason to use that word for a long time! Sorry -

If the list of items are minor the question becomes why not fix them. If they are major, then are they so major that you should disclose them even if you are not required by law. I wrote about this on the BP blog a couple of weeks ago http://www.biggerpockets.com/renewsblog/2012/11/06/full-disclosure-real-estate-deals/ titled "Does Full Disclosure Kill Real Estate Deals of Build Character or Both?" I think that the real answer to this lies within the seller and how serious they view the list of issues given to them by the inspector. If a seller is willing to let a deal fall apart by not fixing them, is he/she willing to let a deal fall apart by disclosing them?

As far as the legalities - I will leave that to someone on the site who may have experience in that.

Bill Gulley - I can't say thanks enough for the detailed reply. That type of insight is excellent and a great point of view. I think there is a lot to be taken from projects like the airport redevelopment that are not always apparent. For instance, I mentioned the government and their attitude toward moving a city forward. It is my opinion that local governments and their actions should matter to real estate investors. Then again, no real estate investor should simply decide to invest in a city because of the actions of local gov. or public works projects. It is one small piece of the puzzle.

You brought up great points about the personal decisions investors make about proximity investing which is certainly the next step an investor has to take when deciding to invest in a city.

Big thanks again for the response. I definitely think investors should be aware of the direction of a city first and the specific numbers of an investment property second.