All Forum Posts by: Chris Clothier

Joel Owens - everyone is departmentalized over several companies including acquisitions, renovations, management and realty. The average income of each employee is significantly higher, but you have to remember, that we are in a different kind of business. There is a HUGE demand right now for what we do - or more importantly - how we do it. Tying back to this thread, you have a lot of REO sellers today who are doing shoestring budget repairs to houses and trying to sell them for as much profit as possible. Regardless If they are selling to end buyers or long-term buy & hold guys, doesn't matter - they are still pricing sky high.

So, the point I was making is that we spend a little over $18,000 on a property that a passive investor is going to want to purchase and hold for an extended period of time. We HAVE to do more work - we CANNOT afford as a company to saddle an investor with deferred maintenance. The property has to perform so we have top spend more than the average quick sell company.

So today, we are managing 1,100 properties and just went over 400 investors who have portfolios with us. Those 400 investors all want to build portfolios of 3-10 properties. When you add in the fact that new investors come in every month - there is built up demand - almost like we have reached critical mass. We have helped investors buy 67 in the last 5 1/2 weeks so I think we are going to be able to support the staff for a while - hopefully! Not too worried that demand will end anytime soon as long as we keep concentrating on quality.

And quality starts with a really good renovation where you do not skimp and you do not defer maintenance down the road.

Eric Michaels - It's not me! I have not worked on a rehab in 5 years, but we have 31 full time employees who operate like one heck of a team and they get all of the credit. That let's me do my thing marketing and connecting on sites like Bigger Pockets.

J Scott - I appreciate the props. and you are absolutely correct. Surround yourself with good people and get them to buy into your vision and it is amazing what you can get done.

Joe -

We recently completed a 1031 exchange for a client who sold one industrial property in California and purchased 14 SFH in Memphis. The tax and estate planning that they were able to complete on this transaction made it worth its wait 10x in gold for the client (their words not mine!). You can identify property well in advance of the transition into your 1031. I think it is absolutely worth the time and possible hassle it takes, but in the end, only you can make that decision. If you think you will feel pressure and may make a bad buy, then let the 1031 fall apart. I would absolutely enter into one though to take advantage in the scenario that you do find a suitable property.

Chris

I do not use the 50% rule for purchasing decisions, but am aware that over time, the annual cost of owning a long-term rental will fluctuate. A lot of the cost depend on what work is done on the property (are you deferring maintenance), management (are you managing or paying a manager) and even the question of leverage which Mitch Kronowit brought up. In the end, I assume between 30% and 40% of gross rents will go to upkeep of the portfolio yearly when I own them outright after 15 years. If I am happy with the numbers on the property, then I purchase it. If not, I don't.

We currently manage our portfolio with Propertyware and it works very good, with the exception that it is hard to get customer service when you are a small management company. We now manage over 1100 properties so we get more attention when we have a problem.

Good points by J Scott. We are spending on average $12.50 - $14.50 per sq. ft. on buy and hold rehabs in 2012. We have completed 93 properties this year and are averaging $18,355 per renovation, but the amount of work we get done for that dollar amount is significant and far more than someone doing a few jobs a month could get. There are always going to be little things that can greatly effect amount spent on renovations.

George Ramsay, You should be dealing with two entirely different classes of homes. One that is owned by the bank and will not have the curb appeal, the inside touches or the care of a property that has been completely renovated and placed back on the market. Unless of course, the work done is the bare minimum to try and flip the property quick.

Best advice I can give to someone in this situation is to take such care in the renovation of your property that a discerning would never consider the back property because of the obvious superiority of product provided by your renovation.

As far as hurting ARV, from an appraisal stand point, the two should be considered as apples and oranges and never come into the picture as far as value of your property.

Ann Bellamy & Bill Gulley -

One share a day will make an incredible difference, ESPECIALLY if every other user did the same...

We'll go to work on that and see if we can't encourage and convince every one reading this thread of the importance of that one little action. Social Media is the fastest growing form of marketing x2 and more eye balls on the site is better for all of us.

Bill - I am recording a quick how-to video showing users the ease of sharing the site on social media. Even showing it to friends, family and fellow investors. Simply letting others know what about the site is a really powerful first step.

Bill Gulley - Great point...which is exactly why you don;t invite the media in. The power of the internet is not that the media will see it and say "hey invite me in". You want places like Inman News and CNBC, Fox Business News, Money magazine, AP reporters to know that Bigger Pockets exists. They find out it exists when Bigger Pockets is top 1% of web sites on the planet due to the activity.

Realize that there are over 300,00 unique visits a month to the site. That ranks it pretty damn high. If we are able to get more investors onto the site, create a 'fire' for lack of a better word that spreads and attracts more eyes to the site, then it moves up and writers looking for experts come to bigger pockets. This site is no different than other sources of information. There are those that are new to the game and those that are legitimate experts in the industry and can speak with a sense of authority. The media do not know we exist. I am currently working with a PR firm and what I am telling you comes straight from the mouth of the experts.

This is not about creating a new organization, simply advancing the one place online where the media can find their experts for quality commentary. They will absolutely come to Josh as the owner of Bigger Pockets and seek his advice on who to talk to for their stories. It is already happening, just not frequently enough.

Everything I am proposing, is about promoting the site so it is found more easily. Nothing more than that.

To your point about newbies proposing something illegal - we see those questions on the site everyday and the experts always immediately point them in the right direction. I would think anyone from the media seeing those forum discussions an reading the Bigger Pockets Blog would recognize the power and legitimacy of this type of online gathering.

Will -

I can only vote for a post once, but If I could, i would vote for this every day. This isn't about some activism or new great cause. It is simply voicing concern each day and being consistently loud about the role we are playing. Not everyone can afford PR companies or news writers, but I think a few of us can help lead and show everyone else how to promote Bigger Pockets as a place showing investors how to do positive things the right way. We can be very influential.

Let's connect and start driving a positive PR campaign about BP and the members who are on here doing business in a positive way.