All Forum Posts by: Chris Clothier

David -

Most BMS systems are set up to allow an investor who is already having success grow from part time to full time or full time to big time. You cannot recreate the functionality of a good BMS with word and excel - it is apples to oranges. You could piece it together using those programs along with a quality data organizer like ACT and an easy to use web page creator and an aggregating system to make everything work together, all of which is not easy to do.

If you are serious about developing a scalable business model and growing a RE investing business where you are selling - not holding - your active RE deals, then you are smart to begin to look at a good BMS. I am not a fan of realestateautomator.com and have tested the pre-cursor to it. It was all built on the Openroad platform and it costs much more than $97 a month in the long run. As you look to grow with is so does the cost. Ultimately, it will be an investment on your part in the systems that you need and if it is not Openroad then it will be another system. You simply cannot duplicate it using Microsoft programs and cobbling together other software, unless you have more time to develop your business than actually building your business. I encourage you to keep seeking advice from those that use the systems as their will be people who have been successful and people who have failed to implement the BMS and their feedback will help you decide which one to test.

best of luck

Chris

While institutions are certainly looking to get into the SFH rental business or 'REO to Rental" model as they are calling it, they all have one HUGE fear and that is that the fed. gov. and the banks are not going to let them pick and choose properties, locations or types of investments. They are offering tranches of properties but some are in NOD status, some are foreclosed and vacant and others have been taken back and rented. None of them can figure out how to make a reliable rental model work across multiple cities and in a time frame that does not leave hundreds of homes sitting at one time. They are realizing that the US is made up of hundreds if not thousands of individual markets and each acts different than the next.

While the Waypoint deal was big when it was announced, many on WS are watching with skepticism because some terms have still yet to be released. All of the firms on WS want in, but none of them want the problems that are associated with rentals. They want guarantees and no one is willing to make them. Without being able to forecast a reliable result (which is nearly impossible when you are trying to buy thousands of properties spread out in a region) I doubt you will see very many WS firms getting involved on national scales. There are too many variables and they do not make huge bets without a high probability of winning.

As for the B of A announcement, just read between the lines and realize that this will never get off the ground with any real size. They are sampling with 1,000 properties, owners do not get a say in the decision, and they are focused on 1 area. They have literally hundreds of thousands of NOD's and REO's. They do not have any faith in this program and IMO are simply looking to make positive headlines before their quarterly reports after the shellacking they took for the debit card fee plan.

I foresee a lot of activity for individual investors and still plenty of opportunity for many years to come. It is going to take an extremely intelligent and forward thinking company to come in and aggregate different markets under one model that provides consistent returns. We'll see if that ever comes to fruition.

Edita Davtyan - I thing the key word is CAN effect you negatively and I would be naive to not think it happens more often than not. But my family owns a property management company here in Memphis and we won properties. Together, we own about 150 properties in our personal portfolios. We also manage another 1,084 properties for investors in the exact same neighborhoods and sometimes right next door or down the street. Even managing all of those properties we average about a4% vacancy rate and rarely is there a time when one of our properties are not some of those vacant. It depends on what you are in the business for. If our investors are upset by vacancies and poor performance then we lose repeat business and referrals which are our largest lead sources. So for us, it makes sense to fill a vacancy of a client long before we fill a vacancy of ours. BUT, we are a different kind of company so it may not be comparable to a property management company that simply manages property and does not provide other services like access to properties.

I just simply believe a property management company that is owned by a good business person never rents their own properties first. Probably rare! Great topic though...

Kevin -

I have to side with Will on this one. You stated it was just simple power in numbers and in my mind you are 100% correct. I would rather have the power in the number of end buyers I have instead of the number of wholesalers. Either way, the work YOU do is still the same and the NUMBER of deals you get is the same. You are the one supplying the deals. Having more wholesalers instead of buyers does not mean you will do more deals.

I would rather have 100 buyers instead of 100 wholesalers to move my 100 deals. I am doing the exact same work in each scenario and making 100% more profit selling to the end buyer for the same amount of work as selling to the wholesaler.

Good discussion though and it touches on the fears of a lot of wholesalers (not saying you have fear), but many are scared to build a list and would much rather split the money and rely on someone who already has a list. It just seems less intimidating. Again, you never said you operate out of fear, just pointing out that is often the motivation for JV'ing with someone else on deals.

Edita Davtyan - Its a tricky question that you will get a ton of different answers to and in the end, the real answer is as many times as you, the client, asks them to. There may be an additional charge for it, but they should be able to always perform something like this for you and get you a written report within a matter of days.

Edita Davtyan, Glad you found a good property management company and hopefully your experience begins to improve immediately. I would definitely ask for references from the PM company and make sure they are out of town owners like yourself. I disagree with Kevin Perk on the ownership side. I think property managers that are investors themselves can make the best companies to deal with because they are familiar with the areas, the rental rates and most importantly the attention to detail that investment property owners want. Both statements way over generalize the issue, but in my experience with companies from AZ, IN, FL, AL, TX and TN - it is the company owned by active investors that perform best.

I personally prefer larger companies with good systems in place. I would inquire if they use technology and what it is and how does it benefit you as an owner and the how does it benefit the tenant. As an example, good systems can reduce the workload and increase efficiency of a management company.

Chris

George -

I think you have some great data points to look at on here, but for me I would include economic stats for an area. Not just who are the employers, but what are the industries. Are they dependent on other industries for survival? I look at market GDP as well as new job openings which is a much better indicator of jobs climate than unemployment rate. I look at the population growth rate of a market to see if it is trending up or down. This is all 30,000 foot view stuff, but it helps to narrow a list of potential markets for investing. I think reading the Business Journal for a particular city can be rally helpful as the articles focus on business climate. I want to invest and operate in markets that are built to withstand economic downturns. they tend to be the areas where there is some sense of constant demand and stability.

From there plug in any number of the other responses because they are excellent for data points on the actual real estate market.

Good luck - Chris
From there, you culd

Josh Pena,

Welcome to the community! Best advice I can give you is to make a habit of spending a little time each day on the site researching and developing an understanding of the particular niche you want to get involved in. Southern California is a big area that suddenly gets a lot smaller when you realize just how many people from so cal are on this site. So far, I've yet to see someone who wasn't willing to share knowledge and help a fellow investor get some good advice.

That being said, I would encourage you not to write off hiring a mentor or coach or getting involved in a program to accelerate your learning. Just do not do it before you are ready and able to be successful because most good programs are designed for people who are able to do it on their own and simply need the encouragement or accountability that comes with the details they are teaching.

Best of luck as an investor and don't hesitate to ask if there is something you need. This site is full of people willing to help.

Brendan Carroll I do not know of an API for this, but while I applaud you for the in-depth research and obvious due-diligence you are performing, Zillow is not a very reliable source for data- especially their estimating algorithm. Unfortunately, Zillow cannot tell you the difference between two identical side by side homes even when one can be completely remodeled and the other can be completely burnt out.

It did not sound from your follow up post that you were using this for anything other than market identification, which is good, but I still think advice from fellow investors followed by local market research such as data provided by COC's as well as local property records and realtors associations may be the best accurate data you can find.

Just my .02 - All the best,

Chris

I disagree that investing close to home makes it inherently easier to protect capital or even insure success. Regardless of where you invest, there are steps you can take to reduce risk. Make that - steps that you must take.

From reading Phillip Hubler's post, it sounds like there is a lot of advice, coupled with a lot of investigation on his part and when combined it leads to a lot of confusion on which steps to take first and where to go. Investing out of area is not necessarily the answer, but for long-term buy & hold strategists, they will tell you that Southern California is tough. That doesn't mean you have to go halfway around the world. You could check out a market like Phoenix that is close enough to drive to and may have numbers that make sense. But, first things first, you definitely have some work to do to make sure you are pointed in the right direction.