All Forum Posts by: Rick Albert

Depending on what's allowed, the event/wedding space seems to make the most sense. I don't know anything about that market but it also looks like a good place to film/shoot for magazines, etc. 

But I would be careful. Make sure there really is a market for it. Is Amarillo a destination? Why would people visit and use a property like this?

In any business, your first question needs to be, "Who is my target audience?"

Instead of a co-host can you just get a property manager that specializes in it?

Joe is right, it sounds like if you sell, there may not be any capital gains. Alternatively, if your daughter lives nearby, why not have her buy into it and live there? She can cover the difference so you break even and you split the equity, etc. 

You are at an age that you should focus on cash flow rather than appreciation. Maybe selling is the best option stop the bleeding and do something that is more risk adverse. 

Plus with it being a townhouse, you don't have certain controls like the HOA and special assessments. You are bleeding money now, but each year it might actually get worse depending on the financials.

What scares you? Then what can you do to feel more comfortable? This process can be uncomfortable at times but can also be rewarding. So you have to create that balance for yourself.

I don't think your goals are bad, you are basically living below your means (in an RV) and buying rental properties. You could go the house hacking route with buying MFU, etc.

It MIGHT be interesting if you are a traveling nurse to turn your house hack into a short term or mid term rental while you are gone. That way you have a home base that isn't sitting vacant and you are producing income. 

You have to be careful with these posts, that's when the Real Estate Agents come out and say that their market is best.

The reality is you can make it work almost anywhere. I have rentals between four different states. 

With that said, I would consider house hacking. Using money from an appreciating asset just to pay your landlord doesn't seem like a good flow of money. Plus I used equity from my house hacks here to expand my portfolio. That way I still have a primary residence and rental properties. 

You could do a mix. That's what I do. I used my house hacking here in Los Angeles and utilized the equity to buy out of state. Like creating a stock portfolio, you could invest in some high appreciation markets and have some cash flow ones to offset the income.

If you are thinking long term, appreciation is the way to go and generally at the higher price points. A 3% appreciation on a $3K/month rental will do better in cash flow in the long run than a $700/month rental. You have to define what long term means for you.

Pros and cons.

1. You would need to get the units vacant in order to make the numbers work. Or you can offer a low enough price to make sense. You can ask the Seller. I never recommend to my clients to be the ones to deal with the tenants unless they have the experience.

2. The challenge with unsafe areas is (1) potentially higher cost of maintenance such as broken windows, etc. and (2) this is by no means meant to be discriminatory but anecdotally from people I've spoken to the challenging tenants tend to be at the lower price points. I rarely hear of problem tenants in nicer neighborhoods.

3. With that said, some of the pros is that there is gentrification in Los Angeles. So as people get priced out of one area they have to go somewhere. That's where these neighborhoods come in. So you could see big appreciation gains (with no guarantee). The other advantage is just having multifamily in general. The cost of a sewer line is the same whether it is on a triplex or a single family home, but with a MFU you can spread the risk. You also spread the vacancy. An SFR can be 100% vacant versus one vacancy in a triplex is 33.3% vacant. It can just help mitigate risk. You also are still in Los Angeles dealing with bigger numbers, which can generate wealth faster. A 3% appreciation on a $1M asset is a bigger dollar amount than on a $100K property out of state. I have clients (including myself) who invest here and out of the area. LA typically has outperformed in vacancy, rent growth, and appreciation. Obviously no guarantees but something to consider.

I looked into MFU in Huntsville but couldn't find anything. There was two issues:

1. Whenever you see reports of a "hot market," you are already too late. Keep in mind these cities become hot because of past data, not future. All it does is creates more competition.

2. Most of the MFU are grouped together. When you have all the properties identical to each other, how do you compete? One way: price. When that happens, it becomes a race to the bottom.

I'm not saying don't invest there, but be extra cautious and maybe look for something that makes it unique.

If you are selling your house here where are you going to live? If you are thinking of renting, then that wouldn't make sense. Why have an appreciating asset out of state go right into the landlord's pocket here?

You are correct, buying a four plex is tricky here putting 3.5% down. I tell everyone that if the numbers worked putting 3.5% down, why wouldn't investors pick it up putting 20% down?

What I would consider as a strategy here is buying a house with an ADU. You could build one but it is better in most cases to buy one already existing. Then you can house hack the rest of the it and then consider moving out later on. Or stay depending on your situation.

I would talk to someone who understands this and explains the probability of success. That's really what this comes down to. Even if it passes, what's the process? It might just make more sense to buy another property and move on. If it passes and they have a grip on the process, now you have two properties where you can add an ADU to each.

I don't know Chicago but would it require a hearing? If so, even if the City wants it, the neighbors may not and shut it down. I've seen it happen before here in LA.

To be frank, that is a BS post. You are trying to sell something. You are adding value in exchange of what? A thank you? Unlikely. Literally your title is "business development" and you are saying that you "not here to sell you ANYTHING?"  

Be upfront. "Hey, this is what we do and this is how we add value to you and your clients so everyone is successful. Here are some free resources, presentations, etc."

When I do consultations or talk through things with people, I say, "Look, of course I'm not charging or anything, my goal is to impress you to the point where you want to work with me and refer me to all your friends and family."