All Forum Posts by: Steven G.

You will not find these deals in upper middle income or upper income areas, which are better for retail rehabs OR leveraged rentals. I don't know the Atlanta market, David, but I do know the Dallas market (this will probably be helpful for Dmitri L). 2nd note; I do 65% of my deals in Dallas county, and the rest in Denton, Tarrant & Collin, and other counties so my example cities will be primarily in Dallas county. All the cities below, I've personally bought deals in that would meet or beat the 2% rule.

Where you will rarely if ever find these deals
- Most suburbs north of 635; Plano, Frisco, McKinney, etc; again those areas are better for doing retail rehabs OR leveraged rentals
- Also, any "newer" area with homes over $100k will rarely be viable for these deals

Where you can find them fairly easily; these deals are usually NOT found on the MLS; they tend to be lower middle class and older middle class areas
- Older parts of Grand Prairie, Irving & Arlington (central DFW)
- Older parts of Mesquite (eg W of 635) and Garland
- Older parts of Forney
- Other suburbs; Everman, White Settlement, Burleson, Waxahachie and many more that are not too far out (I'd say Greenville, Sherman/Denison, etc would count, but they are not really part of the Metroplex so I do not factor those into the equation)

Working class neighborhoods / urban areas in Dallas or Fort Worth; these deals can sometimes be found on the MLS, but the best deals are off-MLS deals

- Pleasant Grove
- South Oak Cliff
- Various spots around Dallas
 

Where you can find them all day long; these are areas you might call war zones...but I call them areas "that are improving" ;)
- Fair Park
- West Dallas

Hopefully that helps!

Super good deals are getting harder to come by, here in DFW, but they can be found. 

Experienced investors need to stick to the 70% ARV minus repairs formula for rehabs, with no exceptions.

With properties held for cashflow - aka rentals or notes - you can cross that threshold but should still try to avoid it as much as possible unless its a cheap / lower income property that cashflows like crazy (eg a South Oak Cliff rental purchased for $25k that rents for $750 a month).

Joshua, I would not approach an agent for help with doing your day to day wholesaling business - or real estate business - in the beginning. Starting out...focus on building your own buyers list, and finding your own deals. If you see an MLS property you want to buy, to either keep, fix/resale or even wholesale (note I advise against wholesaling too many MLS deals...that turns off buyers)...then approach an agent who will draft a contract to your terms, assuming you don't know how to do contracts.

However you will do business with agents over time. With my real estate business...they bring me properties for me to buy, help me sell my properties and also lease my properties.

YES!!! STAY AWAY from those seminars. They'll lure you in a for a free one day or weekend seminar, then upsell you a more expensive seminar for say $1000-5000, then upsell you again for a grand-daddy big multi-day seminar that sometimes cost $30k-$50k. Stay, stay, stay away from those. 

One time I went to a free Rich Dad seminar with a friend just to "check it out", as I am a big fan of Robert Kiyosaki and his core books, and when I went there...I was dumbfounded that not a single person except ME out of 100+ people at the free seminar had already read any of his books. I mean, seriously? At the end of the salespitch at least 20 people signed up for the next paid seminar...sheesh. I felt bad for everyone in there. If you are a newbie and want to learn something...read about it first.

And do research - JUST LIKE YOU DID. I bet almost NONE of those guys in there Google'd and found out any of the bad things about his seminars.

Disclaimer - I love Robert's books...Rich Dad Poor Dad, The Cashflow Quadrant & Rich Dad's Guide To Investing...AND the e-Cashflow game...but I hate the seminars.

It can be done. But depending on your residency status - that will make a big difference on how easy it will be to do wholesaling here. You'll need to be able to have a bank account to be able to cash/deposit checks, and do wires, etc.  You'll need (and want) to pay taxes on any income you generate; you can get an ITIN and optionally an EIN from the IRS with ease.  Many hispanic folks from Mexico come into the Dallas area, and yes many are undocumented (illegal) immigrants, yet they run businesses successfully and make great contributions to the DFW area.
     
If you are here with just a visa...you can probably form a corporation OR LLC. I can see that helping you...especially with getting a bank account.

 
Here are some links that might help you:

http://www.usa-corporate.com/setting-up-a-us-compa...

https://www.sba.gov/blogs/starting-business-us-for...Good luck!

Good question. Here's what I do ... if you have an outdated but clean & basic rental, you can get market or slightly below market rent. If you have an updated and nicer rental, you can get market or slightly above market rent. Where do I get my rental comps? From the MLS. You can also look at Cragislist, Zillow and the like if you do not have real rental comps...but nothing beats data from the MLS.

The trick is to just buy your rental property cheap enough, that even after upgrades, it'll cashflow well. My favorite rule is the 2% rule...you should get at minimum 2% of your basis back per month in rent, not factoring in any leverage. So if you have a house that cost you $50k you should get at least $1000 a month in rent. It IS hard to do that in many regions of the United States - but in DFW its very doable

I think it's a bad idea. Why not live in a nice area, and rent properties in the not so nice area? As long as you're not too far away...within a 30 minute to 1 hour drive (the shorter the distance the better)...you should be fine.

Townhomes & condos can be great investments. But, personally, I would say stick with single family houses, especially if you are a newbie investor. If you're dealing with an ocean or lakeview property, or a property in an upper-income community and you got the bargain of a lifetime...and are doing a quick in & out rehab - that'd be different. But townhomes in many parts of the country can be a risky buy & hold investment, especially if the HOA dues are too high or if there is any remote chance of depreciation.

In Dallas/Fort Worth, Texas, where property values are relatively low compared to most parts of the country (yet we are booming economically) and we have lots of land, townhomes & condos tend to have little or no appreciation on average. In some cases they depreciate - especially in lower to moderately low income areas,  or in older suburbs where the school system was once good but is becoming less desirable due to socio-economic / demographic changes. Even some of the ones in middle class or upper income areas around here go down in value - yikes.

I have bought dozens & dozens of townhomes & condos, rented them, rehabbed/sold them & even owner financed one. And I made money with all of them. But I dealt with lower-income townhomes that had moderate HOA dues, and they cashflowed well. I did not buy them for the potential appreciation (they had already depreciated by 50-75%+ since they were built new 25-30 years prior)...but solely for the cashflow. And I bought them so cheap, I knew there was little risk. They couldn't really go down any further in value since they generated good cashflow ... and in a worst case I could always just hang onto them, and not sell them, if I did not want to sell them at a loss. But in the end I sold them all for a nice profit.

If you think its a winner deal...go for it. But just be careful. I think there is a lot less risk for you in the single family home world - especially when just starting out.

Kamran, you will have a hard time finding any real estate cheaper than $20k. Those deals ARE there - but again hard to find. 

To start...go to ZipRealty.com...and search there. Use the search parameters for Dallas, at least 1+ bedrooms and then sort by price. You'll get some hits. E.G. off Olde Towne Row, Dallas, TX 75227 - is a $10k townhome - but it is a burnout & needs tons of work. I am actually familiar with that property and the roof / siding / bones are good...but it needs all new sheetrock, electrical, plumbing, etc, etc. You'll find other deals too. 

Good luck.

One month's rent is a good deposit amount...however you can always charge more or less, depending on market conditions and the creditworthiness of the occupant. Apartments and landlords frequently run "move in specials" to get places leased out ASAP