All Forum Posts by: Todd Dexheimer

@Aaron Mazzrillo my claim that California will crash was not pulled out of thin air. California has a history of large ups and downs and it will happen again. A quick internet search will show that. The point of my original post - which you glazed over during your rant is that buying in the midwest is not parking your money. If you buy a solid cash flowing property in a good area you have a great investment. My portfolio has performed extremely well in the mid-west. If you buy a building in a terrible part of town in the midwest or California you will have a bad investment. 

California, by the way is #10 on the list for per capita GDP. It may be #1 in overall GDP, but it is a huge state with a large population. I would buy in California while the prices are low and you can cash flow, but right now prices are high and I would guess it's difficult to cash flow in a decent part of town. 

@Dan H. I see you're in California, which I would assume have higher labor rates and possibly slightly higher material costs. Also your climate plays a factor into it. Our costs here are much less.

@Dan H. $5000 on day one is starting with $0? And your #s and time frames are way out of line. $2k and 20 years for a furnace, $5k and 20-30 years for a kitchen, etc. $17000 is saved up in 10 years with my method, which is my typical hold time. In my properties i haven't hit that dollar amount once in 50. 

@Dan H. $100/month for cap ex should more than cover you on a remodeled single family. That's not regular maintenance expenses that occur, that is the cap ex (replacement reserve). I use 15% of the gross for my maintenance expense calculation. Also, I always start my reserve at $5000 and let it accumulate. I only use it for real big ticket items like a roof, furnace, water heater, etc.

 Wow! That was the most arrogant response I've ever read! You obviously know very little of the rest of the country other than you small area that you live in California. 

I hire management companies for my properties that are 20 unit buildings, 10 unit buildings and even duplexes. It works out well for the most part. If you need complete control, then it will not go well, but if you find someone that you can trust it is great. 

Talk with a CPA and attorney. My CPA has told me that it doesn't matter. You will pay the tax for the state you live in if it is an LLC. If you file in other states you will need to have a mailing address (not PO box) that you claim as your business address. The other thing you can do is form a NY LLC and file a foreign filing to do business in a different state. That may be the best/easiest thing to do.

For syndication once you're educated and have analyzed deals from brokers, property managers, then it is time to start talking with potential investors. After you have a list of potential investors then you can find a deal to take down. Wholesaling a property is a great way to start, but if it was me I would take less of a wholesale fee or none and be a partner in the deal. 

Talk with real estate brokers and property managers in the area to find out the absorption rate. Also talk with other property owners nearby to find out if they have vacancies. I like doing rent surveys of buildings nearby (act like you're a potential renter to see what they have)

@Jared K. great point. I syndicate my multi-family deals and expect my investors to proceed with caution. You are putting up a lot of money into a deal and anyone can put good looking numbers on paper. I have conversations with my investors about the expectations and will tell them to sit out on deals if they are not comfortable. The last thing you want as a sponsor or investor is to be nervous about the partnership!