All Forum Posts by: Todd Pultz

@Molly Wenske do you know what they are looking for? Are they looking for more upfront money now? Are they looking for higher purchase price? does a higher interest rate make them motivated?

Can you give some details on the property and the sellers? Every deal is different

@Adam Ross I agree, I love Bigger pockets as well! I’ve met some really incredible people on here.

Your questions;

1. We can continue to buy properties at low entry because we still have a huge inventory of properties managed by mom and pops that are nearing the retirement age, but also we can continue to buy in this manner due to out of state investors that don’t understand the market and/or get drained by the incredible number of poor property management companies here.

2. Appreciation.......I entered my first quad in 2013 for 20k. I put 12k into it to rent out and that was it. I sold that property in 2018 for 90k. The buyer was out of state and actually became a close friend and now business partner. He just refinanced it and it appraised at 107k. Quads are now being listed at 115k-120k. There are a few under contract now for around 120k that will push our comps some.

This means we have to hustle and find the quads and others off market which is very doable. I’m speaking of 1 bedroom quads. Two bedrooms we can but 95-110k in decent shape and cash flowing. They will appraise 135-140k.

I did a podcast on August 17th with Whitney Sewell Daily Syndication show. Find that and listen to it. I gave pretty much my Dayton story on there!

I see our market in C class quads rising to around 135k over the next 1-2 years.

Thanks for the nice comment and best of luck to you!

@Alci Martinez that is quite the contrary depending on your goals. When flipping often people say get the worst house in the best neighborhood, so C class would not meet that test usually. You can still flip here.

However, C class with a lower entry point allows more cash flow, but often more modest appreciation. A strategy some use is to trade up. So get in at at lower entry then move your way up to B, A buy selling a performing C class asset.

I have 75% C class rentals and they are phenomenal, but you have to know how to manage them.

@Frank Chin yes your entitled to comment on anything just as we are all entitled to question your post, lol!

He was referring to listings on MLS, and a seller has very little control over who they sell to once they list a property. They can decide what contract to accept, but there are federal and state laws that prohibit someone from not selling based on some of the factors you listed. So in regards to the MLS, I believe they are already limited to being able to choose who they sell to legally. Sure that can be disregarded, but not legally. So if they decide to allow not to be assigned they are in virtually the same spot.

If it’s off market, your story has more validity, but even then, a double close would solve that issue so they have no idea who the end buyer is anyway.

If you rent, someone can always sublease against the rules of the lease, but if we find out, we simply evict

And......I said I liked your story! You must have misread........lol! I know those are true stories as I have seen similar. I just didn’t think those were items for someone who wants to wholesale to be concerned with.

@Frank Chin those are good stories, but I’m trying to figure out how the heck that applies to wholesaling? At the end of the day every legitimate deal has to be closed and recorded. You can very easily make it extremely hard to find the real buyer by using trust etc. but Someone could go have a random person by a house under their name and lease it to a shell company and I don’t need a wholesaler.

Your cop story doesn’t sound like he did a very good job concealing the real buyer as you knew who he was and where his mom was and how to get a hold of him. Nothing to do with wholesaling!

I’m not a wholesaler and not a huge fan of them, but your stories, while fun reading, were not really connected to the topic on the forum.

@Jenning Yu some valid points and I completely agree that a lot of out of state investors get eaten up by Property management and sometimes greedy real estate agents! So I completely see why you would go for appreciation. That is how many of us buy properties on the cheap when owners are frustrated because they have been abused by property management.

With that said, yes, out of state investors can be very successful with cash flow and appreciation at the same time. I have very close friends (now) that invest here and I manage their properties for them. They cash flow very nicely and their properties appreciate. They appreciate much slower here, but we also do not and will not face the drastic downturn that other cities might in down market. Because of them I started my management company and got my real estate license as I was tired of seeing out of state investors get taken to the cleaners by less than ethical people.

It’s much easier for me being local and investing local, I agree, but out of state investors can also be very successful if they take the time to build deep relationships with individuals they trust.

And lastly, slumlords are not truly successful in any market whether they be out of state or local and none of us like them!

Appreciation will build wealth I agree, but cash flow + appreciation will create wealth much faster if you continue to invest in your business!

@Tony Kim sorry Tony that was not meant for you buddy! Only the one that made the comment lol! I just tagged you and Jon to be a part of the conversation. Sorry for that confusion, it was not directed at you or Jon.

@Tony Kim @Jenning Yu @Jon Schwartz

Jon congrats on those deals man, they sound really solid. I do think you misunderstood my statement about being wrong to my benefit. We plan for inflation for our costs and vacancy loss, but if we are wrong about those we were wrong to our benefit! If we plan for appreciation and we are wrong about that, we are wrong to our detriment. We plan worst case scenario always!

To the other two that jumped in you may have missed a few things. I certainly look for appreciation and was not suggesting you don’t look at it! That’s part of our model. However please don’t make an uneducated comment that cash flow does not create wealth. It’s what you do with the cash flow that builds wealth. And it’s combining strategies to become a ROCKSTAR that create wealth. You can do both at the same time! And let me be arrogant for a minute, I like being wealthy, I like having my pockets full of cash, I like my wife being able to buy whatever she wants, I like planning a last minute trip to VEGAS and never worrying whether I have the money to do it. And while I do it, my buildings will appreciate just fine.

My point was telling a new investor with 100k to jump into LA and wait for appreciation, night not be the wisest move unless he’s in LA. He can turn more cash and create quicker cash elsewhere to then go back to LA and do some damage. Investing is local like a few of you said! Spending 100k on your first investment is not local

@Cindy Chan I would really have to look at the actual numbers, but this is very general answer and I am not an expert and I do not know your local restrictions, but here is what you need to find out.........

Most unified code ordinances allow the zoning official to issue a variance if it’s within some percentage of change like 10%. This is probably not that case based on the numbers you shared.

Next, most localities have a BZA, “board of zoning appeals”. This board is allowed to issue variances if the owner demonstrates without the variance they would be unable to fully utilize the maximum potential of the property without it. This board is usually volunteer citizens and make a decision based on their own.

If BZA denies the variance, you could the appeal to council in many situations, but not always.

So my suggestion (but this is more cost upfront), is to submit for your building permit (requires you paying architect), then if it gets denied, appeal to the BZA for a variance. However, you may be able to go directly to the BZA, but they will want to see plans etc. if they vote in favor of your variance, you would not have to rezone

Now, you could just go straight for rezoning and may be required to do so by your local government. This would more than likely just require a site plan and pretty basic.

You need to get a meeting with your local zoning person and ask questions and ask for their help. If they are against your plan you will have an uphill battle that you might not want to take on.

A lot of this stuff is about relationships and it does not hurt to find out who the players are that make these decisions and work in those relationships.

@Cindy Chaney mr make sure I understand. You currently have 2 units on .33 acres and per your zoning your allowed like 2.65? Correct? So your ok currently with what you have, but your looking good add more units on that .33? Can you tell me exactly how many units and what style construction your going to do to get them? Or are you looking to add additional units in the same current structure?