All Forum Posts by: Todd Pultz

@Benjamin A Ersing absolutely, sent you a connection. Inbox me

@Jon Schwartz first I do not read books at All Even rich dad poor dad, so you won’t get any quotes from me lol!

Speculation is subjective. As we talk about inflation, speculating and adding those into underwriting you are making yourself plan for lower returns because you are saying your costs will go up. However, when you speculate on appreciation you are creating a plan based on adding $’s to yourself, completely the opposite and bigger risk

Either scenario you can be right now or pretty darn close, but if I’m wrong I would rather be wrong on inflation and save money oppose you speculating on appreciation and never making the money.

Our job in real estate is to reduce the risk as much as possible or at least to our comfort zone.

I read your profile quickly and I noticed your driver is your daughter and being able to pay education and college through passive income. First, my kids and family are my driver as well so that’s awesome your motivated through your kid! With that being said, if that’s truly your goal, I would challenge you to look at your current strategy and ask yourself if your reaching your goal listed in your profile through that strategy!

You can do both at the same time. I forget the numbers above you used for appreciation above by why not combine your strategy? Buy an under performing complex with leverage and an investor, do some minor repairs, raise rents and force appreciation? At 6 months, refinance into amortized loan and cash flow after taking everyone out? We just did this on a 21 unit we bought for 295k six months ago and it just appraised for refinance at 650k. We only put 30k into it using collected rents. After refinance we will have 0 cash in and be able to put close to 100k in our pocket for another deal, while this property cash flows very nicely!

@Jon Schwartz yes ABSOLUTELY speculation when your driving factor is appreciation. That does not mean you can not mitigate risk of speculation by having knowledge, skill, great due diligence and an economy that cooperates with your speculation. You can be very successful with your strategy, so do not take my post as a knock to it. Just not my cup of tea!

This depends on what the investor goals are. If you are ok with waiting for monthly income and waiting for a successful exit potentially, this might be your strategy! I’m a wealth guy and cash flow guy and your strategy does not work for that. Doesn’t mean one is better than the other!

I know nothing about LA that means much! I would curious to here your most recent deal in LA personally that you would be willing to share. And I could give you one of my last deals. Then we can pick them both apart for pros and cons......???? Both strategies work, but I take monthly cash flow over waiting for appreciation every day and every deal!!! You can also both at same time on same property, but that becomes more difficult.

@Gavin D. @Jon Schwartz let me say kudos to both of you for a very healthy conversation!

Transparency, I am a cash flow guy and look to build long term wealth with solid monthly income. So I like my Midwest market of Dayton OH where I live and invest.

With 100k, I would advise my clients to purchase 4 value add quads. We can buy quads for 80-100k that just need rents raised and freshened up all day long. So 100k is plenty to do that with. And.......it’s easy to REFI and pull cash out. Here is rounded numbers but ideal for my clients I represent as their realtor. If we can be all in on a quad for 80-90k, that’s puts us close to 20k to close. Rents raised to market and just some simple sprucing up, we can refi these at 120k appraisal and pull 75% out with fully amortized 30 year. Pulling 90k out on refi pays off initial loan and cash in, so we have 0 cash in at this point. These properties will positively cash flow around $1200 a month. So very doable is 4 quads and we will have close to $5,000 cash flow per month. If things go well, very easily we could do a fifth quad within 2-3 months and months 6-8 we can cash flow a little over $6,000 per month! This is easy

But Wait.........you pulled all of your cash back out, so let’s rinse & repeat!!!!!!! So I’m 12-16 months, with hard work could we cash flow over $12,000 per month? absolutely and we are left with our original 100k.

Or another scenario if we have a solid stock market, let’s put that 100k in a diverse portfolio and pull a credit line against that 100k. Most will give you 60% credit line at 4%, so let’s take that 60k credit line and lend to ourselves and 3 quads to start. Our 100k will not be affected and will continue to grow as long at the return is higher than our 4% interest credit line. Again, rinse and repeat!

I have hundreds of doors here and followed both these scenarios in different scenarios many times!

My numbers are rounded for ease, but very close to accurate and what’s doable!

LA is tricky, expensive, not landlord friendly and speculation at best, so I think you know where I stand

@Cindy Chan we are working on 3 rezoning efforts currently. The best advice, get a meeting with City manager, economic development, zoning and gauge their support of what you want to do. Zoning will guide you through the process of you develop a good relationship. Now if this is a bigger city, you might only get a meeting with Zoning official and that’s ok.

From their you will have an online application or in person application. I’m almost all areas, you present to the Planning Commission First and the city staff gives their recommendation on approval or not. If planning commission votes for it, your Not Done. Usually now it has to go to City Council for a couple readings and they vote on it!

You will need site plans at a very minimum to start the process with a detailed plan about your intended use. Architects or engineers can create a quick site plan

Good luck and reach out to me if you need anything

@Megan Winterberg @Tanya Villanueva, many have given you a lot of good points thus far, so really I just want to piggy back on a couple that I think are huge and where I have seen others fail.

1. Knowing what area you want to go into is huge, but you can not make this solely on the numbers as it is not that easy. This also depends on the inventory and where you feel comfortable building a team. You may love an area but may not feel good about those you talked to. Knowing what type of properties you want to buy is huge. I get calls often, “I just want to buy good deals”. It’s not that easy. Know what you want! Are you ok with challenging C class properties? What cap rate do you want to buy at and what do you want to perform at? Are you looking to find properties you can refi out of or does that not matter? Are you flipping?

2. Know where your money will come from and be ready to pull the trigger. I’ll come back to this

3. Find an agent and there are very few that really understand investments and will guide you in the right direction without worrying about there commission. I have a partner who got hammered by bad advice from an agent in Columbus / Dayton before we had met. This same agent pushed properties to me that made no sense. The positive, I met one of my partners through this agent. However, those two reasons caused me to get my realtor license so me and my network never had to worry about that again.

****The key factors - your agent should be an investor and should be extremely dialed into the market and have a network. They should be able to point you to lenders, they should have contractors ready to roll that they have vetted, they should know the good PM from the bad (or better case scenario, they actually have a PM company already). And you do not want an agent that solely makes their money on commission (this is not hard and fast and there are some really good agents out there like this), but this is best case decisions. Reason is, you never want their commission to stand in the way of a deal. If your agent is hooked up in the area, they will bring you off market stuff that nobody else has access to, but #2 is important when they do. You have to be ready to pull trigger on stuff. I’m very flexible with my commission because I know my clients out of state are going to have me as property management, so why would I kill a deal over quick commission instead of having a longer relationship? Lastly, with the agent, if your lucky to find one that has the above criteria you need to make sure your goals and their goals are different. You ask why?????? Because if your both going after the same type of properties, they will only give you the bread crumbs.....

Example; one of my clients loves value add quads. While I have some, I’m focused on larger multi-family. So any quad I find I’m happy to send his way, but If I found an amazing deal in a 48 unit complex, I’m going to close the deal for myself first! Your agent should always tell you the truth.

Another client loves A-B class properties. Perfect, I only buy in C class.

Another client loves trailers parks, awesome While I grew up in one, I don’t want to own one!

4. Hopefully, you have now built your team, but if not, find your property management team

5. Fly out and spend a few days with everyone and get to know the area, so you know what your agent is talking about as he references neighborhoods

6. Go get to work and buy some S*%&!!!!

Sorry for long response, but best of luck to you!!!!! Reach out if I can ever be of assistance.

@Payge Myers good luck to you on this journey. I’ve been an investor for about 7 years, but I got my license to be a realtor 6 months ago or so. I did not get it because I need that income, I got it because I was so frustrated dealing with other agents that did not understand investments. And.........to save all the commission I was paying out. It has surprisingly taken off without any advertising and Ive done 15 deals in the last 6 months as the realtor. That is solely because how active I am in the investing world and community.

My suggestion to you, learn about real estate investing and start networking. Any agent can teach you to sell a house, but there are significantly less that REALLY understand Investments. If you can speak that language and you know what to look for you will do well.

Everyone talks about bird dogging to find investments. I do this to buy properties, but I’ve also started doing it for clients. If you want to close a lot of deals, do not wait for things to come to you, go out and make it happen.

@Joe S. I’m in Ohio and we have evicted for a hold over on a few occasions. They were not easy though and question from judge was pretty easy....”why don’t you want them to stay”? So now your back to finding a reason for them to go.

Guys, my suggestion is this! Everyone relax and let this play out. Yes, we should be fighting back, but in the short term there is absolutely nothing you can do right now. If you have prepared as a business owner and real investor correctly, you will be fine. If not, you need to kick overdrive in and start finding a solution if you run into problems.

At the end of the day, let’s see what happens over the next few months. We can weather the storm and I feel strong that I have treated my hundreds of tenants fair and most will do the same in return.

But, eviction is like disciplining an employee. Document, document, document everything and let nothing go. I can write some really nice correction letters. I can do a bunch of inspections, I can quit turning a blind eye to some very minor things that they appreciate. There more ways that one to skin a cat

@Leonel Lerena I like the guys over at Lima Capital.

@Paul Shannon count me in! We are actually involved in one here locally against the city who decided to pass an ordinance restricting what late fees we could charge and stating we had to accept late rent up to the actual court hearing case! Basic was we can only charge $25 of the monthly rent for late fee and that’s it. Crazy world we are living in and I fear for investors that are over leveraged or have not stocked reserves for these situations