All Forum Posts by: Travis Cooke

That's a fair and valid point...I suppose that its all part of the risk assessment in the end.  In your experiences is desperation the only driver for wanting to quote under-contract requests?  Is there at least a chance that a contractor exists somewhere, somehow that operates with an efficiency to give them enhanced business capabilities, i.e. the capability to provide accurate estimates for under-contract properties? 

Side note - I continue to find it interesting that contractors are consistent weaknesses in so many SWOT analyses of some many organizations in so many different verticals.  It's wild to me...

I guess my overarching thought is that if something is on an investor's due diligence list or part of an investor's processes, i.e. get contractor estimates while under-contract, the investor shouldn't just write if off as not possible just because of a situational reality.  Maybe said investor is in the midst of creating a competitive advantage because they are attempting to change the norm...we'd all agree that pursuing a competitive advantage is worth our time and efforts.  Just a thought...

For my part, I promise to update this thread if my new roofs cave in before 20 years from now. :)

Thank you for the continued discussion - I truly appreciate the insights and wisdom.

~ Travis

As an OOS investor, in my previous transaction, I was able to get 3 roofing bids on 2 properties (6 bids total) while still only under contract.

I am eternally grateful for the wisdom received from the experts on these forums, but in the end its the investor's show to run. In context of my last transaction, roofing quotes as part of my due diligence checkboxes was a requirement of mine so I made it happen. If you have certain boxes to check as part of your due diligence process, i.e. get contractor estimates, I think you should stick to your guns and continue to shape the transaction to your requirements.  The buck on your investment stops with you my friend.

@Patrick Roberts @Jay Hurst

Thank you both for sharing your wisdom.

That may be the most useful document I've ever seen in my life. :)  Thank you so much for sharing that Jay.

Hi All,

Is there really that significant of a rate difference between 75% and 60% LTV?  I would not have imagined that.  Do you typically see any linear rate difference going from 80%-->75%-->70% or does a switch more or less flip at 60%?

With respect to the 15 year 2%-3% loans, aside from maybe serving a cash out need, it seems best to ride those horses the length of the term.

As Clayton states, dependent upon your strategy, any market can be a good market.  I'm personally contented with our holdings in Ohio thus far; admittedly it hasn't been all that long but I still feel that we got some square deals.  At the same time, our strategy is not prefaced with the need to find the next 'up and coming' city.  Our strategy is much more long-term oriented, or to quote our friend Buffet, "Our favorite holding period is forever."

Best wishes to you, I'm confident that you'll find your market with time.

~ Travis 

Hi Jackie,

First off, pleasure to meet you.  The premise that bruises and lessons will happen whether we idle ourselves or charge forth is a fantastic perspective - thank you for your wisdom.

We are not limiting ourselves to strictly Dayton.  I see small potential scale of economy benefits in focusing on a single area but not to the extent that we should let it restrict us.  While we have spent the most research time on the Columbus-Marion-Zanesville and Dayton-Springfield-Kettering CBSAs we have be learning other markets as well.  We have periodically put research effort into the Fort Wayne-Huntington-Auburn, Springfield-Jacksonville-Lincoln, Des Moines-Ames, and Pittsburgh-New Castle-Weirton CBSAs.    

Hi All!  I understand that every investor's journey is specific and unique based upon individual needs and objectives; with that being said - I also believe there are (as with most industries) best practices alongside ill-advised practices that are generally common to all.

Back in Feb., after a year+ of reading this and that, my wife and I jumped into the REI game. We both have a history of investing in the public markets (stock, bond, options, commodities) but were new to direct REI. We transferred some assets and dove in with the purchase of two duplexes in Dayton, OH. The transaction certainly had bumps (boy did we learn a lot - we are much stronger for the next go around), but in the end, we feel that we got a decent deal for a first time around transaction, i.e. decent neighborhood, purchased roughly 15% below as-is appraised values, existing PM and tenants in-place made it easier for us noobs. We have since re-roofed the properties and fixed a few other residual issues from before our ownership - thus far, nothing that wasn't known before the acquisition. We have also been able to increase revenue a bit via new tenancy and increased rents. While our objective with these first two properties is long-term cash flow and not short-term appreciation, it is still exciting to me to look back at the purchase appraisal and run the Income Approach formula with the new gross rents.

I suspect that many new REIs can get stuck at this point. There is very much a feeling of "Okay, so what next..." As of now, the duplexes 'feel stable(ish)'. We have a few bruises under our belts from the first go around but overall feel more experienced and prepared for the next one - woe unto the next REA, lender, and insurance agent we work with - I have a whole list of questions for transaction #2 ready to go. :) (Mostly Joking...). Over the past 6+ months of our REI activities we feel that we've learned a ton but realize there is still sooooo much more learning to come. At this point, in alignment with the vision of building our portfolio brick-by-brick and keeping our eyes on the future not the present , we believe that we are ready to move onto our next acquisition. We have no cash-flow needs from our investments (portfolio or real estate) to support our daily lives so that provides us with a lot of flexibility but we don't think that gives us a license to be reckless. Our hope is that our REI activities, alongside our other investment activities, will be available to provide consistent income 3,949 days from now. Until then, the intention is to manage it well and let it grow unmolested by our daily lives.

So onto my actual questions and thoughts. How did y'all REI veterans feel after 6 months of experience? In general, do y'all feel that the only way to learn more is to keep diving in or do you believe it is wise to take significant breathers in between purchases when starting out? Is the 'What next' feeling something that y'all have experienced and had to just push through or are we unique in this? I imagine some of y'all are running transactions concurrently and constantly at this point, but think back to those first few transactions when it was all still new and all of your REI wisdom was yet to come. For example, we have not yet gone through an eviction or experienced the consequences of an unscrupulous vendor (although admittedly our PM and contractor aren't my favorite vendors ever); would y'all typically advise that we wait around for some of these experiences to rack up first before swimming in deeper water?

Just looking for opinion and thoughts. I fully understand that our journey is our own and that every REI's experiences are going to be different based upon a million different factors.

As always, I thank y'all for any conveyed wisdom and I sincerely appreciate all of y'all for your participation in these forums - I have found them invaluable.

~ Travis 

Quote from @Aristotle Kumpis:

Phoenix, San Antonio, Charlotte, Jacksonville are places I like more. The midwest is not growing as fast as the south and southeast. For a growth market to be growing, you need a lot of job and population migration. 

Agreed, the south and southeast have been on fire for a while now.  I am humbly of the opinion that the Sun Belt is entering a phase of more moderate growth and that the 'Rust Belt of Old' is the next region up to bat.  Of course, I could be absolutely wrong, I mean, who really KNOWS after all. :)  

I've been looking at the Columbus and Cleveland-Elyria MSAs in Ohio. I've spent the better part of 2024 reading up on those markets and learning everything that I can about REI in general - now it's time to dive in and get to it. :)