All Forum Posts by: Doug Sherman

I appreciate the videos that David has shared for free. I'm a complete novice and will likely never make real estate my primary business. I have a degree in Physics and can run the financial calculations without any problem, thanks to all the great advice and examples posted here on bigger pockets. I get the numbers and I have no problem with any of the repairs. The value someone like me gets from David's postings and videos is an insight into the "soft" aspects of the business. In one of his videos David recounts for us the dialog he has with the home owner as he is does a deal. This gives me a feel for how some of the full time professional deal makers do business. I'm sure the best way to learn the business for a novice like me would be to work directly with a pro in an internship arrangement but the internet allowed me to spend an hour watching videos and reading posts. Thanks for sharing the information David, the price was certainly right - FREE!

Yes sir, Vallejo Ca. I guess it's a bit of a gamble here because of the jobs situation. people have used Vallejo as the affordable bedroom community and then making the 1 to 1.5 hour commute each way to where the jobs are. The retail price for good 2/1 homes are being advertised at about 100K to 120K but there are a few good deals tucked in here and there for 60K to 75K. I guess I'm making the bet that people will still live in Vallejo and then drive into SF for work.

Rob, it's interesting that the numbers you have here are exactly the numbers I'm working with in the San Francisco Bay Area. I'm in a community located about 25 miles away from SF and people commute there to work. SFR 2/1 homes valued at about 110k but can be purchased at 70K. The good properties can have light rehab at about 2K materials assuming you do the work yourself. My calculations show cash flow at about $140 per month. Since I'm new to this business and only own 1 rental so far, I'm still playing around with different spreadsheets to get a good feel for actual scenarios for vacancies, major repairs and unexpected expenses. I'm building spreadsheets currently where I enter all the rental data for 5 year periods. 5 separate expected vacancies (1 for each year), 5 separate yearly repair costs, 5 separate everything. The one thing I've noticed with these lower priced homes that are in pretty decent shape is that the cash flow is heavily influenced by the vacancy rate. I think this is because I'm a hands on handyman and doing the management myself. A couple months of vacancy in a year really hurts the cash flow. I'm probably making some poor assumptions because I'm a newbie but my analysis tells me a little lower rent to keep a good tenant in pace is a good strategy.

IT Manager, Engineer, Tool nut. I love building things and working with my hands. The computer business has been good but I don't think the high salaries will continue going forward. Lots of competition from overseas and the younger kids, I agree completely Sorin, coming into the field will work hard for less money. I've got some cash to invest so trying to buy fixer SFR and rent and hold them. I was a construction contractor when I was young so I figure why not give REI a try with these artificially low prices.

Thanks Douglas. I took a look at your website - very nice. You seem to have this business working for you quite nicely. For a newbie like me, would it make sense to purchase a property from a wholesaler? My thinking is the purchase price might be as good or better than I would be able to able to get because I don't have any real good contacts or relationships built yet.

Hi everyone. My name is Doug and I've learned so much reading the forums the last 2 days. 2% and 50% rules are VERY helpful. Thanks so much to the experienced investors Jon, MikeOH and all the others for sharing their knowledge. I'm looking to purchase a couple SFR to buy, rehab and rent for a long term hold.

My plan is to find SFR or a duplex that needs some light to moderate rehab. I was born here so I feel I have a very good idea of which areas look ghetto but really are OK. I was a construction contractor many years ago and still have all the tools and enjoy using them.

Here in Vallejo Ca. the fear is really running rampant. The city is in bankruptcy, crime is rising, police force is being reduced and the bottom has fallen out of the real estate market. The prices on some really good solid smaller 2/1 homes seem so low. 50K - 70K for purchase price and 1000 - 1300 rents. You really have to work to find one that meets the 2% rule but they are there. In the good stable neighborhoods where you have long term retired residents the best deals I can find run at about 1.7% (rent/purchase price). At this 1.7% level you can find homes where the previous flippers went through the home and made many, many repairs. new roof, new bathroom, paint, flooring and even some new kitchens. Pretty amazing to see all that value left on the table so to speak.

Anyway, looking forward to learning more. Love this website!