All Forum Posts by: V.G Jason

Quote from @Remington Lyman:

Quote from @Mike D.:

Quote from @V.G Jason:

Quote from @Mike D.:

Quote from @V.G Jason:

You're honestly better concentrating your capital in an above average market(AZ, NV, etc.) and putting more down(yes cash at risk, for you guys that faint on that) or pivoting to equities or an alt source of an investment than doing anything in the midwest.

The math on that does not math. Assume you put enough down on something in Phoenix to reach $0 cashflow and calculate the return on equity, then do the same in the Midwest. Midwest wins every time. In fact if I were going to do the first, I'd prefer to just be in the stock market. Especially considering that you need much more reserves (dead idle cash) when doing these appreciation-focused plays in low cashflow markets.

That's the problem. Midwest cash flows on paper, never does in real life.

Phoenix will likely yield a true gain in appreciation. The math more than maths in practicality.

I must ask, do you have something to sell Midwest based?

No sir, I've got things I'm holding onto! I'm not a PM or an agent. I just come here to learn and try to give good advice. My entire portfolio is made up of small family in the Midwest and it definitely does cash flow. I've actually considered investing in Phoenix--I estimate return on equity must be in the low teens at best if you pay it down enough to get $0 cashflow. For that return I don't see why I should be actively involved in something--might as well be in stocks. In the Midwest you can get total return of say 20% without breaking a sweat, even figuring in the lower appreciation. Try running those numbers.

 As someone who has no skin in the game I disagree with @V.G Jason. You should not count on appreciation of anywhere let alone someplace that is unbearably hot all the time and has weeds that poke you

You should always invest with appreciation on mind, but never solely. 

Don't make this another Cleveland Bob debate where he walked into that answer. 

This is the differential of making wealth versus money, and why too many miss the forest for the trees.

Quote from @Mike D.:

Quote from @V.G Jason:

You're honestly better concentrating your capital in an above average market(AZ, NV, etc.) and putting more down(yes cash at risk, for you guys that faint on that) or pivoting to equities or an alt source of an investment than doing anything in the midwest.

The math on that does not math. Assume you put enough down on something in Phoenix to reach $0 cashflow and calculate the return on equity, then do the same in the Midwest. Midwest wins every time. In fact if I were going to do the first, I'd prefer to just be in the stock market. Especially considering that you need much more reserves (dead idle cash) when doing these appreciation-focused plays in low cashflow markets.

That's the problem. Midwest cash flows on paper, never does in real life.

Phoenix will likely yield a true gain in appreciation. The math more than maths in practicality.

I must ask, do you have something to sell Midwest based?

Quote from @Mike D.:

Quote from @V.G Jason:

Quote from @Mike D.:

Quote from @Nicholas L.:

@Mike D.

your posts are usually really good so I just wanted to comment on "multiple turnkey properties in a high cashflow market."

there aren't really such things at the moment, at least in the short term - cash flow seems to ALWAYS fall short of the expectations of a new investor.  and buying multiple right off the bat seems risky.  

thoughts?

Hey Nicholas. I think that if you use reasonable leverage (let's say 50-60% LTV) to buy small multifamily in a market like Memphis or Cleveland, even if you screw some things up, you're very unlikely not to cashflow. Sure, he should give an extra "beginner's" buffer if he doesn't have other rentals.

 I am pro-concentration, but if you're going to concentrate those markets are not the one's to do that in. I understand lower barrier of entry, but there's a reason why. Relatively poor markets. The capital is better served elsewhere, in almost any case. 

As for OP, Taco bell is a great franchise to own if you get the right location & own the property. That makes it a lot harder, but yes in a nutshell. 

 I think that's generalizing quite a lot! If you are:

- Looking for great cashflow

- Willing to deal with the turnover and maintenance of C class properties

- Willing to accept modest appreciation

- Looking for the max total return you can get with 40-50% down

Then I would put these markets up against any markets. Basically, if you are someone with $100k to invest, I think these are some of the best markets. If you have $100m to invest, they are terrible--way too much work, don't at all meet the goals of institutional investors. However, note that OP has $100k.

 I'd rather just invest in mortgage notes or equities. Or put 30% down in a slightly more expensive city that can garner a higher upside like Phoenix, Dallas, etc.

Quote from @Mike D.:

Quote from @Nicholas L.:

@Mike D.

your posts are usually really good so I just wanted to comment on "multiple turnkey properties in a high cashflow market."

there aren't really such things at the moment, at least in the short term - cash flow seems to ALWAYS fall short of the expectations of a new investor.  and buying multiple right off the bat seems risky.  

thoughts?

Hey Nicholas. I think that if you use reasonable leverage (let's say 50-60% LTV) to buy small multifamily in a market like Memphis or Cleveland, even if you screw some things up, you're very unlikely not to cashflow. Sure, he should give an extra "beginner's" buffer if he doesn't have other rentals.

 I am pro-concentration, but if you're going to concentrate those markets are not the one's to do that in. I understand lower barrier of entry, but there's a reason why. Relatively poor markets. The capital is better served elsewhere, in almost any case. 

As for OP, Taco bell is a great franchise to own if you get the right location & own the property. That makes it a lot harder, but yes in a nutshell. 

You're honestly better concentrating your capital in an above average market(AZ, NV, etc.) and putting more down(yes cash at risk, for you guys that faint on that) or pivoting to equities or an alt source of an investment than doing anything in the midwest.

Quote from @Jason Eyerly:

Quote from @Collin Hays:

I don’t recommend RE until you have $100K in your account.  Be patient, save, and invest in a good index ETF.  Shortcuts could be very risky and set you back a decade.

It takes a while but you’ll get there.  When you reach $100K, you have something to work with. 

 I think it's unrealistic for a single man to save up $100k in any reasonable time in the current economy and job market. I was fortunate this year. Healthcare short staffing prompted a lot of bonuses and I'm gonna pull $40k this month with (24) twenty-four hour shifts and then I'm headed out west for fire season which will at least match if not surpass that and I'm owed $40k by my dad's estate. This is not the norm however and I'd have otherwise not been able to pull it off so quickly.

 False.

It's definitely harder to eat the costs of todays life, but not difficult to catch a healthy yield. You go at this with discipline and patience, and because of that most people fail at getting there.

Start planting some seeds, let the 8th wonder of the world work, then go from there.

FWIW, we get into STRs but with no more than 30% leverage. The original capital is all capital recycled from previous ventures.  The start of it was funds from 2017. Once you understand how to invest and make money, you then learn how to manage and save it properly to where you're working off all recycled capital.  Same risk with the capital, no risk to original capital, yet different emotion and arguably more impulsive but you learn your lessons there too and manage that. 

Hilarious people are telling him to not to be transactional, but expecting that in return. 

James you need a deeper rolodex. I would not recommend advertising here, cause most of them are terrible. My recommendation is going locally to meetings, or see who's funding flips, and seeing who's who, then doing your diligence.

It's not because they have high equity, it's because they are underwater. Coupled with agents using terrible 6-12 mo comps.

Like the other guy's example above after the 10 month project. Bunch of falling knives, people pull post July 4 and again after Labor Day then re-list next March. It's just going to keep increasing inventory on the following spring.

If you have to sell, you have to sell. When fall comes(seasonality based) for some markets, the folks that have to sell will set the tone for the folks entering March 2026. 

The solution to not having it count against your DTI is to relinquish majority control of the asset?

If you don't want it to count again, form a relationship with a local credit union. Be prepared to put north of 50% down.

According to your chart, still a couple years away.

I still have had no luck to break in; on the outside looking in.