All Forum Posts by: Dooreuhn Cee

@Denise Cagle Looks like your mentorship has already started from these responses.  Keep reading the forums and listen to the podcasts to continue.  Also, check out a local real estate club. 

I own in both markets as well.

I moved to the San Jose of the Bay Area in 2001 and my rent was $2,500 and it was a fair market price (dot com boom).  In 2002 (or 2003), I renegotiated my rent to $2,150 (dot com bust); although market value was $2,000 the cost of move made me stay.  So rent appreciation can be unstable.

Today is, I think, the absolute highest peak that rents have ever been in the Bay Area.  Another indicator of possible instability.  Better buckle up.  I got into San Jose real estate market in 2004 and had a similar experience as you in prices going up up up.  You already know the rest of that story.

Finally, the hypothetical presented here assumes $0 equity appreciation in the midwest, along with $0 rent appreciation on the coast, for simplicity.  Your analysis only  erodes one side of that assumption without acknowledging the fact that midwest properties will appreciate.  In fact, IMO, midwest will outpace coastal equity appreciation because coastal markets are back to near peak values (at least in the Bay Area), while midwest homes are still drastically discounted from peak values (in particular the areas that you and I invest).

Therefore, I am personally shying away from coastal markets in favor of midwest cash flow.

I'm planning to attend.  Look forward to meeting everyone.

I had a similar start to you.  Bought a personal that went up in value (in an upward market, so no rehab) and refinanced six figures to spring into other projects.  It led to a high metabolism of buy and sell deals.

Unfortunately, I continued high-leverage and was exposed when the prices fell quickly.  In my second run at this, I am using almost no leverage and keeping my number of units down.

Keep up the great work!

Personally collecting rent is a bad habit that is hard to break for tenants.  I have mine deposit to a bank account.

@Jonathan Steingraber  I bet if you informed seminar folks about BiggerPockets podcasts and forums, and advised that they indulge for one week before investing in FB, it would drastically cripple your business.  

As mentioned above, put your politics to the side when deciding on an investment strategy. Here is my summary of section 8 from experience:

- loss of income during inspection process

- additional monies spent due to section 8 repairs that cash tenant would not require

- range of experience with section 8 tenants similar to cash tenants that rent houses in the same types of neighborhoods

- section 8 only pays a portion of rent, and ironically, pays less for those that have income compared against those that do not work at all, ie, no income means 100% section 8 payment, so all vouchers are not created equally

- have to satisfy 2 different entities, both section 8 and the tenant, and risk that either does not make payment (section 8 does stop payments for various reasons)

Currently, I rent my lesser desirable properties section 8 as I am able to attract great cash tenants for the better ones.  

Time is money.  Just work out a deal with a contractor for a no strings attached, per property assessment.  

You could also just ask for estimates on potential properties, but eventually the contractor will get annoyed with theoretical jobs.

^^^^^^^What @James Wise said. 

Scary proposition but I have done this a few times with auction.com and currently have a contract for an occupied property. Think of the upside - if there was no tenant, the property would likely be on MLS for a higher price.

More specific to my experiences, one time the occupants moved out a few days before the sale closed.  One time I contacted the occupants and agreed to move them to one of my other properties (which I eventually evicted them from, but really just wanted them out of the better property). 

One time was very crazy.  I left a note on the door explaining that I wanted to help the occupant stay in the property.  10 minutes later, I got a call from someone in my phone contacts saying that I just left a note on his home.  Turns out I had business dealings with the occupant before, and we had many common friends.  He wants to buy the house back.  So I made a deal with him to stay at a rental price for which I will make no repairs.  In the last year, I've recovered 1/3 of my investment off that deal. 

In each deal, I budgeted a certain amount for court costs.