All Forum Posts by: Wade G.

I watch it from time to time. It is entertaining and she is hot. Honestly though I don't see how she makes a single dime on any of these houses. The time, for goodness sakes the TIME, that she spends on one little aspect is just crazy. As I understand it she is a realtor and a mom and an investor. How she can spend the time to drive around town to different salvage stores to find a certain piece of old lumber to then take back, and sand down, and paint, and refab to fit and install just seems crazy. The Minihaha house for instance, I'm pretty certain she said on one show last year that she had bought that house two years ago and was just then able to get around to rehabbing it. She must have bought it for a song. Not to sure about her knowledge either. It irks me to see her in the previews using an electric chainsaw to cut the limb off a tree and working the saw back and forth like its a hand saw. Otherwise though I do like the show and I commend her for doing something on TV that I could never do. She seems to be very driven and doesn't mind working hard and I don't believe that is just made up and glamorized for the show. Nothing seems to stop her from getting what she wants...I think all real estate investors have to have that attitude.

Antonio, I think I can sympathize with your situation of no money. I have one of those jobs that pays poorly and certianly is not enjoyable. I have a useless degree that society does not need, and I work for a pathetic local governmental agency, and I have no marketable skills. What I did to ramp up the savings to apply to buy and hold properties was to buy a dump well below retail value and live in it while I fixed it up myself. I did that three times. From the first one I was able to refinance the house and take the proceeds to buy the next two. The fourth one I lived in for two years and sold for the tax free gains. I took that money and reapplied to more RE properties and so fourth. All the rental income I saved in a my real estate account. By about property number three the savings was adding up at a good pace. Currently the net payments from the rentals adds up enough each year to buy one property every year and half or so while maintaining a reserve account. I always like to have around 20k in a reserve fund because some years all heck breaks loose and the 20k is staying power to remain in business. Banks are requiring me to have six months reserves per house anyway so it gets tougher as you acquire more. My way was certainly not the ideal way but it was all I knew to do. It took a few years before the rental income started to get substantial but it did happen. I would consider this way to be a last resort but its just an idea I thought I would toss out there to ya.

I am a low volume buyer and in the past I have bought off the MLS or pocket deals from realtors. I get good deals that way but I think I could get better deals buying like a wholesaler. For my next purchase I thought I would change things up a bit and use direct mailing to find my next deal. I have a full time job so all I need is to buy one or two house a year for buy and hold. By researching old topics it seems that probate sales are a popular way to find leads. In my case I only want to buy in a few select neighborhoods that are close to where I live. These are neighborhoods that I know well so rental and sales comps are not a mystery. My thought was to just drive the areas and look for neglected homes and just use the repeated mailout method. Is driving for dollars really effective or is there a better way to find motivated sellers in select areas? I'm not sure about the bandit sign method since these areas are all in designated cities where there are applicable regulations against it.

Well I live in Clear Lake so I'll have to pass on this one. 45 traffic outbound that time of day would drive me crazy.

As a matter of fact I was thinking about showing up at the meet up.

Lifestyles is a good recommendation for a year or so just beware that they are somewhat disingenuous when it comes to real cashflow and the whole idea of passive income; nevertheless, they do teach a sound business model and I would say it is worth the $500. Considering you are an attorney I would assume you are likely a high income wage earner, with that in mind you may want to look into multi family rather than SFH. You may want to join the RICH club too. With all these RE mentoring clubs though you have be carefull and avoid the individuals within whose business model is just to take advantage of newbies and really offer nothing in return. As far as expenses go for SFH I have always just subtracted the PITI from the rent amount to get cashflow. Then I subtract another $150 for repairs and vacancies to get the real net cashflow. That has proven to work for me but I also do my own managent and any repairs that don't require a professional. Also, always have a large reserve account because its not if but when you have two vacancies, a slab needs repair, and an AC unit gets stolen all within the same couple of months that you will indeed need the staying power to remain in business.

Continuing with the above post (I pushed a wrong button or something). The point I was trying to make is I like to shoot for around $300- $350 cashflow after PITI per month. Then for real cashflow I take out another $100 - 150 per month (depending on the house) for vacancies and repairs. That is how I would typically analyze a deal. I also like to get some equity and use as little of my own money as possible. That may be wrong or wright with other investors but that has typically worked for me...except for one house that I never made a dime on even after owning it for seven years.

Well I'll throw in my two cents. You didn't mention the ARV of the house. I always like to know that I am buying well below retail market value. I also think your PI will be closer to $600 month assuming you are putting 20% down at a purchase price of 140k. I really have never taken the time to understand the 50% rule or the 2% rule. I will give you an example of a house I bought last year.

-ARV was 118k
-purchase price was 70k
-21k in repairs plus closing costs but I was only out of pocket 12K since I used hard money.

-Rented it for $1125
-Insurance is $105
-taxes are $205
-for repairs and vacancies I always figure about $110 per month
-PI is $466

I share your thoughts and I have come to the conclusion that SFHs are not worth the time and work that is put into them. I plan to keep the ones that I have but really don't plan to buy any more. It's not passive and just not lucrative enough for me to keep spending my time on. I just value my time too much as I get older. I hate to sound negative because I use to strongly believe in it. Now I find myself plowing as much money as I can into IRAs and I am entertaining the idea of REITS. I am only speaking of SFH though. Commercial and MF might be lucrative enough to spend the time on but I don't know since I have never invested in either one so I am not qualified to judge them.

I slowly built a small lawn mowing business in high school and college. Eventually graduated with a degree in environmental science. I now refer to my twenties as the lost decade of my life. I got a useless degree and tried to be a good employee. I now hate being an employee and regret the time, money, and effort spent on the useless degree. I am not a tree huger but I live in the largest petochemical area in the world so I thought it would be a good degree but I was wrong. Ugh!!!