What would YOU like to learn about real estate investing?

[BrandonS85]

One of the projects I'm seriously taking on this year is to record the entire process of starting out, finding a cashflowing property, purchasing it, rehabing it , marketing it and earning residual monthly income from it.

As of today I've bought 49 rentals since July 2013, with another 2 under contract set to close in about 2 weeks. They make great cashflow, but on top of it I've set back a massive nest egg in terms of equity for some time down the road should I ever desire to wind down what I do. My goal is 500 rentals over say the next 5-7 years. At that point I expect to have no less than $25m in properties + $1m/yr in residual income AFTER outsourcing it all to a property management firm I'll be founding at some point in the future, in order to offload my workload onto other people and make it more fastlane-ish.

So, as a part of this, I'm reaching out to all the online communities and asking what YOU would like to learn about real estate investing. My hope is to take the top questions I get and show how things work in an actual, operating business that I run that is actively buying/investing/making money.

The top question so far has been "Where are you finding good real estate deals" so I put together a 17m video going over every single rental I've bought through today. I'm looking for input on format, pacing, editing and what ever else people want to give feedback on, but most importantly I want feedback on my video content.

Here's the first one -

View: https://www.youtube.com/watch?v=yVhP0-fzd7s


One suggestion I've had, which I may very well do is do a 3-4 minute video per property and talk about the history, and go into detail of how I got em, cashflow, my costs and whatnot.

 

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[Sauce]

Love love love the idea.

Can you talk more about how you are managing your properties? I have 10 SFRs and 8 unit apartment complex.

It seems like the hardest part is getting them filled with quality tenants.

Are you using any software to help manage them (Buildium, Yardi, etc)

How do you manage maintenance requests?

How much do you average in expenses in the following categories:
Repairs
Capex
Vacancy

Thanks for putting this together!

 

[Niptuck MD]

thank you for this info. i am seeking an apartment rental type as well 30-50 units with 3 potentially 5 investors. doesn't have to be luxury but practical situated near boom manufacturing here in SC. my question is how do you come about these good properties because loopnet is unimpressive these days and realtors are really subpar and the best ones don't bother with individual investors only big time types.... really struggling finding the property that makes fiscal sense (as is everyone else) but i mean there has to be some good formula or at least process or routine right


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[BrandonS85]

Love love love the idea.

Can you talk more about how you are managing your properties? I have 10 SFRs and 8 unit apartment complex.

It seems like the hardest part is getting them filled with quality tenants.

Are you using any software to help manage them (Buildium, Yardi, etc)

How do you manage maintenance requests?

How much do you average in expenses in the following categories:
Repairs
Capex
Vacancy

Thanks for putting this together!

I use remember the milk from the play store. When I get a request I put it in the app, tag the location and pick one of my crew members to head up the repair job, so far it works great.

Other than that, everything else i use is just kind of thrown together. Right now Facebook accounts for 80%+ of my tenants, I have one of the largest real estate pages in the state, and I'm pretty sure the biggest rental page in the region, each property I post gets 8,000-10,000 organic views and it results in tons of applications.

We budget 15% for capex + repairs, 2 year average was like 7.8% or so looking at quickbooks. Vacancies are absurdly high right now, something like 12%, not so much because of pure economics due to bad tenants, but due to me overloading my work crew too much. For the past 3.5 years I've had my maintenance crew do rehab when we buy places, which has been more inefficient (I'm testing this out now) than having full time maintenance + a general contractor. Once we get over the slump, I think we'll be below 5% which is good considering the average price I spend is $35k/property or so.

 

[BrandonS85]

thank you for this info. i am seeking an apartment rental type as well 30-50 units with 3 potentially 5 investors. doesn't have to be luxury but practical situated near boom manufacturing here in SC. my question is how do you come about these good properties because loopnet is unimpressive these days and realtors are really subpar and the best ones don't bother with individual investors only big time types.... really struggling finding the property that makes fiscal sense (as is everyone else) but i mean there has to be some good formula or at least process or routine right


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We will go over this in one of the first videos , but you have to find a edge on the rest of the market. Loopnet is what hedge funds use and you don't want to spend hedge fund money to buy something, they tend to have access to immense amounts of capital at 3%-4% rates all day long.

If I were to go to a large metro area, I'd say send hand-written letters to every.single.person. who owned a multi-family property with my target market. I'd also do followup calls and letters after that point. You could have a pretty amazing conversion rate on something like that. I recently sent 150 hand-written letters out in one geographic region to property owners with high estimated equity. Something like 35% of them called me back, I don't know about you but I find a 35% callback rate on one letter kind of amazing.

 

[Michał Kóska]

How did you start? Investor, your own money? I'm into this topic, however getting the 1st property without a loan is out of reach right now.

 

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[BrandonS85]

How did you start? Investor, your own money? I'm into this topic, however getting the 1st property without a loan is out of reach right now.

Started SEO company, sold it, took money from that and hired a lawyer to help me obtain private financing. Used $5k for legal fees + $25k for equity and used it to leverage very, very well and started the ball rolling on it all.

 

[Michał Kóska]

What is the average price you pay for the property? No need to know exact pricing, bracket would be fine. I need this for comparison to my market. Thank you

 

[BrandonS85]

What is the average price you pay for the property? No need to know exact pricing, bracket would be fine. I need this for comparison to my market. Thank you

~40k or so

 

[jon.a]

~40k or so

Where in Ohio?

 

[BrandonS85]

Where in Ohio?

South of Columbus a few miles

 

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[jon.a]

South of Columbus a few miles

I went to High School in Springfield.

 

[SteveO]

I went to High School in Springfield.

Did you know my friend Homer?

 

[Espectro]

Wow I have so much to learn. Investing in Real Estate is something that interests me very much though I have never actually dug deep to learn all the tactics and tricks to finding a property to invest in because I have never had the money but now I have a decent amount. I am wondering so did you (anyone in this thread really) start off by investing in a Condo and renting it out and then if the market goes up you sell the Condo for profit and repeat the process? If so it reminds me alot about Stocks where you buy, hold, and sell. I live in Las Vegas and I think I want to invest in a condo near the strip (10-15 mins max) and put it on AirBnb to see how it goes. Would this be a good move? The market in Las Vegas in steadily rising and I have about 35k-40k in which I can invest in Real Estate with. Is it better to invest in a Condo, Townhouse, or a house?

 

[GoodluckChuck]

How far away from where you live do you look for homes? Do you buy in a small or large area?


Would you even consider doing what you're doing in a place where the average home price is 250k+?

 

[Sauce]

I use remember the milk from the play store. When I get a request I put it in the app, tag the location and pick one of my crew members to head up the repair job, so far it works great.

Other than that, everything else i use is just kind of thrown together. Right now Facebook accounts for 80%+ of my tenants, I have one of the largest real estate pages in the state, and I'm pretty sure the biggest rental page in the region, each property I post gets 8,000-10,000 organic views and it results in tons of applications.

We budget 15% for capex + repairs, 2 year average was like 7.8% or so looking at quickbooks. Vacancies are absurdly high right now, something like 12%, not so much because of pure economics due to bad tenants, but due to me overloading my work crew too much. For the past 3.5 years I've had my maintenance crew do rehab when we buy places, which has been more inefficient (I'm testing this out now) than having full time maintenance + a general contractor. Once we get over the slump, I think we'll be below 5% which is good considering the average price I spend is $35k/property or so.

Thanks for the answers.

The Facebook page is an interesting angle. If you were to come in to a new market, how would you start a fb page for rentals? I love the idea and am going to do it, would like to shortcut the process though.

Can you talk about what kind of labor you are getting? Where do you find them, so you pay by the job or by the hour. Thanks again for doing this!

 

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[BrandonS85]

How far away from where you live do you look for homes? Do you buy in a small or large area?


Would you even consider doing what you're doing in a place where the average home price is 250k+?

It really would depend on what the cap rates I could get are, some areas just aren't GREAT for investing but still can be good.

County I personally live in is 58k with the main town being 14k population-wise, I can walk to every single one of my rentals in this town within 15 minutes.

I have rentals in a second area which has a county population of around 78k with a city population of 23k or so. I'm looking at also expanding to a county with a population of 40k and city of 13k which is extremely sluggish and has amazing metrics (Passed on a triplex someone sent me for $30k and it was livable!) and another, larger one with a county population of around 150k and city population of 42k or so.

Columbus has a population of ~700k with a county population of something like 1.1 million, the entire metro region (Which includes my county and most I want to invest in are around 1.6 million).

My thing is : If I lost it all, would I mind driving to the houses and painting them or cleaning them out if I was desperate. I know a few guys that self manage 100% of their rentals, so in the back of my mind that's always a backup plan if it all falls apart. Doing IM/AM really burnt me every time Google decided to ban something, so I'm quite paranoid that something crazy will happen. Granted, historically the risk of that is quite low.

Will post a fun video Monday, had someone offer to GIVE me a house this week, I will most likely turn it down. Really interesting series of events.

 

[startinup]

Stealing a BiggerPockets Question...

What do you think sets apart real estate investors who fail from those who don't succeed?


Some original ones:

What factors do you look when deciding on a location to invest in, for different investment strategies? (I'm only really interested in small multifamily and apartments, but I'm sure others would benefit from single family, commercial, etc. being discussed too)

What have you been doing and what do you plan to do in order to make your business more passive?

-----

We both have similar goals in real estate. However, you are much further along as of now.

Thanks for the thread! This is definitely an interesting topic

 

[GoodluckChuck]

My thing is : If I lost it all, would I mind driving to the houses and painting them or cleaning them out if I was desperate. I know a few guys that self manage 100% of their rentals, so in the back of my mind that's always a backup plan if it all falls apart. Doing IM/AM really burnt me every time Google decided to ban something, so I'm quite paranoid that something crazy will happen. Granted, historically the risk of that is quite low.

What are you referring to here?
Lost it all as in the market crashed?
What is IM/AM?

 

[BrandonS85]

What are you referring to here?
Lost it all as in the market crashed?
What is IM/AM?

Lost it all, as in got sued into oblivion and liens placed on everything (I know the guy as mentioned above who I guess embezzled money, he can rent his houses out but has no capital whatsoever). I hear stories every so often of crazy stuff happening, I've got multiple LLCs + millions in insurance, but always try to have a backup plan.

AM/IM = Affiliate Marketing / internet marketing - I used to run leadgen for various products online through SEO and adwords (Sometimes facebook) , made killings several, several times only to wind up back to square one when Google/Facebook/Whomever decided that they no longer liked what I was doing.

 

[DanaInvests]

Thanks for the video and responses. Best of luck to you in your goal to get to 500 houses! Any reason your goal wouldn't be however to get to a certain point and liquidate to fund a larger multifamily apartment complex? Similar question is it seems you are focusing on duplex and larger and not single family homes, is that more market based of what is available or something you are targeting specifically?

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[BrandonS85]

Thanks for the video and responses. Best of luck to you in your goal to get to 500 houses! Any reason your goal wouldn't be however to get to a certain point and liquidate to fund a larger multifamily apartment complex? Similar question is it seems you are focusing on duplex and larger and not single family homes, is that more market based of what is available or something you are targeting specifically?

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It would/could be possible, but my thought process is that once I have say 100-200 rental units (And at this rate, they'll all be smaller, SFD + duplex + quadplex style units) that THEN I will start looking at larger multi-family developments, and by that point i should have more than enough capital to start pursuing them. It doesn't have to be 500 units before we start looking at larger stuff.

The reason I'm targeting SFD + Duplexes is that hedge funds around here won't touch them because they're too hard to handle compared to just one big complex. Because of that, the're a gigantic cap rate spread - Large multi-family developments here have 8% cap rates or so, maybe 10%. That isn't too exciting. Duplexes can have cap rates of 20-50 depending on the deal. I'd rather have 50 duplex units at 25% cap rates and deal with 'duplex issues' than 100 apartment units at a 8% cap rate and less issues, in the end I'm certain I make more money.

 

[TheDillon__]

I'd love to get into Real Estate after I get a successful venture up to fund the initial purchase.

What do I want to know? What was your first property?
What unexpected issues did you discover in the process?
What properties should I look into on a shoestring ($10,000) budget?

 

[BrandonS85]

I'd love to get into Real Estate after I get a successful venture up to fund the initial purchase.

What do I want to know? What was your first property?
What unexpected issues did you discover in the process?
What properties should I look into on a shoestring ($10,000) budget?

Pretty much your only two options with an extremely low budget are seller finance, traditional bank finance with low amounts or to buy the world's biggest dump and DIY the whole thing.

I had a lady offer me a house this week for FREE. I'll be doing a video about it shortly, negotiated a potential deal together on Facebook while driving to a birthday party, it was pretty wild.

 

[AdamMaxum]

I'm brand new to real estate...soon to buy my 1st property with goal to rent out and then repeat.

Some questions I would have are..

1. How do you effectively estimate how much rehab a place needs and the budget of the rehab vs price of house? Do you have a general contractor visit before you buy to get an idea? How does that work. One of my fears is buying a cheap house and then needing to fix everything imaginable/money pit.

2. On that same note, after buying a house, do you rehab it till' it's acceptable to live in? The bare necessities? Or do you add nicer appliances, fix cosmetic things, etc.. too? I ask because if you spend X amount more making the place desirable you may be able to rent it out for more per month?

3. Is it possible to get any decent home price sales on the MLS / major sites like zillow, etc? Or do you have to go through other avenues..auctions/etc to get a decent deal?

Thanks

 

[BrandonS85]

I'm brand new to real estate...soon to buy my 1st property with goal to rent out and then repeat.

Some questions I would have are..

1. How do you effectively estimate how much rehab a place needs and the budget of the rehab vs price of house? Do you have a general contractor visit before you buy to get an idea? How does that work. One of my fears is buying a cheap house and then needing to fix everything imaginable/money pit.

2. On that same note, after buying a house, do you rehab it till' it's acceptable to live in? The bare necessities? Or do you add nicer appliances, fix cosmetic things, etc.. too? I ask because if you spend X amount more making the place desirable you may be able to rent it out for more per month?

3. Is it possible to get any decent home price sales on the MLS / major sites like zillow, etc? Or do you have to go through other avenues..auctions/etc to get a decent deal?

Thanks

#1 - I've been doing it more or less for a while and have it figured out. Now having said that, I'm gonna try and get a group of complete newbies to real estate and teach em how to do it this summer, record it all and use that for the youtube channel, hoping to see if it comes out well or not.

#2 - I rehab till I feel it's safe, secure and a decent fit for the market. Some stuff I do nicer, others I don't Right now I'm trying to figure out how to make something bullet proof AND look nice.

#3 - Sure, the thing about MLS you need to realize is that if it's price right, it will sell VERY quick so you need to be ready to look and buy immediately.

 

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[MMatt]

I like the idea of mailing letters to the multifamily owners in the area. How do you acquire their contact info? Town hall?

Currently owner occupy a duplex and struggling to buy a second property. Anything outside of the slums listed online is ~130k or greater around here and renting for ~1k per unit. Seems like I live in a really difficult market compared to all of the sucess stories I see online. Any tips for this situation?

 

[Scot]

I like the idea of mailing letters to the multifamily owners in the area. How do you acquire their contact info? Town hall?

Currently owner occupy a duplex and struggling to buy a second property. Anything outside of the slums listed online is ~130k or greater around here and renting for ~1k per unit. Seems like I live in a really difficult market compared to all of the sucess stories I see online. Any tips for this situation?

There are a couple services out there that pull county records. Agentpro247.com is a decent option. You can also sort by absentee owners and vacant property, which usually leads to better responses on mailer campaigns.

@BrandonS85, great thread! We definitely need some more RE guys on here. I'm making plans on easing into REI through land investing but the obvious transition would be to move into buying dwellings as well. Looking forward to that video!

Rep++ for all the great knowledge.

 

[BrandonS85]

I like the idea of mailing letters to the multifamily owners in the area. How do you acquire their contact info? Town hall?

Currently owner occupy a duplex and struggling to buy a second property. Anything outside of the slums listed online is ~130k or greater around here and renting for ~1k per unit. Seems like I live in a really difficult market compared to all of the sucess stories I see online. Any tips for this situation?

Call a local title company and ask if they will do it for you. After that, try your local county office (In my area it's the tax assessor) and look for non-owner occupied properties.

I sent out 150+ hand written postcards to non-owner occupied property holders in my area about 4 months ago. It generated 35-40 total calls. That kind of response is mindblowing, so there's definitely a way to do things.

 

[Sauce]

Call a local title company and ask if they will do it for you. After that, try your local county office (In my area it's the tax assessor) and look for non-owner occupied properties.

I sent out 150+ hand written postcards to non-owner occupied property holders in my area about 4 months ago. It generated 35-40 total calls. That kind of response is mindblowing, so there's definitely a way to do things.

What was your messaging? Post card, yellow letter, professional letter? We are only seeing 1-2 percent response rates.