Dallas Investment Property Club

[RaceTec]

Very Interested!

 

[Scott E]

If you get 20 people putting in $10k you've got $200k, how is that going to buy 10 properties?

 

[236eaglexp]

Interested

 

[Hammer]

This is really interesting. How do these things work on the back end? Who controls the money? Who decides how when where the money is allocated/reinvested? Is it like a huge board where things get decided on unanimously?

x2. How would that work?

I want the ability to hold more shares over time if this becomes lucrative.

 

[DrunkenSailor]

I am the portfolio manager for a company that has about 400mm in resi properties across the US and in Central and Eastern Europe. If you guys have questions on value, need contractor contacts, real estate agent contacts, help with evictions, etc... Please don't hesitate to shoot me a PM.

 

[shintoooo]

This is really interesting. How do these things work on the back end? Who controls the money? Who decides how when where the money is allocated/reinvested? Is it like a huge board where things get decided on unanimously?

x2. How would that work?

I want the ability to hold more shares over time if this becomes lucrative.

The way it would work would be to appoint 2 to 4 members to make the basic decisions (repairs, appliance purchases, etc...) and for major decisions like purchasing a new property or raising additional funds etc... it would have to be a majority vote type deal. That's how I have seen it done with my clients.

 

[Roaddawg]

interested

 

[DC-88]

The only bad real estate investment I ever made was in Dallas (Garland). One of my best buddies and I bought a 19 unit apartment complex with normal conventional style construction (not the acrylic texture sprayed drywall "siding" and other shitty construction methods they use out there) . We paid like 585k , did an LLC, put 20% down, and had a pre-payment penalty. Property tax alone was like $21,000 per year. Insurance was not cheap and we needed it. Management was not cheap. The building was in a decent area but tenants were rough. It was the only property manager I've ever had who ripped me off, and we had to switch at one point . A tenant drove a car through the front of a unit, eventually some were section 8 just to keep the place at 85% capacity. We got lucky and sold in 2007 to some poor bastard who paid us low 600's and even Paid our pre-payment penalty because he had a 1031 to complete.... Anyway if I did it again there I'd say at LEAST 50-60% downpayment would be mandatory but based on my previous Texas experience....I'm out It was just too far away I think was the main problem for us---

 

[Englewood]

If any of you guys have cash that you'd like to invest locally, we offer 12% on a min investment of $50k for flips that we do in San Diego county. We have one closing early August that has a little bit of investment room left if anyone is interested.

I bring in the investors for the purchase and my partner (Police Officer) and I fund the renovation. All investors are recorded as lenders on the property. We also provide a full financial breakdown that shows the costs and potential profits for investors to see that it is a safe investment.

 

[DrunkenSailor]

Sounds like this would be a good group to form a REIT.

 

[Englewood]

Sounds like this would be a good group to form a REIT.

Just stay away from Retail...Not sure now is the time to purchase residential investment property either.

 

[thetub]

Just stay away from Retail...Not sure now is the time to purchase residential investment property either.

x2

brick and mortar is getting killed and prices are at there peak...

 

[Bails]

Interested

 

[LargeOrangeFont]

Just stay away from Retail...Not sure now is the time to purchase residential investment property either.

That is my only concern. I don't know if holding until the next economic hiccup is a better way to go, and pick up something on sale.

In the end if you are in the property right, and making enough money that it is worth the effort, do you care if you bought high for a short term flip, or a long term hold?

 

[Englewood]

That is my only concern. I don't know if holding until the next economic hiccup is a better way to go, and pick up something on sale.

In the end if you are in the property right, and making enough money that it is worth the effort, do you care if you bought high for a short term flip, or a long term hold?

It really all depends on your long term goal...Rents aren't coming down anytime soon...If an investor is hoping for a steady return, and appreciation is only icing on the cake, it can be done now. I wouldn't personally buy for appreciation right now.

This is of course, my opinion, and you know what they say about opinions.

 

[LargeOrangeFont]

It really all depends on your long term goal...Rents aren't coming down anytime soon...If an investor is hoping for a steady return, and appreciation is only icing on the cake, it can be done now. I wouldn't personally buy for appreciation right now.

I agree there.

 

[73hondo]

I'm interested, I am in the Austin Market at the moment and we are slated to do the same, but the prices are higher and less to choose from here than DFW. Get in touch with me if this gets serious.

 

[thmterry]

Just stay away from Retail...Not sure now is the time to purchase residential investment property either.

What if the retail is Marijuana and you get rent plus a percentage of the gross? I heard Nevada ran out of pot already because it sold so fast

 

[Raffit78]

Nevada would be a good place with future forecasts as well as lower tax rates, no state tax.... etc

 

[coolchange]

I worked for a company that did this . Buy in foreclosure. Rehab ( my area). And hold mostly for appreciation.
The smart thing they did was hold each property in a separate LLC. When shit went sideways on one, as it can, it didnt affect the whole group.

 

[RiverDave]

Rod's reply in another thread really got me thinking...

Just a show of hands:
Any inmates interested in this?

For a conversation starter, I'm thinking it starts small.
A few folks chip in a little money ($5k - $10K each), to make a decent return on several properties.
Focus on rentals, ideally multis but also some SFH...maybe flips down the line.

The sky is the limit from there.

Consider:
Rents are high compared to purchase prices.
Population set to double in the next 15 years.

Not looking for anything more than ideas and possible interest at this time.
Posting here is in now way a commitment to be part of it, and I'm not making any promises to anyone at all.

I'm interested!

RD

 

[Activated]

RDSUX LLC
BNAG Properties
FuckBrown Investment Corp
Holbrook Holdings
HEY LAM Properties

Endless choices. :skull:tbi

 

[Waterjunky]

I am also interested in this. Of course we would need to put together a real plan with numbers and a specific focus area. I am more interested in the long term. In 20 years when I retire, income is obviously going to be a critical component of how that happens. I am already in the property market locally with a duplex here in the delta. I am looking at additional opportunities like this. If you can control yourself and only by when the time is right, there is good money to be made. I was cash positive from day one on my current duplex with 25% down.

 

[lbhsbz]

Definitely interested

 

[RVR2SNO]

Very interested!

 

[copterzach]

I am interested. Happens that I have my RE license also.

 

[copterzach]

RDSUX LLC
BNAG Properties
FuckBrown Investment Corp
Holbrook Holdings
HEY LAM Properties

Endless choices. :skull:tbi

 

[LargeOrangeFont]

RDSUX LLC
BNAG Properties
FuckBrown Investment Corp
Holbrook Holdings
HEY LAM Properties

Endless choices. :skull:tbi

Lanyard Holdings.

 

[pronstar]

I should have started the thread asking who WASN'T interested LOL

SHintoo Investment Trust.
SHIT just got real

 

[LargeOrangeFont]

I should have started the thread asking who WASN'T interested LOL

SHintoo Investment Trust.
SHIT just got real

Interest will wane when you ask for money

 

[Waffles]

Interest will wane when you ask for money

[video=youtube_https;1pTiWi6gsL0]https://youtu.be/1pTiWi6gsL0[/video]

 

[Ultra247]

Interested - When and where is the "meeting"?

 

[Raffit78]

Just got off the phone with my broker which happens to be a real estate lawyer and would gladly do a conference call with all of us for any questions.

 

[Mandelon]

The only time I lost money on a real estate deal was when I let someone else be in charge of it. That said, you can make good money if you buy during flat or down times, and rehab, re-rent and hold until the market comes back. :thumbsup

I Absolutely agree to buy and hold rentals. Too many partners and you dilute the returns, but you could easily do multiple groups.

 

[DC-88]

The only time I lost money on a real estate deal was when I let someone else be in charge of it. That said, you can make good money if you buy during flat or down times, and rehab, re-rent and hold until the market comes back. :thumbsup

I Absolutely agree to buy and hold rentals. Too many partners and you dilute the returns, but you could easily do multiple groups.

If I ever buy or go in on another apartment building it'll be in a state with low property tax, a college nearby who's enrollment is growing, and a good demographic (Flagstaff comes to mind). After we bought the one in Texas(in 04') me and my buddy used to chop ourselves and joke how much appreciation could we possibly hope to get compared to other markets since we were stuck with those high property taxes...

 

[Go-Fly]

Care to elaborate on your story?

Also suggestions for new investors? When you say commercial is this mostly warehouse space, retail space, multi family?

I can't seem to wrap my head around the future of 5-10 years and enough equity or money from rental income to re-invest without major outside liquidity investment.

For instance: you purchase retail space 3-4 million. 20% down 600-800k. Now a days this combo gets you 3-4% cap rate. That MIGHT make your mtg payment. So even in 5 years with rent increase how can enough profits come in to drop another 600-800k on a new property?
(Please excuse my ignorance).

Because if I can make a passive income of 100k a YEAR, I would be ecstatic!

All good questions. For starts, in a buyer club, you only deal in cash. Never take out a loan to buy property. What we bought were foreclosures and run down commercial property. Remodeled and turned them into 1000 square foot rentals for small businesses. Roll up door, man door, office in front and a bathroom in the back. That is how you pay your managers. Some we left as large properties with yard space. We sold a lot of the properties to the occupants. Back then, we were getting 9-11% interest, 20% down on a 10-15 year land sales contract. Most didn't make it. We took back the property, shorted all the seconds, fixed it back up if needed and started all over again. Holding papers is how you make the big money. It sound cruel but, that is how it works.

 

[LargeOrangeFont]

All good questions. For starts, in a buyer club, you only deal in cash. Never take out a loan to buy property. What we bought were foreclosures and run down commercial property. Remodeled and turned them into 1000 square foot rentals for small businesses. Roll up door, man door, office in front and a bathroom in the back. That is how you pay your managers. Some we left as large properties with yard space. We sold a lot of the properties to the occupants. Back then, we were getting 9-11% interest, 20% down on a 10-15 year land sales contract. Most didn't make it. We took back the property, shorted all the seconds, fixed it back up if needed and started all over again. Holding papers is how you make the big money. It sound cruel but, that is how it works.

No one with a yacht is nice all the time.

That is a great story.

 

[Raffit78]

All good questions. For starts, in a buyer club, you only deal in cash. Never take out a loan to buy property. What we bought were foreclosures and run down commercial property. Remodeled and turned them into 1000 square foot rentals for small businesses. Roll up door, man door, office in front and a bathroom in the back. That is how you pay your managers. Some we left as large properties with yard space. We sold a lot of the properties to the occupants. Back then, we were getting 9-11% interest, 20% down on a 10-15 year land sales contract. Most didn't make it. We took back the property, shorted all the seconds, fixed it back up if needed and started all over again. Holding papers is how you make the big money. It sound cruel but, that is how it works.

wealth of knowledge and thank you for sharing. I hope we can all take note from this and start looking at run down properties and try to duplicate what has worked for you.


:thumbsup

 

[X Hoser]

I am interested. My dad and I owned a real estate company in the 80's/90's. Real estate is always a strong investment over the long term. Just need to know your target market and not freak out over any market corrections.

 

[rrrr]

.

For everyone's information, here's some background info on the DFW market. New home permits exceeded the 2007 record last month. The median home price has gone from $149,000 in 2007 to $252,000 today.

The northern suburbs are growing like crazy. You guys all know about Toyota moving here. There are about eight other multibillion dollar companies building headquarters in the Plano/Frisco area, bringing 50,000 jobs.

Most of the new houses are selling for well over $300,000. That's a big change from 2007. In 2007 we bought a 2,300 SF two story in McKinney for my son, it cost $132,000. It is in a subdivision of similar homes, they are classic KB Homes cookie cutter models. It's now worth $225,000. The market for houses costing less than $165,000 is insane. They sell within hours. Investors buy most of them. The lower end of the spectrum is being priced out of reach of those looking for a starter house. Something like 70% of these lower priced homes are being purchased for rentals.

Rental properties in the $900-$1,400 range are hard to find, and when a property is put on the market it rents within a couple of days.

New builds are being pushed out further and further from the metropolitan area. Home values in Collin County are escalating like crazy. Here in Plano, a rental house two doors from me was vacated six months ago. It was a rundown piece of crap.

The new owner replaced all of the outdoor cedar siding and trim, replaced all the interior doors, put in new tile and laminate, remodeled the pool, replaced mechanical systems....well, you get the idea. They paid $167K for it, it's on the market for $320K.

Even more interesting is a two story across the street from me. It's nice, but looks a little dated inside. They did paint all of the cabinets and paneling, but you know it's a 1978 build. It sold for $187,000 in 2013, and it's been empty for three years. Last year there was lots of activity on the property, looked like paint and carpet were replaced and some foundation work was done (we have shifting clay soil here).

Two weeks ago a sign went up in the yard, and three days later "contract pending" was added to the sign. The asking price is $365K. I was pretty surprised. I've never seen a house listed at over $315K in my neighborhood.

As has been mentioned, because there's no income tax in Texas property taxes are really high. The taxes on a $240,000 rental property we own are almost $7K per year.

If you guys are going to get into the market, you'll have to be aggressive. I'm retired and not too mobile, but I could do legwork and run construction. I owned commercial construction firms in all sorts of disciplines for 30 years. I know some good residential subs in the area.

I could also do property inspections. As I said I've worked in every discipline there is, and more qualified to assess a property than a guy that has taken a couple of home inspection courses.

So I'll be around if this idea comes to fruition.

I hope this overview is helpful.

 

[Parker Dreamin]

Interested

 

[alexJ]

Interested

 

[Raffit78]

.

For everyone's information, here's some background info on the DFW market. New home permits exceeded the 2007 record last month. The median home price has gone from $149,000 in 2007 to $252,000 today.

The northern suburbs are growing like crazy. You guys all know about Toyota moving here. There are about eight other multibillion dollar companies building headquarters in the Plano/Frisco area, bringing 50,000 jobs.

Most of the new houses are selling for well over $300,000. That's a big change from 2007. In 2007 we bought a 2,300 SF two story in McKinney for my son, it cost $132,000. It is in a subdivision of similar homes, they are classic KB Homes cookie cutter models. It's now worth $225,000. The market for houses costing less than $165,000 is insane. They sell within hours. Investors buy most of them. The lower end of the spectrum is being priced out of reach of those looking for a starter house. Something like 70% of these lower priced homes are being purchased for rentals.

Rental properties in the $900-$1,400 range are hard to find, and when a property is put on the market it rents within a couple of days.

New builds are being pushed out further and further from the metropolitan area. Home values in Collin County are escalating like crazy. Here in Plano, a rental house two doors from me was vacated six months ago. It was a rundown piece of crap.

The new owner replaced all of the outdoor cedar siding and trim, replaced all the interior doors, put in new tile and laminate, remodeled the pool, replaced mechanical systems....well, you get the idea. They paid $167K for it, it's on the market for $320K.

Even more interesting is a two story across the street from me. It's nice, but looks a little dated inside. They did paint all of the cabinets and paneling, but you know it's a 1978 build. It sold for $187,000 in 2013, and it's been empty for three years. Last year there was lots of activity on the property, looked like paint and carpet were replaced and some foundation work was done (we have shifting clay soil here).

Two weeks ago a sign went up in the yard, and three days later "contract pending" was added to the sign. The asking price is $365K. I was pretty surprised. I've never seen a house listed at over $315K in my neighborhood.

As has been mentioned, because there's no income tax in Texas property taxes are really high. The taxes on a $240,000 rental property we own are almost $7K per year.

If you guys are going to get into the market, you'll have to be aggressive. I'm retired and not too mobile, but I could do legwork and run construction. I owned commercial construction firms in all sorts of disciplines for 30 years. I know some good residential subs in the area.

I could also do property inspections. As I said I've worked in every discipline there is, and more qualified to assess a property than a guy that has taken a couple of home inspection courses.

So I'll be around if this idea comes to fruition.

I hope this overview is helpful.

7k per year for taxes on a 240k house. Makes me cringe. Our silent partner is making more money then all of us combined.

 

[LargeOrangeFont]

7k per year for taxes on a 240k house. Makes me cringe. Our silent partner is making more money then all of us combined.

That is the cost of doing business sadly, and why people are moving there. Good news is that the high property tax will keep many from buying as house values spike. Renting is going to be the go to living situation for millions more people as house values are driven further up.

 

[rrrr]

.

7k per year for taxes on a 240k house. Makes me cringe. Our silent partner is making more money then all of us combined.

.

Turns out I was looking at my home taxes, not the rental property. Those taxes are more like $4,100. The property is in a small town and the school taxes are much lower than those in Plano.

The house across the street has been sold, and the realtor sign is gone. I protested my property taxes this year and have a hearing in August. It doesn't help much when two houses within spitting distance of mine sold at +-$350K.

 

[LargeOrangeFont]

.



.

Turns out I was looking at my home taxes, not the rental property. Those taxes are more like $4,100. The property is in a small town and the school taxes are much lower than those in Plano.

The house across the street has been sold, and the realtor sign is gone. I protested my property taxes this year and have a hearing in August. It doesn't help much when two houses within spitting distance of mine sold at +-$350K.

That is much better.

I would take that tax bill over paying my CA income tax and property tax any day. Even when it was $7k

 

[Sleek-Jet]

.

For everyone's information, here's some background info on the DFW market. New home permits exceeded the 2007 record last month. The median home price has gone from $149,000 in 2007 to $252,000 today.

The northern suburbs are growing like crazy. You guys all know about Toyota moving here. There are about eight other multibillion dollar companies building headquarters in the Plano/Frisco area, bringing 50,000 jobs.

Most of the new houses are selling for well over $300,000. That's a big change from 2007. In 2007 we bought a 2,300 SF two story in McKinney for my son, it cost $132,000. It is in a subdivision of similar homes, they are classic KB Homes cookie cutter models. It's now worth $225,000. The market for houses costing less than $165,000 is insane. They sell within hours. Investors buy most of them. The lower end of the spectrum is being priced out of reach of those looking for a starter house. Something like 70% of these lower priced homes are being purchased for rentals.

Rental properties in the $900-$1,400 range are hard to find, and when a property is put on the market it rents within a couple of days.

New builds are being pushed out further and further from the metropolitan area. Home values in Collin County are escalating like crazy. Here in Plano, a rental house two doors from me was vacated six months ago. It was a rundown piece of crap.

The new owner replaced all of the outdoor cedar siding and trim, replaced all the interior doors, put in new tile and laminate, remodeled the pool, replaced mechanical systems....well, you get the idea. They paid $167K for it, it's on the market for $320K.

Even more interesting is a two story across the street from me. It's nice, but looks a little dated inside. They did paint all of the cabinets and paneling, but you know it's a 1978 build. It sold for $187,000 in 2013, and it's been empty for three years. Last year there was lots of activity on the property, looked like paint and carpet were replaced and some foundation work was done (we have shifting clay soil here).

Two weeks ago a sign went up in the yard, and three days later "contract pending" was added to the sign. The asking price is $365K. I was pretty surprised. I've never seen a house listed at over $315K in my neighborhood.

As has been mentioned, because there's no income tax in Texas property taxes are really high. The taxes on a $240,000 rental property we own are almost $7K per year.

If you guys are going to get into the market, you'll have to be aggressive. I'm retired and not too mobile, but I could do legwork and run construction. I owned commercial construction firms in all sorts of disciplines for 30 years. I know some good residential subs in the area.

I could also do property inspections. As I said I've worked in every discipline there is, and more qualified to assess a property than a guy that has taken a couple of home inspection courses.

So I'll be around if this idea comes to fruition.

I hope this overview is helpful.

So what you are saying is everyone should have done this deal 3 years ago.

 

[AzGeo]

a "half built project" that ran out of money ?

Apartments, condos, small strip malls ?

IMO, single family homes are; "boom or bust", while multiple unit properties should be able to "float" even when not 100% rented out . (talking about borrowed money here)

I've worked on projects like this in the past, some were in the right local, others were just mistakes from the start , and no one dared touch them .

IF the project looks RIGHT, the city will be HAPPY to help anyone get the thing finished and on the tax rolls . (it's been already approved, so inspectors often HELP instead of hinder on these)

Don't know how Texas treats "renters with children", but I would never do anything like what you guys propose in a state like California . I would KNOW all the RENTERS LAWS, BEFORE I jumped into any project .

How are the "property insurance rates" in the Texas local you are looking at ? Some areas have price and contract clauses that could kill this whole plan .

I think there would be plenty of "profitable target properties" in the Vegas area, considering all the angry Californians leaving the taxes, crime and confusion and seeking a better place, right across the border .

I mention Vegas because I don't know enough about Texas and have never gone past the insurance issues I found in the past .

In my last 3000 words or less, I might add that with all the "craftspersons" on this site, you should consider "sweat equity", where the cartel would receive high quality of work and materials, while having less outgoing cash expenses in the beginning .

A "value of partnership" for a certain completed project . (plus or minus the materials) In this way you may dilute some profits, but will retain CASH for other areas .

Good luck, stay focused !

 

[Go-Fly]

No one with a yacht is nice all the time.

That is a great story.

We no longer have the big boat. When we were looking, we ran across this boat that the owners couldn't afford anymore because of hits they took during the recession. The sellers had bought it new for their retirement and really didn't want to sell it. I cut a deal with the bank to pay up all the back payments, do all the delayed maintenance's, signed a lease and then prepaid three years of interest. We cruised for three years and in that time, the owners were able to get back on their feet. The bank stayed whole, the owners got their boat back in better condition then when it left and we had the time of our life. Because the generators ran 24/7 for three years, the wife and I decided to replace them both when we got back into Portland. The original owners met us in Portland and crewed it back to Seattle. The day we pulled our bags off ship the wife cried all the way home. My point in all this is, there are all kinds of deals out there if you have cash. Never be afraid to offer a price that works for you.

 

[Raffit78]

bump





Did we lose all of our investors already?


Who's going to take the initiative? What is the cost of that?

Dallas, Nevada, Arizona, California,

I think Shintooo needs to throw a house warming party at his (soon to be) new pad and start this ball rolling