Cash is King

[Derron]

That means a young person who makes good money. Not some fucking shit troll jizz mopper.

Ok, cunt. Aside from your jarhead sons, how many 26 y/os do you really think have amassed $60k of their own money in savings in their first four years out of college. YOu know, in a time when new college grads are struggling to find work and live on their own, all of the sudden according to you they're accruing $60k in savings because "they're making 'good' money." Provide specific examples and specific career paths and also define what you consider "good money." I'm sure it'll be a laugh riot. Take your time.

Since you hang out with all those jizz jerkers , you would not know a successful kid if you were sucking his dick. How about this path,and since you cite my jarhead boys look at this:

Military 4 years 22 years old. One term short of associates degree while in school.
Muster out and work full time, and go to school full time on VA program. Bachelors degree in useful field in 2 years.
Work a self employment gig flipping a couple of houses for a bit, apply to high tech company and get hired at 48 K per year.
Prove your worth at high tech company and get promoted to supervisor and make 75 K per year. Live well under your means and bank the rest. 26 years old.
Buy house on private contract and rehab house. Live in the house, get house valued at 160K, your cost is 110. Rent house for positive cash flow while buying another house.

Lots of kids out there doing well. More power to them.

[Derron]

And contrary to popular belief there is a lot of 20 -20 somethings out there that have some good money. In the last 2 years, my son has bough and rehabbed 3 homes. Lives in the last one he bought, and rents the other 2 out for $ 600 positive cash flow per month each. He will probably buy another one later this year, since we are seeing NO upward pressure on pricing in the market right now. If I was 26 and had 60K to work with, I probably would be looking at least 2 properties, one for sure. Fucking buyers market right now.

I'm assuming he's buying these under the auspices of taking them as his primary residence? - then moving out and renting the property when he finds his next buy?

In that case he's minimizing his down payment to what %?

Investment real estate still requiring 20% down last time I inquired

If you are going with bank financing. Distressed properties with private owners just about any deal can be reached. We identify the properties based upon location, condition and tax status. We find the right one, make a win win deal with the owners, get their asses out of the hole, and we get a great property. It is in how you rehab the properties and what you intend to do with them.

[Derron]

You have a business, and cash flow is tight. To make payments to your vendors you take money from your personal funds and write yourself an IOU that eventually when the business does better, you'll pay yourself back.

Just a fucking brilliant idea.

Now eventually you will go broke along with the business is business doesn't improve, but at least you've bought yourself time to try and improve it.

Huh ?

If your business is in that situation you were fucked a long time ago. When you can't make your payroll and pay your vendors, you are fucked regardless of what caused it. If you put more of your own money into it, with out a clear plan as to how you are going to get it back out. then you are just gambling. Simple financial management practices can be used to model the most likely outcomes. The scenario you lay out has multiple flaws with the rationale. But you know that.

[War Wagon]

Duhron

The scenario Scott proposes takes into account that said business man does indeed have a "clear plan" of how to get it back.

you shouldn't wonder why people here call you "DUHron".

[Derron]

Duhron

The scenario Scott proposes takes into account that said business man does indeed have a "clear plan" of how to get it back.

you shouldn't wonder why people here call you "DUHron".

OK War Wanker..career forklift driver and since you have 30 years in at one company and such a wide experience in business pay the fuck attention.

If your business is a a point where you have to inject personal funds to cover operating costs, payroll, taxes or any other expense, you are fucking gambling that you are going to get it back. You may have a plan in your mind, you may give yourself that IOU that KScrote loves, but shit has to go right for you to get your money back out of it.

Been there and done that. One fucking time. Business people can have all the clear plans they want, but the next day can bring about something that can change those plans completely. If you ever had to meet a payroll, honor a contract, and pay bills with your own fucking money, you might understand that. But since you got 30 years in working for the man, shut the fuck up.

[War Wagon]

Derron, all gratuitous insults aside...

That's exactly what the family who owns my company did. Three generations worth of them put up their own savings, homes, whatever they owned, to stay in business thru 2009 and into 2010.

Why'd they do it? Because losing a business the old man started in his basement in 1955 wasn't an option and neither was failure. The few employees like me who were left made sacrifices too. No vacation, no 401k match, no insurance for awhile. All salary employees took at least a 15% pay cut. Hourly employees had their hours cut. Supervisors were out on the floor running machines, welding, driving forklifts, whatever we could do to help and thankful we still had jobs when so many had lost theirs

That was a rough time, but we made it thru. Excuse me if I celebrate a bit now and tell you to take your gloom and doom forecast and shove it.

[Derron]

So you're buying the properties cash then?

If not, you didnt answer what % youre putting down to get the loan

Usually some kind of minor down payment under 10k, and then we pay nothing until we get the property to a condition where we can get financing on it. We end up putting another 20 to 30K cash into the property, but they usually appraise out at 200% of what we have into them, making finance easy.

[Felix]

In the last 2 years, my son has bough and rehabbed 3 homes. Lives in the last one he bought, and rents the other 2 out for $ 600 positive cash flow per month each. He will probably buy another one later this year, since we are seeing NO upward pressure on pricing in the market right now. If I was 26 and had 60K to work with, I probably would be looking at least 2 properties, one for sure. Fucking buyers market right now.

no upward pressure on homes in the 100k to 200k price range?
I don't know which part of Oregon you live in, but it's apparently a place where supply and demand disequilibrium rules are not applicable......statewide, the inventory of houses in the 100k to 200k price range have an average supply of about 3 months...that's contrasted with houses in the 201k to 300k range which have an average supply of about 5 months....301k to 400k at around 6 months.....if there isn't upward pressure on housing prices in the 100k to 200k range, I'd suggest you move as quickly as possible, because your living in bizzaro world....

[R-Jack]

Can we just make sure the home prices stay down until after I buy my ex out?

[Derron]

In the last 2 years, my son has bough and rehabbed 3 homes. Lives in the last one he bought, and rents the other 2 out for $ 600 positive cash flow per month each. He will probably buy another one later this year, since we are seeing NO upward pressure on pricing in the market right now. If I was 26 and had 60K to work with, I probably would be looking at least 2 properties, one for sure. Fucking buyers market right now.

no upward pressure on homes in the 100k to 200k price range?
I don't know which part of Oregon you live in, but it's apparently a place where supply and demand disequilibrium rules are not applicable......statewide, the inventory of houses in the 100k to 200k price range have an average supply of about 3 months...that's contrasted with houses in the 201k to 300k range which have an average supply of about 5 months....301k to 400k at around 6 months.....if there isn't upward pressure on housing prices in the 100k to 200k range, I'd suggest you move as quickly as possible, because your living in bizzaro world....

Tel me you know the difference in available inventory, market demand and price levels. They are generally accepted price levels right now, the only thing that will push them up is the people wanting that one house real bad. There is a huge difference between what a house should bring and what it will bring. Condition is everything. We are not looking for top shelf near new condition homes.

In the 100 to 200K market, inventory is of course tighter. But there are more people looking for those homes. We could care less about any home above 220 right now. Just does not fit our model.

[Derron]

Derron, all gratuitous insults aside...

No fucking way there Wags...we been slinging these for over 10 years, can;t stop now.

That's exactly what the family who owns my company did. Three generations worth of them put up their own savings, homes, whatever they owned, to stay in business thru 2009 and into 2010.

Why'd they do it? Because losing a business the old man started in his basement in 1955 wasn't an option and neither was failure. The few employees like me who were left made sacrifices too. No vacation, no 401k match, no insurance for awhile. All salary employees took at least a 15% pay cut. Hourly employees had their hours cut. Supervisors were out on the floor running machines, welding, driving forklifts, whatever we could do to help and thankful we still had jobs when so many had lost theirs

That was a rough time, but we made it thru. Excuse me if I celebrate a bit now and tell you to take your gloom and doom forecast and shove it.

Props to them and to you. That type of action and what the employees did truly saved the company. Each situation and area is different. I don't have a gloom and doom forecast. I simply state that we do not see that type of positive growth here in the west. Hopefully it will come.

[Felix]

Tel me you know the difference in available inventory, market demand and price levels.

real estate analysis is what I do for a living....lets go back to a previous post of yours

Distressed properties with private owners just about any deal can be reached. We identify the properties based upon location, condition and tax status. We find the right one, make a win win deal with the owners, get their asses out of the hole, and we get a great property. It is in how you rehab the properties and what you intend to do with them.

distressed properties are distressed because typically the owner is upside down on the house, meaning they owe more than the property is worth....now simply because they want to get out from underneath the property doesn't satisfy what is owed on the property.....take for example the house you supposedly bought for $110,000, dumped $20k to $30K into to make it worth $160,000. How much was owed on the original mortgage? If it was distressed, I'm assuming the property owner owed more than $110,000 on the note. If so, you had to go short sale route, which typically consists of getting two financing enties to agree to sell the property at below what they have the property on their books at. Getting financing entites to agree on anything is shall we say, difficult at best. Now, if the property owner owed less on the original note than what the property was currently worth, it wouldn't be considered distressed....so how are you defining "distressed"?

In the 100 to 200K market, inventory is of course tighter. But there are more people looking for those homes. We could care less about any home above 220 right now. Just does not fit our model.

so, more people looking doesn't translate into increased demand, hence increased prices? dude, where were you when they were teaching economics 101?

[Derron]

real estate analysis is what I do for a living....lets go back to a previous post of yours



distressed properties are distressed because typically the owner is upside down on the house, meaning they owe more than the property is worth....now simply because they want to get out from underneath the property doesn't satisfy what is owed on the property.....take for example the house you supposedly bought for $110,000, dumped $20k to $30K into to make it worth $160,000. How much was owed on the original mortgage? If it was distressed, I'm assuming the property owner owed more than $110,000 on the note. If so, you had to go short sale route, which typically consists of getting two financing enties to agree to sell the property at below what they have the property on their books at. Getting financing entites to agree on anything is shall we say, difficult at best. Now, if the property owner owed less on the original note than what the property was currently worth, it wouldn't be considered distressed....so how are you defining "distressed"?

In the 100 to 200K market, inventory is of course tighter. But there are more people looking for those homes. We could care less about any home above 220 right now. Just does not fit our model.

so, more people looking doesn't translate into increased demand, hence increased prices? dude, where were you when they were teaching economics 101?

Typical analyst take.

Maybe my term of "distressed" is confusing you. We look for properties that are in a less than stellar condition, privately owned with little or no paper against them. Sellers have a number of reasons for why they have not made the property suitable for sale, none of which we really give a fuck about. Our strength lies in our ability to make that house suitable for sale and finance, in a short time frame, with minimal expense while meeting code and financial requirements.

We do this with repurposed material purchasing, very tight project management, and correct property selection, and keeping our sub contracting under control. You can analyze this all you want how ever you want to, but it works for us. Keeping financial institutions out of the picture until we are ready to sell, is what makes this all work.

[smackaholic]

We look for properties that are in a less than stellar condition, privately owned with little or no paper against them.

Might as well beat you fukks to it.

No, I am not interested in selling.

[Felix]

Maybe my term of "distressed" is confusing you. We look for properties that are in a less than stellar condition, privately owned with little or no paper against them. Sellers have a number of reasons for why they have not made the property suitable for sale, none of which we really give a fuck about. Our strength lies in our ability to make that house suitable for sale and finance, in a short time frame, with minimal expense while meeting code and financial requirements.

no it's confusing you.....what you're describing is a blighted property, not a distressed property

We do this with repurposed material purchasing, very tight project management, and correct property selection, and keeping our sub contracting under control. You can analyze this all you want how ever you want to, but it works for us. Keeping financial institutions out of the picture until we are ready to sell, is what makes this all work.

that's exactly what a group of individuals I'm associated with do, only we don't do it for profit, we do it to provide affordable housing to people in need......we own about 30 properties around this area....

I'm just trying to figure out how you can positively cash flow ($600 a month each) properties you've invested $130,000+- into.....I mean seriously, you'd have to rent it at about $1,450 to $1,550/mo. to obtain that kind of return and that's assuming a 30 year holding period....and unless your managing the properties yourselves, you've got an additional 5-6% in management fees, thus you'd need to collect another $75 a month

but good on you and your son, but I'll tell you the same thing I tell my clients.....single family residential properties are piss poor investments.....go for the small multi-family (4 to 8 unit) dwellings and lessen your risk.....I mean if one of your houses goes vacant for 6 months, could you and your son take that kind of a financial hit? (6 months of lost rent at $1,550 to $1,650 a month)

when the tenants move out, make sure they don't take all of the wiring with them

[Screw_Michigan]

I'm just trying to figure out how you can positively cash flow ($600 a month each) properties you've invested $130,000+- into....

He's lying. Simple as that.

[Bucmonkey]

EVERYTHING is better in the Northwest...

[smackaholic]

Maybe my term of "distressed" is confusing you. We look for properties that are in a less than stellar condition, privately owned with little or no paper against them. Sellers have a number of reasons for why they have not made the property suitable for sale, none of which we really give a fuck about. Our strength lies in our ability to make that house suitable for sale and finance, in a short time frame, with minimal expense while meeting code and financial requirements.

no it's confusing you.....what you're describing is a blighted property, not a distressed property

We do this with repurposed material purchasing, very tight project management, and correct property selection, and keeping our sub contracting under control. You can analyze this all you want how ever you want to, but it works for us. Keeping financial institutions out of the picture until we are ready to sell, is what makes this all work.

that's exactly what a group of individuals I'm associated with do, only we don't do it for profit, we do it to provide affordable housing to people in need......we own about 30 properties around this area....

I'm just trying to figure out how you can positively cash flow ($600 a month each) properties you've invested $130,000+- into.....I mean seriously, you'd have to rent it at about $1,450 to $1,550/mo. to obtain that kind of return and that's assuming a 30 year holding period....and unless your managing the properties yourselves, you've got an additional 5-6% in management fees, thus you'd need to collect another $75 a month

but good on you and your son, but I'll tell you the same thing I tell my clients.....single family residential properties are piss poor investments.....go for the small multi-family (4 to 8 unit) dwellings and lessen your risk.....I mean if one of your houses goes vacant for 6 months, could you and your son take that kind of a financial hit? (6 months of lost rent at $1,550 to $1,650 a month)

when the tenants move out, make sure they don't take all of the wiring with them

I believe most of derron's story, other than the 600 positive cashflow. I guess it might be possible if you really lucked out on all ends of the deal, did all the work yourself and are not valueing the money you have into it at very much, which is reasonable since you can't get jack shit these days safely with your cash. Interest rates are just a sliver above burying it in the yard.