Investment Ideas, deed Investing, HML, MFR

[Ozzy B.]

Hello Everyone at BP.

I have been reading, researching real estate investments and strategies for many years. For the past few months, I've been hooked on BP. The thing I like the most on this forum is people helping people to succeed. This is Unprecedented. Especially from people who are already successfull but still helping others.

I am a business owner. Over the years I've made some bad decisions and guess still making em, I.e. investing in stocks, over the board lifestyle, kids going to private schools, big house, expensive cars etc.

I just turned 40 and all of sudden I realized that I don't have significant savings, what if something goes wrong and I cannot continue working or suffer a huge loss.

I had to set a goal for myself and my goal is to earn atleast $25K/month passive Income in next 4-5 years. I just need a comprehensive plan.

1)Traditional savings methods such as Treasuries, saving accounts, term deposits don't offer good returns.

2) Fix/Flip don't have enough potential to reach my goals and its not passive.

3) I've researched companies like Prosper and Lending Club but their stats and no-collateral is discouraging.

4) I like the idea of owning a large multi-family complex debt free. NOI without the debt services will give me enough to reach/exceed my goals. With a Professional Managment Company, I won't have to manage day to day operations.

I have 1M tied up in various things which I cannot tap for next couple of years.

I have $300K in saving account earning 0.85% and can save additional 15k/month. In 4 years that would be over 1M. If this money is invested elsewhere it can grow much faster than 0.85%. The problem is that I don't have much time to spare so no rehab/flip.

I've also been researching transactional funding, Hard Money lending but am worried about usury laws, compliance with state/federal regulations, dealing with brokers, title companies, attorneys, CPA's and the due diligence on the property to fund. Maybe I am over cautious. Again sparing time is another issue.

What do you guys think of companies like Norris Group. Norris offers deed investing and rated A+ with BBB. Has anyone worked with them?

Any other ideas?

Sorry for a very long post.

[Eric M.]

A couple thoughts.

Trans funding is pretty dead. Unless you consider 30 day hard money to be Transactional Funding. I don't.

BBB ratings are next to useless. It is well known you can pay for an A rating.

There are several ways to achieve your goal and some of your ideas will work. Hard Money Lending and Apartment Ownership can both certainly do it.

My concern is the combination that you are relatively new in REI, you are seeking high (and thus higher than average risk) returns and most dangerously, you seem to want it to be "automatic". You want to have little work involved.

To me that is a recipe for disaster. Unless you have a very trusted money manager or business manager (doubt you do or you wouldn't be asking us) who can keep an eye on this stuff, you are likely to get fleeced at some point. IMO, none of these investment activities are good as totally hands off operations.
If you don't vet every loan, you will end up with some very bad ones. If you don't keep an eye on your property managers, they will do things like cut corners on upkeep to make profits look higher and then you will get stuck with a big money repair down the road.

Maybe your better bet is commercial property with long term NNN leases. Maybe that qualifies as very hands off. Not sure.