All Forum Posts by: Aaron Taylor

@John Allen if I were you, and had the available funds, I would invest in both a syndication and your own smaller investment (like duplex/4 plex) to start.  Then basically see how you like both, there are good aspects to either.  Control and time commitment are probably the biggest things.  You're probably going to get better returns as an active investor as long as you choose good investments.  It would be really hard to replace your income from just passive investments to start unless you have a large pile of cash or have a long time horizon.

To put it this way, with active investing you can find a deal and a huge return on it to start.  That's pretty hard to do in passive.

@Matt Hudson if you have $250k in the bank already, then I don't think I'd start with BRRRR, it'd be a waste of your time. You BRRRR when you have more time than money, and it appears like you have the opposite issue. It seems like you could just buy a single family home or duplex to get your feet wet, then look for a small multi to scale up some. With 250k, I'd concentrate on getting deals (deal flow) as finding just one good deal will probably make you as much equity as you'd gain working on this BRRRR in a fraction of the time.

BRRRR works really well when there's a decent level of appreciation going on, because even though your cash flow may be small, the appreciation makes up for it. When the market is slowing down like it is now, then repairs may eat your cashflow and appreciation may be zero making it effectively 'dead equity' in your property. Everyone has a different situation due to their tax bracket and market. Like if you have 25% equity in a 100k house that's bringing in net of $100 per month with little appreciation currently, then it's possible that just selling the house and putting that money towards something else might be a better idea.

Now if you're getting 4% to 5% appreciation with rents climbing quickly then BRRRR is going to work really well. All depends on the market and your personal tax situation.

In my corporate career I haven't seen very much correlation between getting to work early or later EXCEPT for those who arrive at work significantly later than others...their production is definitely lower than others typically.  The irony is that on occasion some upper level bosses have thought that employee was 'going the extra mile' when really they were there by themselves because they got to work 90 minutes after everyone else, lol.

@George Gammon Do you have that 2012 chart in 2019 form?  I was wondering where it looked today.  I've been looking at a lot of the same information you and Mike have, but finding more up to date charts has been challenging.  Basically, I'm trying to determine what real estate asset classes are overvalued compared to their historic norm and by how much.  My general 'gut' feeling from tons of reading and podcasts is that:

multifamily is overvalued compared to historic norm

entry level housing is red hot but upper level housing is turning very cold

retail doesn't seem as hot as the other sectors, or at least it's not being talked about nearly as much

But I haven't seen many charts that would articulate this data.

You asked about what I said, and I explained it, but then you kind of went off into larger territory. My point was, for people not interested in doing syndications right now and want to buy smaller multi's, that SFR's are a better value in a lot of markets currently. Maybe not in your market, but I see a lot of that around mine. Bigger multi's are a totally different animal and definitely not what I was talking about. Michael Zuber has been talking about this exact phenomenon going on in his Fresno market on his podcast, so I know it's not just my area.

What would be the advantage of SFH over like a small 8 plex MF when MF is overheated like my example? I guess:

better financing terms

more available options to purchase

don't have to pay any utilities

more flexibility

longer term renters

less tenants to manage

What it wouldn't have is:

ability to scale

can't force appreciation

less renters so even though vacancies are less, the cost is higher

But my primary thing is, if I can buy 5 houses for $500k with 100k down making 8k a year combined, why would I buy an 8 plex 5 or 6 cap where I just break even? With the financing added in, you can't even make money on a lot of MF things that people are buying. I'm sure there are people getting MF off-market deals for cheaper, but that goes for the SFR too.

My concern with multifamily syndications right now revolves around interest rates and optimistic underwriting.  If rates were to rise even 2% to 3% I'm not sure if any of their refi or exit plans would work due to the next buyer being unable to afford it.  It kind of feels like multifamily syndication is the new house flipping, lol, so many books and podcasts on it.  If I were going to put money into one right now, I'd choose my sponsor very carefully.

Frankly, single family housing seems priced better than multifamily right now.  It doesn't scale, but someone will have to explain to me why an 8 plex 5 cap is a better investment than your usual 1% rule single family house (probably an 8 cap) in the same area.  I see people paying dumb money for returns that don't seem to make any sense.

 Have you tried using the form directly on Facebook?  Results for me showed that it worked slightly better than a straight website link.

 If you got 307 links clicks without one response, I think there has to be an issue on your website.  There are a bunch of landing page tools that people use for things like that, maybe one of those would be worth trying?  Or try and emulate websites that you know convert, there have been a lot of podcast guests that have websites they use to get leads.

Sometimes if your website is too slow it will cause people to bounce as well, that's another thing to check.  A lot of people put way too many plugins combined with a slow theme and slow hosting to get a high bounce rate.