All Forum Posts by: Account Closed

So was this lady a corporate lawyer earning 300K per year when she signed the lease? I highly doubt it. You knew she was a single mother working minimum wage jobs when you rented the place to her. Yes these people live on the edge and one thing can push them over. Do you want to be that one thing? As long as she pays rent and repairs I don't see why you need to mess her life up even more.

Syndications can also vary on the risk spectrum. Development projects and some commercial deals look riskier than simple MF apartment projects. There is also specific manager risk because the GP is usually one or two people. Still, there are people with decades of track record with dozens of exits. I see syndications are part of a risk allocated portfolio. I don't buy into stock hedge funds but own index funds and a few selected stocks in a "play" account.

@Tushar P. I dont think comparing with Hedge funds is appropriate. Hedge funds operate at a different point on the risk/reward scale. Just look at the recent collapse of Archegos. Hedge fund managers are incentivized to make huge risky bets. Sure, they dont make money until you do but they dont lose anything when their risky bets crash. And even if they have "skin" in the game it may be a very small portion of their net worth that they can risk. Maybe you cant. Or maybe they just like the adrenaline. Anyway, its a completely different game in my opinion. Decent syndications give you 15-20% with rather low risk profile and some tax benefits. Hedge funds are far more volatile. Im okay with the fee structure of most syndications as long as I get a reasonable return. 

Im not sure why you would think that's a good syndicator to work with. Only someone with no track record having a hard time finding investors would have to do that. I would rather work with experienced syndicators with a long history of exits. Also, the GP has to front all the money for due diligence and screening. They also provide guarantees for the loan. Why do you think that is not worth anything? If a syndicator came to me with the terms you propose, I would be way to skeptical to invest with them. Good syndicators have a list of investors ready to put money into their next deal and rarely even need new investors. The best ones deal directly with Family Offices and dont want your measly 100K.

I look at my overall investments with asset allocation in mind. I have broadly 3 asset classes: Traditional (index funds, stocks), owned rental homes, and passive real estate (lending, private funds, syndications). In my case I have roughly 30% of my money in each asset class and try to not have more than 10% in any single investment. I also have a fairly hefty amount of cash (2 years expenses) You can decide what you are comfortable with and then re allocate from stocks to REI if you want to. I should mention that I am retired and using this portfolio to live off. You may have other considerations depending on stage of life.

But Genghis Khan was in real estate! He spent a lot of time an energy "acquiring" new land! 

My point was that what if for reasons such as say....a pandemic, that you are unable to collect rent for a year. And then you lose your job. If you cant pay back the HELOC, you put your house at risk. I personally would never risk my personal residence for any investment. But then again, I am different from most "refi till you die" high leverage investors on BP. But I also happily retired at age 52 and dont owe any money to anyone and am totally happy with life!

Depends. How stable is your job? If the rental income is zero for a year can you afford to pay the mortgage and not lose your house? Do you want to put the roof over your head at risk for a few hundred bucks a month in cash flow?

I dont know how old you are but if you have been a landlord for 25 years you cant be young anymore. Why did you start investing in real estate? Wasn't it for "passive income"? If at 20 units the income is not passive and not adding to your life you need to ask some hard questions. If you are not willing to pay for other people to do the work you will always feel stretched. What is your time worth? According to you less than $20/hour. Thats not how successful people think. If you have owned 20 units for a long time you probably have a very large net worth in those properties. If you dont want to outsource to a PM and just collect checks,  think about selling and investing the proceeds in something truly passive.

Do you live to be an investor or do you invest to live? Dont listen to hucksters with podcasts and you tube channels to tell you what you should or shouldn't want or should or shouldn't do. Buy a house if you want for stability, lifestyle, schools, family etc etc. Dont if you want to relocate every 2 years or just dont want the hassle of home ownership. I can tell you this, most well off people own homes. I dont know any millionaires who are renting. I do know a lot of poor people who do. You decide.