All Forum Posts by: Account Closed

I have not bought from abroad but have sold both with POA and embassy signatures. I also believe online notary works while selling. Banks are another beast though so buying with a loan is going to be trouble. I know some people here who did it here in Singapore and paid almost 1K to the embassy for the 20 signatures needed. And now getting embassy appointments is also very hard.

Really? Bunch of young single guys move into a new town and the first thing they look for is GUNS?! What has happened to the world? :-)

A good PM has invested in processes and systems that scale over thousands of units. This is rarely cost effective for small landlords with a handful of units. These are systems for listing, showing, screening, maintenance, bookkeeping, taxes etc etc. So to some extent you are paying for that also. But as you correctly inferred from your albeit erroneous calculations, is that vacancy kills. You should not incur vacancy costs every year. On average though you will every 18-24 months.

In order for a rental to be profitable with PM you really need better than 1% rent ratios, closer to 1.5% or so. You can still make money on mortgage pay down and appreciation but not on cash flow.

This whole deal doesn't smell good. Even if the seller couldn't pay on the $250K mortgage she had huge equity in the house and could easily have listed and sold it. The fact that she didn't indicates she was unsound of mind or at least very very naive. Nobody walks away from 350K equity so easily. My guess is that she realize it a bit too late and now wants fair compensation for her equity. Legally I dont know what that means but the OP shouldn't have taken advantage like that in the first place so hard to find too much sympathy for him here.

Turnkey made sense post 2008 when even factoring in profit for the turnkey company there was enough meat on the bone left for an investor. You could get 1.5 to 2% rent ratios in midwest market all day long. Now, in the current market, it is not possible for turnkey suppliers to get enough deals to have it make sense for themselves and investors. This notion of buying above appraised cost is just silliness. If they bank doesn't think its worth more than 108K (which also seems bloated given the other appraisal) why would you pay that much more? Why not just buy off the MLS and find a good PM?

The one and only time I allowed this in my A class ($3700/mo) rental the tenants were always behind on rent and eventually left 6 months into the lease. They were also a nuisance to my neighbors. I took them in as it was Nov and tenant pool was slim. That was pre Covid. Now, with evictions being almost impossible in CA, I would never take that chance again. I only rent to people making over $200K per year  and have plenty of cash and stellar credit. 

But again, in a syndication the LP only puts in the down payment also. The leverage is taken in the name of the LLC by the GP. Yes the numbers are bigger but concept remains. Only extra thing is the acquisition charge the GP takes but that is because the GP fronts all the costs for due diligence, which is substantial. But in the OP case straight loan seems like the better option. But the investor will not be able to get first position because the bank will demand that.

Every syndication gives a preferred return plus 60/40 or 70/30 in favor of the investors. And LPs do no work at all. Why is this any different? If anything the risk is greater and returns for the money should be higher.

The money partner is either a lender or a limited partners. Industry standards pay out debt at hard money rates (10-12% these days with or without points) and first position lien. The norms for LP/GP split are typically preferred returns of 8-10% and 70/30 or 60/40 on profit. In this case the loan is carried by the GP and LP puts up the down payment. Depends if the money partner wants fixed return or potential upside. Paperwork wise the loan is the easiest to set up.

So you kept a deposit of $1200 for a year with no accounting or receipt and no real legit damages? What stopped you from returning the money earlier?  Did you just think they were unaware kids and would never follow through? What happened to the other $800? Are you going to return that to the other tenants? Maybe Im misreading things but if what I think is true happened, you are the reason people hate landlords so much.

Legally (and ethically) you have to return the money. Not just for fear of being sued but because its the right thing to do. All $1200 of it, not just the $400. If it was lease breakage fee, it should have been agreed to in writing. Which it obviously was not.