All Forum Posts by: Account Closed

@Antowayne Watson agree with sentiment on lower risk in multi-family. Even a half-occupied duplex is better than a vacant SFH. At 5 units or more, some lenders may start to look at it as commercial, so they may care more about the property's income than your own personal financial situation. And then your ability to force appreciation is more about boosting property income than about what other SFH comps are in the area.

We’re all trying to understand what’s going on with the market and where we should invest.

What are your favorite sites/resources for researching list prices, sale prices, cap rates, rents, employment and demographic trends, etc?

@Adam Philpot my favorite aspect of Commercial is that the building's value is a function of the Net Operating Income and cap rate. So if you can boost the NOI then you know how much value you've added to your property. If it's significant, take an appraisal back to the bank for a Refi and pull your money out... have fun!

@Toben B. Check with your broker.

@Taylor Smith consult with both a real estate tax advisor AND an attorney. Read Tax Free Wealth by Tom Wheelright for a great explanation of why you should meet with your tax advisor first to determine the best structure for tax strategy and then have that person work with your attorney to ensure the structure is set up correctly. There are tips there that I didn't know... like being able to structure with an LLC but elect to have the LLC taxed as a Corporation. Interesting stuff.

Agree with @Ellie Perlman on trusting your sponsor.  Obviously important to talk to them and their references, but also check around on this site to see what others' experiences have been.  If they're good, they should have no problem with you doing your research.  

@Ian Walsh agree with you that age doesn't matter... except to the extent that younger folks typically have fewer resources and less experience.  They have to be a bit more careful to avoid costly setbacks.  I think that's where Iani is coming from. 

@Iani Piha Remember, "you make your money when you buy."  Do your diligence and make sure you buy your first deal for a good price.  If you overpay, you'll have a hard time making enough money on the back end to keep going.  2 books I'd recommend you read... Rich Dad Poor Dad by Robert Kiyosaki and Tax Free Wealth by Tom Wheelright (Kiyosaki's tax advisor).  There are great tax breaks for real estate investors that can dramatically increase your returns over the long run, especially the 1031 Exchange.  Just be sure to consult with a tax advisor who understands real estate.  

Would the seller be willing to extend if you offered a financial incentive?  Would you defer enough taxes to consider doing that?  

Hey Iani, great to see your motivation to get started in real estate.  I think you're correct to focus on rentals long-term, rather than flipping.  There are plenty of people who do well in flipping, but there are a few reasons why this might not be the best option for you at the moment:

- You can lose your shirt if you don't know what you're doing

- You'll need enough capital to both buy the house and also fix it up

- The market is starting to soften, so flips may not be as easy to sell as they would be in a very strong market

If your goal is to start off with one property in 2019, one great option for you might be to combine the concepts of flipping and house-hacking.  If you can save up (and possibly borrow from/partner with friends or family) to buy a 2-4 unit property that's rentable in its existing condition, you can live in and fix up one unit while the others are rented out.  Every 6 months or so, move into another unit, fix it up, and raise the rents in the unit(s) you've already improved.  When you're done, you'll have a much more valuable asset, and you'll have been living "rent free" the whole time.  Good luck!

I'd lean toward investing in a syndicated deal to gain some experience.  There are lots of moving parts, and investing in one deal will show you a lot about how the syndicator evaluates deals, due diligence, offering memorandums, legal documentation, deal structure, etc.  You're a busy guy, so unless you have an experienced partner who can walk you through those things, I'd pass.  If you decide to invest in a syndication as an LP, my recommendation would be to reach out to  @Joe Fairless at Ashcroft Capital.