All Forum Posts by: Calvin Thomas

5% - 10% seems very vague. The offering documents are pretty straight forward and are regulated by the SEC. That 5% -10% that is suggested should be in the offering materials are they are not fact. Remember, there's an old saying.  Sound bites and verbal agreements are not sworn testimony; only in writing is. Just remember, buyer be ware. A few questions you should ask your GC contact (or better yet, have him comment on this thread).

1) What are the ongoing management charges that will be incurred?

2) Do those charges effect my 6% min distribution?

3) Is GC's piece an equity position or services position (I.E. management)?

4) What happens if the fund collapses or the rents are not paid on time?

Personally, of you are just interested in 6%, I'd look at some solid closed end funds.  Seems too much risk for my appetite and way too many unknowns. 

Yep, I'm a newbie in the real estate game (40+ years). Only have around 644 units, but I'm growing. So much for me to learn..

You need to use a service like Smart Move to check their credit, employment and eviction history. We only do commercial in NYC due to the horrid eviction laws in NYC. You may also want to pay for eviction insurance by Lloyds of London. I know that area, and yea, it's getting better, but you are still going to be going through an eviction every once and a while. Average eviction is 6 - 8 months and around 2k-4k in legal fees. Rest assured the tenant in the BK know all the ins and outs on how to play the eviction game. I'd also require a 2 month security deposit, but that's just me.

I'd be more concerned about the liability aspect than the funding. Don't forget, you may have to pay transfer taxes in order to get the building back in to your name. If you do go that route, make sure you have great insurance AND an multi-million dollar umbrella on the building and yourself.

Lowes has pre-fab cabinets we use in all of our rentals and they are affordably priced. The only difference we do is the countertop. In the nicer places, we use Corian or solid surface, whereas the mid-level places a cheaper solid service pre-fab such as laminate.

Penfed and Morgan Stanley will provide this to you.  If it is an investment property, you do not want to put it in your name.

Investing 101. Do not go into a rehab property without knowing what needs to be done as well as excess capital for the unknown. We recently did something similar. Took over a building for basically taxes owed. We had to replace basically everything but the shell. It also had mold and asbestos which we need to remediate.  You need to have an inspection done on everything needing to be done to the building as well as estimates for the costs on these items. Then, you need to also expect to have a 20% cushion on all these repairs and renovations. You also need to have a lawyer put into contract with the city that you'd have first right to make good and repair the issues needing to be addressed.  In addition, did you negotiate with the State or city in terms of tax abatements? Rest assured, once you do rehab your property, they will re-rate the tax basis for said property.  Are there any grants in the State of Texas, County or city where the property is located? Are there any federal programs you can tap in to?  These are all important questions to ask and find answers to prior to going into contract. 

Yes, but people are lazy. They see a get rich quick scam take take the plunge. It was much worse in the 90's with Don Lapre, Carlton Sheets and a host of other people who rented Lambos and mansions to tell the public you can have this too with real estate and OPM. Yes, it can be done, but you cannot last long when you build a house of cards. Eventually, something will happen. It's Murphy's Law.

Wrong forum. I'd say no, but head over to Bogleheads.org and they'll help you out. Whether you take their advice, well, that's your call.