All Forum Posts by: AJ Shepard

The renting of rooms will be after the fact as far as lending goes.  

Second the multi family nw forms.  Not sure if they have a room by room agreeement or not.  You may want to check out the rental housing alliance as well.  

Get to some meet ups in portland!  Westside Investors network or Rare birds investor lab are great places to start.  You’ll find people that are like minded and you can chat with about these and other real estate topics!

Owen,

With that little of people you may consider forming a company with them. You can structure their investment as debt or as equity, ie a loan to the company (debt) or ownership in the company (equity).  It can also be a combination of both.

The challenge will likely be obtaining bank financing without a track record in the LLC name. Probably start with contacting credit unions and find one that will finance as a LLC.

We’ve been in the real estate business for a while.  But recently into syndications with in the last 2 years.  I can say that the syndication has allowed for us to do more deals every year, and larger deals.  We’ve taken all the lessons that you learn from flipping, managing, financing and roll them into one big deal.  Ya, we don’t get 100% of the deal as in the past, but we get the opportunity work on larger deals.  There is definitely an economy of scale that exists as well.  From sfh to small multi family to 20+ units, the larger you go the more stable your costs and returns are.  

It certainly takes some time to get the experience, but once you do, utilizing the leverage from the bank and from other people allows for great returns.  Both for you as the sponsor and for the investors.

Aside from consulting a tax pro expert as others have mentioned, you may check The Book on Tax Strategies for the Savvy Real estate Investor by Amanda Han and Matthew MacFarland. In the book, they shared creative methods to maximize your tax deductions and practices to start saving with a great tax strategy. If you are talking with a syndicator, ask for a sample K-1. You can take that to your Cpa and have a little bit better idea of how it will affect you. Hope this helps!

@Dallin Huso, 

If your goal is to invest but don't want a lot of work, you should partner up with a syndicator as LP. You may check https://verivest.com/ to look for a trusted partner. They have verified sponsor profiles and they monitor deals so you can invest with confidence. Best of luck with your RE journey!

John,

Another way to look at it is to crack out the excel sheet and break down the financing.  If you were to buy a condo in the area that you are looking, would the expenses be higher than the rent that you pay?  Would the difference between the principal pay down be worth buying as opposed to renting.  I think this might give you your answer on whether to buy and live in or to rent.  1800 a month sounds like a pretty sweet deal if you are comfortable there.  

As far as getting exposure to investing in real estate, much of the population considers their personal home as an investment. This is never a good idea. The most hands off real estate investing is going to be a REIT in the stock market. These have many middle men which equate to many fees.

Syndication would be the next option.  This is much like a reit, but you go direct to the sponsor who is managing the asset.  You’ll see higher returns than a reit, but you’ll have to do more due dilligence up front and might be a little riskier.

next would be turnkey rentals.  These returns will vary and you will have to hire a Propwrty manager.  Level of risk increases as well as level of involvement.

Next I would say is buy a turnkey small multi family in your city.  Again returns are higher and risk is higher along with more involvement.

Last would be the value add/ fixer.  This one is where a lot of people are making money quickly in real estate.  You can pick something up that needs work, raise the rents and kick existing tenants out.  This involves a lot of oversight and is even more risky than above.  But if someone is willing to put time and effort and have the resolve to make it work, generally this option is the most profitable.  

There is a ratio of returns vs time spent and that is going to depend on how you want to spend your time.

There is an exemption that is 506(b) which allows foe the investor to be a “sophisticated” investor and not required to be qualified as accredited.  The caveat is that you can’t advertise the specific deal and there are limits on the number of people in the deal (35).  They also need to be known to the sponsor, many syndicators are doing this by video conference to establish a relationship.

Mark,

We're down in portland and I wouldn't say it was quickly, but we did transition from SFR to MFR in the last couple years.

The suggestion that I have is read a lot, and listen to a lot of podcasts.  Also, mock up a deal as though you were going to present it to investors.  When you start talking to people, you’ll want to have something concrete to present and chat about.  Makes the conversation a lot easier when it comes time and you are under contract.  

Welcome to bigger pockets!  Networking is a great way to find out more about real estate investing and hopefully leads to bigger pockets so that you can be more philanthropic.  

There’s a lot of groups meeting online now as well, so check the meetups section in your area and maybe the areas you would want to invest!