All Forum Posts by: Chris Levarek

@Daniel Sanchez Which one will allow you to take action today with your current resources and skills? This is a question worth asking. Many people on this forum will spend years, never investing in anything because they can't afford it(fallacy) or fear to take action.

So despite the logical appreciation or cashflow discussion, what's more important is what can you do now with what you got? I live in Phoenix, AZ and did my first BRRRR in Durham, NC out of state. Why? Because at the time, $209k bought me two duplexes in a decent area where as that might have gotten me a very rough property in a rough area in Phoenix, maybe.

This launched my real estate career and portfolio which then let me evaluate this cashflow and appreciation decision with real property in real time instead of theorizing. 

So, my question to all the BP readers is what will enable you to take action and be successful with what you know and have? Now go do that.

@Juan Campos Sounds like liquidity and short term are important. So options that offer such, are your choices. I like lending my money when i'm not using it, especially for 8-10% promissory notes. Many flipping or short term partners who can easily turn or flip a property in 10 months. Plus you will probably learn a few things in the 10 months. We also do this with our short term rental projects and there is always interest.

If that's too much risk it for the bisquit, savings account, whole life insurance, index fund, high yield savings, short term bonds, etc.

If you can invest in any cycle, you become the 1%. An investor with many tools in the toolbelt, unaffected by the fear that grips the common person.

“Hard times create strong men, strong men create good times, good times create weak men, and weak men create hard times.” - G. Michael Hopf

@Samuel Brant Promissory note for a simple interest loan. You can use online sources to draft it up for cheap (rocketlawyer, legalzoom, etc). Or to truly get some expertise behind you for credibility and build a brand, work with an attorney and draft up both the promissory note and a joint venture for good measure.

Partner up! Time, Capital, Experience. You don't have Capital or Experience. Bring the Time to a partnership. Be a local boots on the ground for outside investors, learn your market, make contacts and get your hands in the clay with cold calling, renovations, driving for dollars, etc. Then talk about it everywhere, locally, BP, social media, etc. Someone will want to partner...

@Martin Nowak If you sell their will be trouble, if you go their will be double. :) 

Market isn't going anywhere for 2-3 years in my opinion, local market dependent of course. Fact home ownership is on the decline while rental growth is on the incline in general. Rental growth means good for rental properties. 

This being said, do the numbers! Return on Equity. If your equity could make more elsewhere, move it. If you are satisfied with your return, don't move it. Take the emotion out of the equation. ROE = cashflow / Equity in the property.

And sometimes, it's about quality of life, so returns aren't everything if you enjoy the time or role you are currently playing with said properties...

@Jacob James Use VA lending when possible. I'd say Texas is your friend considering it's the number one state on a number of real estate indicators, ok Florida, maybe you contest as well.

If I was you, I would invest in Texas. Remember you don't have to invest in San Antonio, Texas is big, it's just as out of state as Michigan as far as drive time...

That being said, an LLC isn't needed. Just have an umbrella policy for liability. Use your va lending when possible, house hack, and use your va lending when possible. Notice I keep saying that phrase!

If you do decide to invest in Michigan, build a team. Attorney, Property manager, Lender, Agent, Contractor, Handyman. 

@Jai Rijh LLC is a liability vehicle first and foremost. So protecting liability from some perceived risk according to your lifestyle or career. However, I see people invest with LLC's in syndications to :

• Invest with someone else
• Organize their investments separately
• Build a business behind the LLC at some point
• Conceal their identity
• It looks cool

Yes that last one is a reason for some. Up to you!

@Christian Albright We've been doing this for years. In fact most businesses do, especially when getting started. Nike was constantly in debt to grow their business(read Shoe Dog). Leveraging your equity is why real estate is possible. If you choose to do it all in cash, you rarely scale very fast at all. I prefer Home Equity Line Of Credit. Now that we have a business, of course Business Lines of Credit help, but getting started, Home Equity is great.

@David Lao Understand for sure. 1031 is just one way to skin the recapture cat so to speak. Probably one of the more stressful and difficult as well, not to mention in the politicians spotlight at the moment. Many investors, on the year of recapture, will simply reinvest a portion into a new investment in same year as sale or exit of 1st investment, thus garnering depreciation again to offset gains and recapture. These are now long term gains, taxed differently, which also is beneficial. Everything of course always depends on your lifestyle and what matches your investment strategy.

I am by no means saying syndication is the only route for sure, just saying larger deals and being part of them typically yield good benefits in a variety of categories, depreciation being one of them. Smaller deals might have better returns if fully owner managed, but typically require more risk and more time. 

However, I fully recommend having a call with tax strategist who can showcase the best option for your scenario(ensure they invest in real estate for best outcome).