All Forum Posts by: David Clinton III

I have found that using capital to be a hard money lender is the next step of passivity. It carries less risk than owning rentals, and has less stress. There are not the tax benefits associated with rental income, but this may be worth it.

Always depends on your goals. One investor may be happy with a specific cash on cash return. Another might want a minimum “dollars per door per month”. None of these are wrong. But you first have to define why you’re in real estate. What do you want real estate to accomplish for you?

It is very subjective! All are very important pieces to the puzzle, so nobody should discount another's strengths or efforts.

I see Nathan's point, but "skin in the game" is more than mere capital. I have had many partnerships where I am putting in all the sweat equity as "operator", and the capital partner is only bringing capital with no expertise, experience, etc. Of course, that experience flavors my response.

As a capital partner now (8 years in to my REI career), I don't intend to put in the sweat equity, and I expect the operating partner will make the lion's share of the return.

It all depends on both of your goals. Whenever I partner, I try to push cash flows toward the heavier capital partner. So I would consider doing 75/25 on cash flows until both partners get their money back, and 50/50 on equity.

Putting in 75% (or even 100%) of the capital does not entitle one to the vast majority of equity.

I would hire an attorney and learn every step of the process... This will gain you some experience you can use to deal with liens in the future.

@Markus Stringer, some will... keep trying. Also check all local credit unions. In general, local ones are more likely to do them.

If you can cash in and rent, and the numbers make sense, you can rent through the next down cycle, and buy a primary for a lower price at that time. Of course, nobody knows when it’s coming. But a great strategy. 

Heloc for sure.

As one mentor of mine is fond of saying "your price may not be the problem, but it certainly is the solution".