All Forum Posts by: Tom Hamilton

OK, thanks again. I guuess I need to look into the SOLO 401k some more. I have employees, but not full time so I THINK I'm OK to set one up.

oh...just thought of a question I forgot to add... I CAN set up a solo 401K thru my business. Are there substancially different rules on these with regard to the type of RE investing I am looking to do vs. an IRA. I know gettting control is a bit easier, but I don't know about the rest of the rules.

Thx.

Thanks Will, some good info there. I don't think I'm going to venture into note investing or loans as they are far outside my knowledge and experience area. I do this very part-time and have a very good paying job (business) I am not looking to sacrifice time from. They MAY be great areas to invest IRA money, I assume you know your stuff, just not for me right now.

I do agree with you the tax advantages of RE ownership may make the IRA a non-ideal vehicle to purchase them. I'm pretty much maxed out with non-ira owned properties already though as I still need to keep lots of non-ira money liquid for other uses, so it may be IRA or nothing. If it winds up "nothing" due to the cons of IRA ownership of a few condos I'm OK with that also.

With the issues you brought up,UBIT specifically, I may decide financing is not a good route to go so I can get just two more units with IRA money as cash buys to keep it to under the 20% of my IRA I want to allocate here. That's fine - maybe I pick up one or two more in a few years if I still see the right "buys" then.

Thanks again.

Hi. Haven't been here in a while, love the site. I've been buying a few properties since the 2008 crash and am very happy with what I own. Mostly smallish condo's on the Gulf that can be rented either weekly, monthly, yearly or daily. I'm doing yearly leases right now until the short-term (vacation) rental market recovers a bit more. They are quite profitable as is and the market is picking up ever so slightly in the buildings I own in.

Anyhow, I want a few more but now I want to purchase in my IRA account. I read a lot here and elsewhere about this but have not done it yet. I'd rather use leverage but I don't know the rules on this (mortgare with IRA ???). I have a few questions maybe some of the experienced SD IRA folks could answer?

1. I'm looking to buy maybe 1-3 more units, $75-$100k range each - so not alot of buys/sells. Is there a SD IRA provider that might be good for this lower level of transactions? I'd be depositing the rental checks back into the IRA, of course.

2. What methods are available to leverage the IRA money - not pay full cash? Can I get a mortgae somehow? Secured by other IRA investments maybe (non-RE)? This would be long-term financing, I'm renting the units and have no plans for a fast flip. I could just use IRA cash I guess - rather that than very high rate financing, but just wondering what others have found.

Thanks for any help on this.

Because I am in the business of investing large sums of money for clients, I tend to think much more info is needed to make any real recommendations for someone... but maybe many of you know Rich pretty well so you have a better idea what he's looking for than I would.

That said, it's both the scariest AND most exciting time to be investing in the many years I've been doing this. Making a correct read on macroeconomics can make you rich! being wrong might kill you. Over-diversification is just a bunch of crap, IMO.

$200k might limit you on some of the best alternative investment managers with higher minimums, but there are some good ones out there! All sorts and flavors, risk levels and potential returns. It just depends what you believe in and can trust.

I have particular favorite investments in this climate, but I can't just go posting them in a forum, or even by email to folks I don't know. These fit MY macro thoughts on how interest rates, debt (public and private), domestic and foreign companies performance, etc.

As I said, it's seems like a make or break type investment world right now, be it RE as discussed here, stocks, bons, whatever. Lots of fun!

One last thing on the boat slip investment concept... I the original thread we had a debate on cash fllow (current ROI) vs. future price apprecitiation potential. One of the posters was adament that anything that does not produce a very high current cash flow was not an investment, but just gambling. I disagreed with that concept completely.

So, just to point out, that purchasing boat slips in this down economy and market IS a play on the future appreciation of this asset, as well as some current cash flow while you wait. This is a totally different investment than a midwest duplex where it will likely depreciate in value while you own it, but you pull off nice rent (hopefully) for years - or sell it to someone who wants to.

I certainly have no problem with straight cash flow buyers. That is a way to invest in real estate. With all my investments, however, I am willing to sacrifice some current income for the potential of the asset itself increasing in value. THAT is also a very valid real estate investment plan.

Such investing is only "gambling" if you do not believe your insight, based on research and thought, is accurate. I have no problem saying I believe I have a good idea what the future holds for ALL my investments, or I wouldn't own them. Will I be wrong once in a while? Maybe, but that's part of investing for me.

So, I just wanted to get the philosophical part of this investment idea on the table so folks understood it a bit better. Some current income, but expectations of higher asset value as well, or it is not a good investment. I certainly HOPE many disagree with me on future value of boat slips... the more pessamistic most folks are, the closer to the bottom we likely are!

Josh, I wondered whatr happened to that other thread... it was a bit contensious so just as well to end it. It's an area of real estate that few even know of so not many facts, etc. Fun to talk about though for us boat owners.

Originally posted by Vikram C.:

5. It was mentioned in that thread that banks are only lending for one boat slip per person. I was surprised to hear this because, if the opportunity is so good and cash flows justify it, why would you not be able to get a loan for a portfolio of slips?

The banks don't have such a great track record of lending on opportunity vs. hype and excess. The big ones basically put themselves out of business with their "insight". You can certainly get a loan for a group of slips, but not as a standard mortgage like before - so higher rates. I am sure they wish they had done this with other real estate a few years back...

If it looks like a great deal to everyone, including the banks, it's probably too late. There's really no way to tell when boat slips or other real estate will bottom out - not sure where the 2 years comes from - but having different opinions on investments is what makes a "market" and opportunity to know more, think more, work harder and get an edge.

As the OP in the closed thread, I am interested to hear from others with experience in this area. I doubt I'll add any details here, just interested to hear what others have to say.

The truth is, there aren't many true deals on slips even now, so I'm glad to see that at least in this forum, not much competition for buyers. I always love to buy against the grain with any investment - it's always proved profitable for me so the fewer that are "in" the better. Like other real estate, the fast flip folks are now either rich and out, or belly up and out, depending on when they bought and sold.

I look to be adding to my slip buys within a month or so, but no hurry. Maybe I'll get some info here to make me a better buyer. I do have a local partner to buy with now, so we're planning to own 6-8 slips of various sizes and costs over the next 6 months or so. We may go as high as 10 depending on how much we each fund our SEP IRA's with at tax time.

Vikram, having hired folks in my business that need to have th etype of desire and attitude you describe I can tell you it can be a tough person to find - but they are out there for sure. My business is different (financial advisor branch) but the qualities needed to succeed are the same, with the exception of any construction knowledge... and maybe age as mine is a tougher business for someone in their early 20's.

The reason it's tough to find the person is there is almost nothing on a resume that speaks to what you know is needed for success in this. It's 80% attitude and willingness to but your hump AND enkoy doing so and 20% aptitude. So where to find them and how to pay them?

First, for pay you may want to consider a real profit sharing proposal, bonuses for projects run well, base salary that they can just get by one and maybe after a year let him "own" a small project or two where he can make a big % of the profits (or not if it doesn't make money). Just thinking out loud of options. If you really want him long-term you'd need to pay very well after maybe a 1 yr. period of "traineee" status. Why? Because the type of person you want should have the ambission to go do it for himself once he learns how! That's a GOOD quality to have in an employee, but the trick is to allow him to do it, make good $$$ doing it, but stay in your firm.

Good luck. I have had hits and misses hiring "go-getters". Pay has rarely been the issue in my business because a successful person is making quite a bit of $$$ in their second year. If they aren't they need to go. I've found that anyone who is caught up with punching a clock will fail. IF they want a "regular" job then my job and yours are the last thing they'll be good at. If work hours are critical then pass. However, a person who wants to be at his kids school/sports events, etc. but fits that into an irregular schedule can be perfect. You want honesty and intergity first, so if a person has a family but is willing to basically ignore them to get ahead you will likely find out they aren't such good people after all.

Good luck.

Yeah, they are from 500 sq. ft. to just over 1,000 sq. ft. Like hotel rooms or hotel suites.

Some great ideas - but i'd have to pay some kid to distribute flyers in marinas because I can't run fast enough when the marina owner finds out!

Certainly offering the cond/slip to a transient boater for a few days in town a hot shower and a break from the boat would be a nice offering, but I'd also have to rent to others as just the condo as a hotel type room to fill more dates. I'll think that thru a bit.

Also, while some 30-50 mi. away do travel back and forth each use, many boaters do not have boats set up for staying on for several nights - espeially fishing boats and the like. I know I'd keep my boat at a hotel/slip set up where I boat if it was available. In most cases I can rent out the dock seperately so that may work some.

I'd love to own the boat, keep it in the condo sliap and rent it out as to non-boat owners as a package. However I am almost certain the liability factor would preclude the condo unit from allowing this. Doesn't hurt to ask several. Again, I'd be marketing the unit to a niche then, likely as a 1-2 week vacation at a time with the boat. I think the 1000+ sq. ft. would be best for this as a hotel room size gets small in a week.

Hi. I'm fairly new on DP - second thread quesion. I am lookning for ideas on how to market properties to a pretty specific group of people. These are properties I am aquiring now and over the next few years at recession prices, REO and short sales mainly. I own one now and plan to own 4-6 by end of 2012 (or sooner if any sign the market will pick up faster - no sign of that now).

What I am buying is smallish condos (500-100 sq, ft.) on the intercoastal areas of Flodida Gulf coast in or near cities or larger towns (not in remote areas). Like other real estate on the water in FL, as you know huge up swing then a collapse. What's unique in what I'm looking for is I only want condo that also come with a deeded boat slip. I don't really want to discuss the merits of this here as I am very comfortable in what and why and how much $$$ I'll pay. The area I have questions and welcome ideas in how to sell the property 3-7 years down the line (or sooner if a rebound and a good marketing plan) to the RIGHT buyers.

Most who bought during the upswing bought because it was waterfront property... the boat slip was a minor plau for them as they weren't living there, didn't own a boat and wanted to rent to anyone who would pay. Fine... for them. The reality is that boat slips are a limited and valuable commodity themselves IF owned or rented by boat owners. Of NO value to a non-boat owner.

So, I have no doubt than in the next market recovery, these properties are best returned to rightful owners - boat owners who want a small condo where there boat is docked so they can easily live there on weekends and vacations. They can rent it out (the condo, not boat) when not using if they need the income, but many may not. These folks may not really even know they want such a place because they haven't been approached with the idea.

So... how do I market to a boat owner who already pays for a slip somewhere and may live within 70 miles of where their bopat is? Yeah, pretty specific, I know. But for top dollar that's what I want in abuyer. Brokers/MLS mentions the slips, but it certainly is not proactively marketing the concept of owning a slip with the wonderful convenience of a maintanence free small furnished and stocked condo.

I look forward to whatever ideas folks here have. It's a long-term investment for me so the right idea(s) have lots of time to filter thru my brain, but I want to work on the ideas now. IF nothing else comes up, I am relying on current rental income and an eventual general recovery in waterfront condos, but I much prefer niche marketing ideas.

P.S. I started a thread in a different section on boat slip investing and it turmned into arguements whether it makes sense or not. I did not post in the forums where others are asked to evaluate a "deal" specifically because I really want to discuss a particular aspect of the deal - in this case marketing to potential ideal buyers. This person saying it will never work or another person saying the returns aren't attractive enough just detracts from the discussion. If someone has an interest in more about the concept as a partner or investor that's great - please keep it as a private message to me and I'll reply outside of this thread. Thx.