All Forum Posts by: David Ackerman

I used @Steven Hamilton II last year for my taxes. He did an excellent job and I highly recommend him. I live in NY and he lives in the Chicago area.

Yes, you can get a Portfolio Line of Credit. Here is how it works at Wells Fargo:

1)It has to be an account that is part of Wells Fargo Advisors. That means you have an investment specialist who manages your account. Me personally, I have 2 accounts under the Wells Fargo Advisors tree. 1 account is for a small amount and my specialist gets 1-1.5% in fees each year for managing that account. The other account, is where 90% of my stock portfolio is. There is no yearly fee because I manage it myself. But, each trade costs $30 (I am very inactive and hold for the very long term so these fees don't cost very much.)

2)Stocks under $10 don't count

3)The interest is Prime (so, right now that money costs me 3.25%)

4)They give you a line of credit for 50% of your eligible portfolio. So, if you have $1 million in an eligible portfolio, then they give a line of credit for $500,000. Now, if u max out the line of credit, and your portfolio drops to $800,000, then u are forced to infuse capital or payday down the line of credit to keep the proper spread between the borrowed money and the value of the portfolio.

So, what I personally do, is I use the line of credit to do short term Hard Money Loans (typically 1 year loans). The HML's pay me around 14-16%. The interest costs me 3.25% on the Portfolio Line of Credit. I keep the spread.

Its a great use of capital if you can keep these things in mind:

1)Always have some extra cash around in case the portfolio drops 30-40%

2)Recognize that they key to this game is low interest rates. If Prime rate goes back to a more normal level of 6-7% then this game is much less practical because the spread is much less.

3)If you are gonna do HML's, make sure you get proper appraisals done and make sure you can really trust the people you lend too.

4)Make sure you have a solid portfolio. If you are only invested in the hottest stocks right now like TSLA, TWTR, and FB then your portfolio will fluctuate wildly. If you have a solidly diversified portfolio with a small amount of high flying stocks, and mostly safe, long-term dividend stocks like a XOM, VZ, KO, BRK-B, SBUX then you are much better off.

Hi all,

Does anyone know a good tax accountant in the NY area who specializes in accounting for people who own many rental properties under different LLC's? It gets very confusing with many different LLC's. My accountant was really good last year....he specialized in dealing with complex real estate taxes. But, I am having trouble getting in touch with him this year. thus, i might need to find a new accountant.

Thnx,

Dave

Thnx for the various responses guys.

I did just do some research on the "Delayed Financing Rule" from Fannie Mae. Thnx for bringing that up David Beard. 2 of my 3 properties for cash were bought in the last 6 months (but it is getting very close to that deadline). I will quickly try to find a lender who knows that rule and can get it done for me.

If NOT, I might try the HML or private financing route.

Thnx All,

Dave

Hi all,

I own 4 mortgaged properties and 3 properties for cash. I am interested in doing a cash-out refinance for 1 or 2 of the properties I own for cash. Unfortunately, I am having a terribly difficult time finding a lender who will do a cash-out refinance. I keep hearing that a cash-out refinance on an investment property is the riskiest type of loan for the bank. So, even lenders that allow 10 mortgaged properties through normal financing (meaning financing at time of purchase) arent allowed to do a cash-out refinance if one already has 4 mortgaged properties.

Does anyone have any suggestions on ways to try to get these properties financed? Someone suggested I get a commercial loan on 2 of the properties and then do a normal refinance after 6 months. Has anyone ever done that?

Thnx,

Dave

That's some great information Jon. I really appreciate you sharing that information. Thnx!!!!

Hi All,

I was doing some reading last night about direct mailing lists. I came across some excellent posts. I was really interested in some of the posts by Jerry Puckett and Jon Klaus. They seem to like the idea of targeting a direct mailing list to out-of-town owners who have a large equity stake in their properties

Here is my question: Why would out-of-town owners be willing to sell for a discount if they already have a large equity stake in the property? Why can't they just call a local realtor and have them put it on the market for fair-value or close to fair value?

I know I am missing something here. But, I am a big believer in asking questions no matter how stupid they are.

Thnx,

Dave

Here is a real important question to ask anybody who is predicting the stock market to crash 90% : Let me see you brokerage account statements.

If the authors of this book, or any book predicting the the collapse of the US economy, then I want to see evidence that you are backing up your predictions with your money. If the authors of this book are SHORT the entire US market because they think it will collapse 90% by 2016 then that says something. So, if anyone knows these authors, just have them email me their brokerage account statements.

Warren Buffet has been bullish on the US economy since 1970. If you look at old press releases you can see these bullish statements for years and years and years. But, Warren Buffet, more importantly, has put his money where his mouth is. He has owned US stocks, bought US companies, invested in America since 1970. You can look at his portfolio anytime you want. You can see that he just made a huge bet on the US economy by buying one of America's largest railroad companies a few years back. He has been buying massive amounts of Wells Fargo bank stock for the past few years. He has owned around 100 million shares in Coca Cola for over 35 years.

What bets have the authors of this book made? Are they just making money by writing books....or are they making real bets on their predictions??

Also, can someone please explain to me how these authors can say they are NOT "Doom and Gloom" people? By predicting the stock market crashing 90% you are predicting the end of worldwide capitalism. All the main companies in the US:

Apple
Walmart
Johnson and Johnson
Google
Proctor and Gamble
Coca Cola

make a huge amount of their profits overseas. If these companies lose 90% of their value the entire world economy is done. How is that NOT "doom and gloom"?

I absolutely hate "doom and gloom" people. And make no mistake about it, anyone who is saying that the stock market will go down 90%, is a "doom and gloom" person.

Here is why "doom and gloom" is so silly. Whenever it happens (meaning whenever capitalism crumbles......or whenever the US dollar becomes worthless) who the hell cares how you have prepared yourself. There will be riots in the street, gangs will takeover, money will be worthless. What are you going to do:build an underground fort and live there with your family?? That would be such a pointless way of living.

So, since nobody knows when/if the "doom and gloom" scenario will ever play out, you might as well just "stay the course". By "staying the course", I mean invest wisely, diversify, look for bargains in both real estates and stocks, and always have some cash reserves.

If I sell all my investments now because some book says the ultimate crash might happen by 2016, then what the hell am I going to do for the next 4 years? Should I Just sit around and wait for it to happen? Then, if it doesn't happen, I will feel like the biggest moron on the planet. If it does happen, then who the hell cares, because I will be rioting in the streets like everybody else. Or I I will be murdered by thugs. Or I will move into a fort underground with the authors of the book (or with my family), and go absolutely insane living in a closet eating Campbell's soup for the rest of my life.

I have regular property insurance on each property. The $2,000,000 umbrella is liability insurance.