All Forum Posts by: Dallon Schultz

@Jacob Lapp first of all I want to commend you for wanting to give back so freely. Not everyone wants to mentor but I noticed those that do get much more in return such as deeper knowledge and understanding, increased experience and connections. The question you need to ask yourself is how much do you value your time? If you're spending YOUR time to help friends increase their income and financial status then it's only fair to be compensated. If presented properly they will understand and accept your new terms because they'll value you friendship and the assistance you provided. Don't get me wrong, I've shared some insight with some close friends and "looked" at a deal here and there but it wasn't enough to distract me from obtaining my goals. There have been some times where I simply explained that I'd love to help them further but due to all the time I've committed thus far, it's preventing me from using my time to advance my career and goals and then shared that if they would like continual mentorship then maybe we should discuss a form of payment. You need to worry about you first otherwise you'll start feeling like you're being taken advantage of which from your post sounds like it may be a little bit of the case.

@Bob Ross first step would be to talk to a lender. I am not one but have purchased a few investment properties. If the current rents on your triplex are covering your mortgage that could help offset your debt to income ratio but if you're not generating an excessive amount to offset a second mortgage you may find it difficult to qualify for another loan unless your personal earned income can offset the additional debt of a 2nd mortgage. 

@Ashley Budyak we actually looked into this in regards to a potential acquisition that's located in a OZ. My opinion, it's a very specific strategy for certain investors and sounded better in theory than what it actually provides. Consult with your CPA to strategize if you're considering this option. Here is a brief overview of my understanding in regards to OZ.

If you plan to hold for 10+ years it could be a good approach. However, the money you put into an OZ fund is still subject to capital gains tax and is only deferred to 2026. This means if you sell property A this year for $1M and place into an OZ fund, you will not have to pay your capital gains UNTIL 2026. Short deferment. If you get involved now there are some decreases in your tax basis (10% I believe) but regardless you STILL have to pay capital gains. Any increase from there on out is tax free if held for 10+ years but you'd want to make sure that's a for sure thing. A 1031 might be a better approach if you're looking to hold for less than 10 years. If you purchase a property for $1M you need to put the same amount into development/rehab. This limits you to either development or complete remodels as most value add models don't justify the same amount of renovations as the purchase price.

It really depends on your investing strategy. If you're looking to build long term, generational wealth, and keep something within the family then maybe it's a good approach.

Others will decide to keep doing a 1031 and defer the tax until they die then the tax basis will be reset for those that inherit and will not have to pay the tax. 

@Matt Aquino, Mauricio Rauld, an SEC attorney, puts out a lot of fantastic information on YouTube regarding funds and syndications. From my understanding, as long as you stay within the SEC guidelines for raising capital, you can structure your returns however you'd like so you may need to get creative when dealing with smaller property sizes. You're absolutely right that it's really the numbers that will determine what you can and can't do. You may have to take less of the equity split as the GP to satisfy your passive investors, or structure your preferred returns differently. You have to carefully consider what type of investor you're targeting as well and figure out what they're looking for in a return

@Steve Shaffer I think anyway to vertically integrate your company is a great idea as long as you have the systems in place to handle the growth. What is your main goal? Acquire more assets, maintain and manage your current assets, boost the NOI in preparation to sell? I personally find myself trying to do too many things at once and have to refocus on my strengths and bring in help for my weaknesses or additional growth. Is there someone you could partner with to manage the snow plow business while you focus on the real estate side of things? With a business such as that you'll need employees. Employees can be unpredictable and costly so could potentially end up costing you more time and money in the end. Just some things to consider when evaluating the pro's and con's. We're constantly looking for additional streams of revenue that compliment each other within our real estate goals so maybe the snow plow could be one for you!

@Helen M McKane I have not been a member of Michael Blank's program but I was a member of a similar group. As you perform you due diligence on these different groups you'll learn that each one has a different vibe. I know you already know this but NO GROUP will hand you your first deal. These groups can be effective to meet potential partners, surround yourself with like minded people and educate yourself but the people who are excelling are the ones who take massive action. What are you looking for out of a group?

@Liz Faircloth a site I've heard tossed around a few times is crowdstreet.com. I personally do not have any experience using it so hopefully someone else may be able to provide more feed back but it's at least a source to start looking into. Sounds like you already have quite a bit of experience raising money, nice work! In the Phoenix area I know there are quite a bit of real estate clubs where you could meet people who are only looking to invest passively. Might be worth buying into if there are any in your location.

@Andrew Flora that would really depend on how much of your earned income you're trying to offset. It may not make sense to take the full depreciation and that is where an experienced CPA could help provide some counsel. If you do decide to do a cost segregation I can introduce you to a company based out of Phoenix that utilizes drones to perform their studies. They could also be a good resource for questions on if it would even make sense for you to do one. Feel free to connect if interested in the info and I'll introduce you.

@Pete M. sounds like you're approaching it the right way. Good luck with the deal!

@Pete M. in our experience this can be a difficult area to work in if you don't have the down payment and reno costs up front. You could possibly look to bringing on an equity partner to bring the reno costs and up front costs and figure out a split and JV on it.

As far as your valuation, I have a friend that's a commercial appraiser and yes they weigh heavily on the income approach but they also consider comps to justify their valuation.