All Forum Posts by: Dan Brewer

Ian -

A couple thoughts here. Since you are a US citizen, it provides a broader range of financing options for you. HUD financing is always the most preferred method, although I have lost touch with their seasoning requirements. However, I am confident they have a very high LTV. The 2nd option is private lenders. I manage investment funds, and provide such funds to private lenders. One of my clents provides a 30 year non-recourse loan product that is specifically designed for use with an IRA and for foreign investors. There is no minimum loan amount, although fees are frozen once a certain loan threshhold is reached. The current LTV is 50% of ARV, but I understand that will likely soon increase to 65%. This is provate money, so your fees will be higher. But it allows you to minimize your cash investment and have the ability to purchase a larger number of properties. They lend in about 20 markets, so that will be a limitation as well. Perhaps you can let me know the markets in which you are purchasing properties.

I am a firm believer in passive investing, and often feel that investors will achieve the same general return with less hassle when they invest in certain low-risk passive investment offerings. If you have an interest in finding out more about this philosophy, just let me know. I offer webinars on the topic, and can easily include you in my next series of webinars.

Tim -

Two thoughts to share with you.

1. I have always understood moile home parks to be the best asset for ROI. The economics are simple - fewer communities are supportive of their existence, so (I would guess) there are fewer mobile home parks. Further, and particularly with the changes in the economy and Dodd-Frank, there is increased demand for rentals. I manage investment funds, and have had a couple of opportunities lately to provide capital to a group that invests in mobile home parks. Soild business model, great returns. So I think it is a good investment class.

2. Its a crazy good time to invest in assisted living, and that is my 2nd focus area. There are two basic models - the traditional, larger assisted living communities, and then a recent trend in converting SFRs into smaller assisted living facilites with 6-12 beds. The traditional assisted living community is a completely passive investment for investors, the converted SFRs is a very active investment for investors. In addition to the conversion, you have to understand the AL industry and set up the operations. Here in Kansas CIty, we are evaluating a model whereby we will provide all the conversion, opertional set-up and management, and create a passive investment for investors.

Good luck on your efforts in these areas. I'd be curious to see how it turns out for you.

@Gautam Venkatesan

I appreciate your interest, and will send out an email to you when we are in Dallas. We will be beginning a new series of Webinars in the next 2 -3 weeks. I will apprise you of the dates and times, and you are more than welcome to attend. If you have a chance, please go to my website and register (just your name and email required) and that will get you on the official notification list.

Chris -

I concur with @wendelldeguzman and echoed by @jscott, once your cash is out, cap rate has no relevance. Perhaps you are tryin to determine something else or we are not fully understanding the scenario or what what you are asking.

Curt -

You can check with Peak Asset Lending, based in the Kansas City area. They provide a non-recourse 30 year loan product with no mimimum loan amount, although they do freeze their fees below a certain loan minimum. IT works with IRAs. They can also provide cash-out refis. Atlanta is one of the markets they lend in. Good luck!

Joey -

First of all, welcome to real estate investing.

I have been in the business 21 years, full-time since 2001. We pretty much exclusively use Apha Title - ask for Patsy. I believe she is in their College Blvd office. She will take care of you!

Thanks, Dan

Hi everyone -

I am based in KC and will be in the bay area meeting with investors from 3/20-3/23, but already have a commiment the evening of 3/20 otherwise I would love to attend. I like the topic format as it was laid out, seems many of you are looking at out of state rentals. I do not sell out of state rentals, I focus on the finance side of the business and support rehabbers/turnkey operators in about 20 markets.

Can offer / knowledgeable about?

I have a few suggestions as you evaluate your strategy:

1. I feel the most important item to consider in your strategy is if you are a passive investor or an active investor. That will drive every other decision you make. (Hint - contrary to popular belief, single family rentals are not true passive investments. If you think they are, you are setting yourself up for surprises).

2. There is a tool on the marketplace that I am very familiar with and use it with every deal I underwrite. I am smart, but I can't possibly understand 20 different markets and how to determine a good location from a bad location. So I rely on a tool called RentFax (www.rentfaxpro.com). it combines all the important criteria that affects the quality of a location (crime, schools, transportation, unemployment, etc) and creates a single index score to provide a location "grade". The index score is presented to you on a colored spectrum, with RED indicating a poor location and GREEN indicating a great location. There is also a nice report that tells you what characters scored higher or lower. The closer the score is to Green, the better the location, and less income volatility should be expected. The closer to red, the less desireable the location and the more volatility you will have with the cash flow profit for that property. RentFax has been well field-tested, and a major investment property insurance company uses it for their risk underwriting.

3. I can refer you to 30 year non-recourse financing that is available to leverage your purchases in the 20 markets I reference. No credit check.

Please contact me if you want any more information or if you possibly want to meet up/talk when I am in the bay area. I have some time Sunday AM for sure. I can also send yo a link to one of my webinars. Otherwise, good luck investing!

Chris -

A couple thoughts to help you think this through. First of all, if you do decide to take the plunge, as you stated, always expect the unexpected. I have seen to many situations where the investor buys a property in a questionable area, and incurs increased vacancy, maintenance, non-pay etc. And their reserves are too low. So whatever decision you make, ensure that you check out the properties thoroughly (particualrly the location) and leve yourself plenty of cushion. Regarding the location, I use a tool frequently that I recommend you use www.rentfaxpro.com. Its ideal for evaluating the location of properties in areas that you are not familiar with, particualarly out of town. It takes into consideration all the factors you would look at if you were to purchase a home - crime, schools, transporation, unemployment, etc and arrive at an index score that is placed on a spectrum. Right away you can tell if the property is in a more difficult area, which is going to introduce more valatility for you. The tool also provides a rental estimate and an income estimate. There is a fee for the service, but you will find it very economical, particualrly if it helps you make a better decision.

Last point - the property manager is KEY to the success fo the rental. Make sure it is a good one, get references. Good luck!

Cory -

Glad to be of help. I regularly provide free seminars and webinars on my philiosophy towards investing, passive vs. active, etc. I am travelling to the SF bay area next week for a series of seminars, and at some point I will be in Dallas (I notices you are in the Austin area). If you ae interested in the webinars or when I am in Dallas for a seminar, I will send you a connect request and you can request and can keep you posted.

Cory -

I'd be interested to find out how much time you wish to devote to your investing. Often investors talk as if they want to be an active investor, and yer in reality their true interests and time availability indicate they should be a passive investor. I believe that is the first and foremost characteristic that defines an investors investment strategy. In general, if you seek returns higher than the low teens for your invested dollar, you will have to get progressively more active in your real estate investments as your target return increases. However, at 12% or so, there are many truly safe passive avenues for an investor to acheive that level of return, and then use their time for other endeavors. Could you become a hard money lender? Certainly, and you could achieve 14%+ returns as noted earlier in this conversation thread. But that is a very active role, with asociated risks. To be a HML, for the inherent time and risk, your target returns should be MUCH higher. Otherwise, I recommend you consider real estate investment funds with proven managers, similar to a stock market mutual fund. I have managed such funds for 10+ years, and am a firm believer in them for the passive investor.