All Forum Posts by: Daniel Han

@Brian Burke  what would be the absolutely worst-case scenario that would cause losing 100% of investment like Kathleen described? assuming the deal was a reasonable one.

something like 1906 SF earthquake that destroys apartment buildings in the bay area? would something like that cause the entire thing go belly up?

I'm guessing even in a severe recession, you would use the reserve, stop distribution, raise more capital (reducing overall return). 

This covid19 situation will last for a while and I expect this will result in a high unemployment rate. 

With the unemployment rate of 15-20% with no eviction in many cities, what strategy would you deploy to be successful syndication?

For those syndication deals that already completed, are they basically expecting a lower return?  if not losing investment?

Not the interest rate itself, but the fact that they will be buying MBS will impact real estate.

The mortgage rate shot up last week diverging from a 10-year treasury because not many banks wanted to buy MBS.

Since Fed will be buying MBS, the mortgage rate will head lower.

Could you explain why having LLC would reduce the audit risk?

I'm in South Bay. I just completed the first out of state deal and looking at the central valley area for the next one.

I looked at Roofstock closely for some time. I like the idea and I think it can definitely work. and there can be good deals. I'm still looking into it. However,

I just closed the first out of state property using a local realtor.

Here are what I learned.

1. At least the inventories I was interested in, in many cases, the Roofstock ledger showed problematic tenants - late payment and eviction process.

2. There are better locations and better deals outside Roofstock. Roofstock is very small compared to the overall listing.

3. Good mortgage broker and realtor can make it easier if you know where you want to invest. 

4. I didn't personally visit the state I purchased the property. I will likely visit sometime later, definitely before buying another property.

I think the key is to put together a good team. The realtor I used did a really good job from finding a house, negotiating prices and closing. The mortgage broker was experienced in out of state purchase and closing. so everything went relatively smooth.

I'm a little confused about the logic of using HELOC. Why would you cash purchase using HELOC? isn't HELOC interest rate always higher than a conventional 30-year loan?

Let say you have $200k in HELOC and you have $200k cash.

In what circumstances would you use HELOC instead of your saving for the deal?

It seems like the theme is when you don't have capital, you put your time and do the work. But if you have capital, then let the money do the work. 

Is there a place somewhere in the middle?

Say you identify a city that's growing, find a good school district, and buy 10 properties ($250k each) with $100k down payment for each property. With the cash flow, pay off outstanding mortage.  Is that a bad strategy?

With limited capital, the recommendation is to put a lot of time and energy to find a good deal. 

How about the opposite case where you have $1M cash, steady income, and high credit score?

Would you do things differently?  What would do you?

Thanks for the information. I really appreciate it. 
I'm offered deferred compensation at work. I guess I will be contributing more to the deferred compensation account if passive real estate activity ramps up.