All Forum Posts by: Dante Anderson

After finding a  suitable borrower to place your money with, but before the money trades hands, be sure to underwrite the deal thoroughly. This includes getting comps or an appraisal to verify value, lenders title insurance,  a proper note and mortgage,  and you must be listed as a mortgagee on the borrowers property insurance policy.

Our lending criteria in our lending business caps our loans at 65% of the after repair value and we control all rehab funds as we hold them in escrow.  Whatever criteria you adopt, be sure to stick to it.

Find a lender that you can shadow or work with if you would like to cut the learning curve. 

Reach out to me directly if you would like. 

Seconding @Anthony Gayden. I was all about MFHs until I started running the numbers on them in my area. The price is higher and the rents are lower. I also thought 2BRs/3BAs were the ultimate choice for a rental. But my 2BRs bring in just as good returns with fewer tenants and fewer headaches. Finally, I thought I wanted to BRRRR. Now, I just look for low-cost turnkeys.

I have a property 2.5 hours away that I only been to twice. Managing it is easy and done with handyman and tenants letting in for repairs. I have sold many CA buyers 2-4 units in Chicago. The ones who bought in good areas and used my contacts for handyman/repairs do great with cashflow+appreciation but some bought in rougher areas who try using 3rd party managers and the expenses eat into profits even just turnover costs are way under-estimated by most investors add in lower quality tenants and that 10%+ cashflow deal turns into 0%. I have not seen properties really work well with managers since 2018 or so.

@Dante Anderson

Obviously it depends on your objectives, the deals on both sides, ..., which we know nothing about. When it comes to international investing, buying a villa in the Dominican Republic isn't very exotic in that many Americans have done it before. You'd still need to know what they're doing. Also, be aware and beware of the sargassum risk. It's a deal breaker for me (mind you, Florida is at risk too).

@Greg Scott

I'm not sure what you've been looking at abroad but, especially today, investing overseas is in many instances much more profitable and less risky than in the US, where you also run all the risks that you mentioned.

If the profitability and the risks would be similar, it could be argued that it's better/easier to invest in your own backyard so I totally understand where you're coming from. However, that's not the case. I could write a novel about this but let me ask you two questions instead:

1. Don't we think investing in the US is risky with high interest rates, historically low affordability and cash flows and high prices inflated by 15 years of artificially free money that's gone for good? Have we forgotten the 2008 global financial crisis that wouldn't happen in foreign countries where properties are bought with cash and the risk of foreclosures is 0? The whole financial freedom through real estate movement/model has been created on the back of artificially low interest rates following the Global Financial Crisis and that model won't work anymore for most unless interest rates or real estate prices in the US drop dramatically and most economists think they won't and for good reason. The low rates were an anomaly and totally unnecessary, as today's reality shows that the economy can boom without them and created that inflation scare that nobody wants to see again.

2. Is it smart to have your job, all your real estate, stocks and everything in one single country and at the whim of a single government? Is that (financial) freedom? Haven't we learned from Covid that the freedoms we take for granted can be taken away from us in a heartbeat if we depend on one single country? Isn't diversification a basic principle of building and keeping wealth? Many of the wealthiest and most successful Americans own a huge amount real estate overseas. In Mexico alone, a country I know particularly well, it's billions and billions of dollars. Do we think all these people are stupid?

In any case, it's great that you made those comments . They are really useful in that they help everyone realize that investing internationally is a matter to be taken seriously and isn't akin to a walk on the beach. Although having to inspect beautiful beaches across the world is part of my investing routine. Poor me! ;-)

If you do invest internationally, it can be helpful to have the right team. Because, as you seem to have found out by yourself, as the best deals generally don't show up in plain sight for everyone to see, as is the often the case in the US too. So, if you still want to find something overseas that would fit within for objectives, feel free to reach out and I'll be happy to help if I can.

How did you jump from "I can't find anything in my back yard" to "I'll invest in the DR"?

Investing abroad adds a significant level of complication and risk. The list is huge, but includes things like monetary risk, legal differences, government corruption risk, management risk, supply chain issues, insurance practices, utilities, tax differences, banking differences, etc.  You will also need to understand how to file taxes properly, potentially in both locations, and you will probably need to travel there from time to time, most likely when you do NOT want to go there.  (This will be a business, not a relaxing vacation on the beach.)  Investing in another state carries some of these same risks but to a much lesser degree.

Every time I've looked at something abroad the risk / profit trade-off seems imbalanced vs. what I can do within the US. I'd rather make a ton of money in the US and vacation when and where I want.  Once you have more than enough income stream from the US, taking some riskier gambles abroad may make sense.