All Forum Posts by: David Babayev

@David Babayev, Commonly called TICs (standing for tenant in common) but a structure like a DST. However instead of purchasing a membership interest in a Trust you are purchasing actual. interest in the real estate itself. These are frequently owned in cash with no debt and so are a cash only investment. DSTS once in a while will be also sold without debt making them a cash only passive investment.

But the non- recourse nature of the debt in a dst really makes it almost a cash only investment for you as there is no personal liability for the debt other than your investment.

@Michael P. Yes we're seeing many clients go this route.  It's part of the natural market evolution.  It can be a form of defensive investing that allows you to stay in real estate while waiting for the next buying opportunity in other sectors.

There are some good fractional NNN products that qualify for 1031 treatment and will have a low minimum of $100 - $150K of cash. Some are debt free (the best defense). Some have required debt acquisition.

We were just talking about this today with a couple of clients. In this market with interest rates ticking up and cap rates compressed highly leveraged NNNs have a very hard time performing. So you may actually be much better in a cash only fractional product rather than a highly leveraged commercial NNN. Obviously this is a floating generalization but also highly counter intuitive for the normal residential investor.

For some time now i am thinking about getting in to real estate but between work and family i do not have much free time.

i bought and sold my personal housing before but i do not have any real estate investing experience but i do have some savings that i would like to grow.

From browsing BP it seems like NNN commercial investment seems like what i would like to go with. but i do not know how to get started.

Suggestions on commercial realtor in Jacksonville FL?

@David Babayev with existing long term NNN leases value add is hard and returns are usually low, think cvs, Starbucks etc.. So big gains are unlikely. If you buy something and then add value including signing a new NNN lease with a long duration of 10+ years it can be a home run.

You can absolutely do value add.  That’s been our strategy and it’s worked great.  You definitely need to understand how long a building can sit vacant.  We assume 2 years before we get a new tenant and a good amount of landlord paid build outs.  Generally, how much cash flow you can make depends on how much cash you’re bringing to potential deals to get into larger purchases.  It’s definitely possible to get into 6 figures even without syndicating.  

Happy to share!  Not sure if anyone would believe me or not on this but the only time I spend is reviewing the monthly reports and cutting my manager a check which might be a hour a month.  If I raise rents, or expand then It's more.  My wife does the book keeping which takes here a bit of time.  Its the least management intensive of all the real estate I own.  It was a different story when I first bought it of course but it is a smooth running machine now.  Happy investing!

 Notes means mortgage notes. At a high level, investors buy mortgages from banks at a discount. Banks are willing to sell them at a discount when the borrower isn't paying. Investors can restructure or renegotiate the loan to get it re-performing, then either sit on the cash flow or sell the note at a higher valuation.

BP has a book written by @Dave Van Horn on the topic