All Forum Posts by: Dillon McGough

@Jamie Garcia look back on the first page and I gave a review of the success I've had thus far with the academy.  Was one of the best decisions I've made. 

1.) Can't write off mortgage interest with no loan 

2.) Ties up cash that would otherwise help you scale,  if that's the goal. 

How does the property cashflow with 3.5 percent down? Make sure you add in PMI to your calculations since you're putting less than 20% down.

Dillon McGough

If you are going to use a retirement fund to invest in passive real estate deals using leverage, don't use a self directed IRA. Look into a Qualified Retirement Plan (QRP). Not a lot of folks getting paid to set up SDIRAs seem to be talking about the Unrelated Debt Financing Tax that is triggered by SDIRAs. Whenever debt is used by a tax- deferred or tax-exempt entity (with some exceptions), the tax is applied to that portion of the gain that is debt financed. The investor gets socked with a tax bill at tax time that they never saw coming. How do they pay for this tax? You can't pull from your SDIRA, so this tax comes out of pocket.

A qualified retirement plan is exempt from paying the UDFI tax.  It has all the same benefits of the SDIRA with none of the downside.

Look into the QRP at https://www.totalcontrolfinancial.com, you'll talk to a guy named Damion Lupo.  No skin off your back and your mind will be blown at what you can do with this thing. 

Dillon McGough

There are definitely deals to be had, but I typically just use Loopnet to connect with brokers.  Look at any given market and just simply connect with brokers who have the most listings.  

If you're looking for deals, look for properties that have been sitting on the site for some time.  

Also, go to the actual brokerages sites, they often have deals that have not been listed on Loopnet. 

Dillon McGough 

Simple answer to this question is NO, there aren't many similarities between multifamily and single family calculations

Ask the broker for the last 12 months of profit and loss statements along with the current rent roll.  If you can acquire that and block out the property address, you can post on here and we can take a look at it for you. 

I suggest you get your hands on a calculator that will help you out with this.  I use the Jake and Gino calculator. It has a tutorial that walks you through exactly how to use it, which is foolproof. There are other calculators out there, but this is the only one I use. 

https://jakeandgino.mykajabi.com/store/zdt9X8o2

I'm not sure what market you're in, but you're looking at a 15 unit for 120k/door.  The rental income isn't the important number, it's the net operating income that you're looking for.

Come back and post the numbers here, I'd be happy to take a look as I'm sure others will too. 

Dillon McGough

Find a community bank looking to grow. 

Unfortunately, there is no shock factor for me on this one.  Quite sad to see.  I'm sure plenty feel justified in doing it because they know of other fraud in the system, some just pure greed.  Don't see much change anytime soon. 

Note: I do not condone fraud or any other illegal activity.

Great advice from @Lennon Lee. It sounds cliche, but you why is crucial to your success in REI. 1.) Find your why 2.) Choose a niche 3.) Educate your self on said niche 4.) Dive in head first, aka learn from doing deals. Don't be a seminar junky.

What @Jim Cummings said.  You'll need to honor the leases in place when you take possession of the property.  You nor the current owner can terminate the lease without cause. Couple different options on how to handle. 

What are you looking for? SFRs or multifamily?  I would connect with agents in your area of interest that own rentals of their own.  While you're doing that, I would get comfortable underwriting deals.