All Forum Posts by: Eduardo Zepeda

While evictions are frozen at the moment, you'll still have recourse after the SIP and moratorium is lifted. I do believe that you'll need to follow specific procedures to put tenant on notice of their default and then there may be a cure period by law according to these new executive orders, so you'll want to check with such orders in your city and county to make sure you follow these.

For our deferment plans and lease modifications, we have been drafting lease amendments with the revised payment schedule with several other legal provisions for the tenant to sign. I'm not asserting this is the proper way, but it's the procedure we've been using with our commercial tenants. 

@Sienna Parker my suggestion is to model it out and see what would put you in a better position short, mid and long term and base your decision off that. Then it comes down to the opportunity cost of doing one versus the other even with the employer match. Of course, you need decent but basic math analysis skills to do this. Good luck.

To everyone that thinks that paying down the principal balance reduces risk, there's another side to consider with this that may actually increase your risk and exposure. Essentially the reason for paying down principal is to avoid ever being upside down in the event of loss in market value of the asset. However, fluctuating asset values are not really relevant if you are holding long term and have adequate cash flow (with the exception that you have certain loan covenants to sustain a certain DSCR). Of course, that's a big "if", but I'm presuming that's the prudent investing approach most on here are using. Now, I'll direct us to the question that often comes up about transferring title to an LLC. The reason we do this is for asset protection, of course. Let's say you have $100k of equity in one property at 50% equity. Assuming you hold title in a special purpose entity, if you're sued, one could tie up that $100k of equity in that one asset. Why not, instead, have $50k of equity in one property at 25% equity, and another $50k of equity in another property at 25%? This way, assuming you hold each in separate spe's, you're only at risk to lose the equity in each property if sued related. Risk, in my opinion, is more about the amount of equity you have at risk to lose vs what you may temporarily "lose" in asset value. Essentially, you're mitigating risk by spreading your equity across two assets vs having it all in just one. Disclaimer: I'm not an attorney and this only reflects my opinion of the way I understand it and based on conversations I've had with other qualified professionals.

@Carolyn Morales the longer the better always without question. The reason we borrow as investors is because our ROI is greater than the cost of the money. If you are no longer deploying it and just spending your cash flow as personal income, then consider paying it down because at that point your yield is 0%.

@Shiloh Lundahl I think we passed that point a long time ago

@Shawn G. @Tj Hines I completely agree with what you both said. I spent a big chunk of my time in the foyer and “deal room” just talking to others. It’s all about the relationships and connections you make. Case in point, my friend and I happened to get invited to have lunch with Vinny Chopra and his team on Sunday. The table was filled with individuals taking massive action and getting deals done and I made some valuable and invaluable connections from that lunch alone that will hopefully turn into partnerships. I’ll be looking to attend many more events like these in the future including Joe Fairness’ one coming up in February.

@Ronnie Holbert Assuming you don’t spend it on personal expenses and also assuming you plan to continue investing, I would keep as much cash flow as possible. It’s about control of your capital. Is it better to have an extra $10,000 in equity or $10,000 cash in your account? The answer to me is obvious. Cash in my account is cash in can put to work for me and use whereas if I apply that to equity, I lose control over that and the ability to have it work for me until I refinance or sell, but then I’m still borrowing of course and then I’m dependent on a lender willing to lend along with other factors. Again, it’s about control over your capital and the ability to have it work for you which you do not really have if it’s in the form of equity. This also assumes that you’re investing in assets that will yield more return than your cost of capital aka your loan, which is why we use debt in real estate to begin with. Lastly, principal payments are not considered an expense aka a tax deduction anyway.

Hi @Melissa N. @Shawn G. @Jamie Burns and others attending: I'll be attending from the west coast (San Francisco) and bringing a colleague or two with me. Would love to link up with other BP members and meet some local RE professionals in central Florida. I'm visiting with a good friend of mine during the trip that lives in the area and I'm looking to also invest in some projects with her in that market. Let's connect!

@Ray A Delfi I think you should save your cash. Get out while you can and free up the rest of your cash for the next one. If we keep sliding down the path we are who knows the next time it’ll be at the value it’s at and your cash will be tied up the entire time.