All Forum Posts by: Elliot Landes

@Brian Burke

Thank you for the reply! I actually just downloaded your book yesterday and plan to start reading today.

Interesting to know you (and probably other sponsors) wouldn’t want leveraged money invested.

I could easily cover the debt service if cash flows were dry.

The increased risk is a concern, but part of me thinks this whole thing is so risky already, what’s a little more? Especially if I’ve minimized some risk by thoroughly vetting sponsors, diversifying amongst different sponsors, and get in to differing asset classes.

Not that I’m trying to make an argument for it, but would your response change if you knew I had more money coming your way down the road? And dry debt service won’t be a problem. It’s stable, reliable income from a business venture in addition to my W-2 earnings. My plan is to invest large portions of that money in to RE. But looking for ways to kickstart that process I thought I’d explore leverage to invest now to see benefit sooner and pay back that debt later. Maybe I just need a little patience.

@Steve K. Spoken like a jaded realist. Speaking my language! Lol.

I’m new to RE investing, but has this guru/lifestyle crap always been a part of the RE world? I’m interested in real estate for money, not for hugs and accolades.

I'm considering buying in to a syndication with some cash on hand.

BUT! I have plenty of avenues to use leverage to increase my syndication buying power (HELOC, Pledged Asset LOC, 401k loan). Everyone talks about using these as a means of buying rental properties, but what about using them to buy into a syndication deal?

Direct ownership in rental properties just isn't right for me personally (at this point in life), but I'd love to use leverage to increase my wealth.

Interest rates are all low enough (4-5%) that it makes sense on paper, even if the ROR doesn't hit its full targets (15%).

I don't think I'll be over-leveraged (but that's a relative term around here since a lot of the BP audience seems to leverage like crazy). I'm a high W2 earner, with a stable job, and I don't have any other investment related debt currently. My current debt-to-income ratio is about 30% - includes car, home, vacation property, and credit card (used for expenses and purchases and is paid in full monthly).

What does BP think?

@Bob Evans

Hi Bob, thanks for the reply. I’m looking for passive investments, not getting in the GP position.

PM sent as well.

@Joseph Guzzardi Jr

Hi Joseph, where was your first property? What kind of property was it? I’ve also been looking in the AC/Ventnor area.

I have my eye on a few places, but I’m hesitant to pull the trigger. I keep having this internal debate about whether or not I want to actually be a landlord. Even with a PM, it’s still going to be more hands on than I can handle, especially dealing with a B-/C class neighborhood like AC.

If you find a REALLY good PM, please let me know.

I also would be interested in partnering up with the right person, and letting them have a “sweat equity” portion in the property. But just being totally candid, I’d want someone with a few more deals under their belt and a track record of cash flowing properties. You may not fit that bill right now, but it sounds like you will! So, if you find yourself looking for something bigger in a few years, and need access to capital, let’s talk.

My research had lead me down the path of becoming a real estate syndicate. I don’t have time, knowledge, skill set (or energy) to manage rentals, and I’m struggling to find deals that make sense on my own.

I keep reading blogs, case studies, etc that are all post-deal (I.e that ship has sailed). Where do I find info about investing on these up front? How do I connect with GPs that manage these syndication deals? Maybe I’m looking in the wrong places but I find a lot of “look at this great deal I did for my syndicates” and not a lot of “look at this great deal I need investors for!”

Is there a place on BP I should be looking for a syndications? I’m sure it’s out there, maybe I’m just overlooking it.

I’m looking for firm with a steady track record. Returns that beat average stock market returns. Mixed use or residential. Philly or northeast US preferred because it’s the areas I’m most familiar with.

@Anthony Williams

If it cash flows after all expenses (including vacancy, capex, repairs, mgmt - all at conservative estimates) then hold! Use your military status to buy another home (duplex or higher so you can house hack) with low rates and low money down. There was a BP podcast episode with someone from the military that started their RE career this way. I think her story was something like this... Bought a home using military lending, got transferred and decided to rent it rather than sell. Next house was a duplex (also with military lending) so she had two cash flowing units. Lived in it long enough to satisfy loan requirements and moved in to a new home and did it again. No limit on where that can take you! Good luck!

@Deisy P.

I recently clawed back money from a contractor through my credit card company, but that probably only works if you paid by credit card. Very similar situation, I gave the guy a deposit in haste and later realized what he wanted to do was bogus. Confronted him about it and he had the audacity to tell me there was a 10% cancellation fee! HAH! Gave him 3 documented tries to rectify the situation and clearly outlined what I wanted. No response. Credit card company opened up a fraud ticket and billed back the deposit. No problems.

Barring that, the amount involved could be enough to take him to small claims court.

Failing either of those, it’s several important lessons learned (Albeit at an expensive price tag).

1) Get multiple bids.

2) don’t always trust your realtors contractor recommendations (had a guy once bid pre-close and then double the same bid post-close, clearly in cahoots with the realtor) and

3) don’t pay small contractors/handymen before any work is done (more comfortable doing this on large/sophisticated outfits). I’ve started paying in 1/3rds and the first payment is made at the END of the first day. If they must have a deposit, I’m on to the next one unless I’m really desperate. If they say “well, I need to buy materials” tell them you’ll buy the materials, so there is no out of pocket expense for them upfront.

As for doing this all on your own as a female, don’t let that alone one stop you. I’ve got two strong daughters who I hope to raise to be fiercely independent. Does that mean they’ll make good landlords or RE investors? Who knows!? That’s a unique mindset that not everyone (male or female or otherwise) is cut out for. Being female and being a good/bad landlord or RE investor are mutually exclusive. I think the real question you need to ask yourself is do I have what it takes to be a landlord/RE investor?

Also... I know in the moment these situations are stressed it’s hard to see through the haze, but 6 years from now when your crushing it with 65 doors, you’ll never even remember this moment.

@Frank Robinson

I know this reply is a few weeks late but thought I’d share. I don’t own any rentals, but keep a pulse in the market. I have lived in Pennsport for 7 years and since day one had eyed up Dickinson Narrows for rental property. Prices WERE great there. In the past two years, prices have soared and rents haven’t really come along for the ride quite as much. You’ve still got a lot of long standing owners that paid $70k in 1973 so they don’t need to rent for more than $900/mo. So that keeps the price down on new rentals. As a result, I don’t like that neighborhood from a rental perspective anymore. There might still be a deal hidden in there somewhere, particularly in the south end of Dickinson Narrows, but I think that ship has sailed. My sights have been set further south towards Whitman.

Thanks for the reply. Are you active in the RE sales side in AC? Would you be available for a call or to exchange a few messages? I have some specific questions that I think an experience and established RE professional such as yourself could probably help me with.