All Forum Posts by: Eric Jacobs

Vlad. Assuming your numbers are right and I think the rent projection for that area is a little on the high side, why in the world would you buy this? A 3 COC and a <7 on a duplex on the west side of Oakland Park? What is the upside here? Also, I would hasten to add that (a) you are not likely to meet your DSCR for financing and (b) if you lose one month of rent, that is 2 years worth of income...I am not one to tell people to go or don't go but from your own numbers I don't think this deal adds up buddy. Good luck

So.  there are so many posts here that I disagree with both in favor of and opposed to mentors/coaches/gurus that I don't know where to start so forgive the rant.  First, if someone is "introducing you to their network" that is not a coach.  Promising to introduce you to people presupposes that there is some underground river that once you hop in, its all smooth sailing.  Second, mentors are nothing like the lottery.  A valuable mentor can leverage years of experience and avoid the expense of learning the hard way.  I suppose I could have taught myself the law but it sure helped going to law school instead.  Third.  The biggest challenge is that the person hiring the mentor or coach does not have clarity on what they want and even worse, they don't know what they expect.  My best way of describing the value of a coach is below:

Imagine two men are stranded on a desert island. One is on one side, the other is on the other and they have no knowledge of the other's existence. Both are left with all the supplies they need and both have access to an airplane. Neither have any idea how to fly. Both want to get off the island.

After some days or weeks or months, both men get in their respective planes. They stare at the buttons, switches and lights. They contemplate what taking off would be like. They imagine themselves pilots. Still, neither has ever flown a plane, neither is a pilot.

One of them carefully looks through and tinkers with every component. He analyzes, and analyzes and analyzes. He thinks about it day and night but dares not to actually take off knowing that the universe of things he does not know is vast and his failure while not certain is at least probable.

The other castaway finds something that his counterpart didn't. He finds a telephone. The telephone only dials one number but that number is to a pilot. The pilot and the castaway talk about every component of flying, about operating the plane, about landing, about dealing with the unexpected. They discuss what it would be like to take off, to land, to get where he is trying to go. They try to game-plan as many scenarios as possible. In the end, the pilot tells him "you'll be flying this plane but I'll be there with you"

Eventually both castaways decide to go for it.

Which plane would you prefer to be on?

@Omar Khan is totally correct. First GC is a legit guy doing legit deals. They are snoozers that in my opinion would not be the first choice of a sophisticated investor.  Over the last few years you could have thrown darts at a dartboard and likely made money in MF.  That is not to say he isn't adding value or there is anything wrong with it.  I also think his payout structure is not something that an experienced investor would find appealing. Having said all that, if you wanted to throw your money and try to learn backwards, that would be fine.  As for the crowdfunding platforms, I used to represent one and all I can tell you is just because someone puts a 9 instead of 6 where the return is, does not make it better.  In fact, I would be immediately suspect of someone claiming a 9 right now.  At least GC's 6 is plausible.  

@Costin I. Totally agree.  This does not look like a workable plan (putting it gently).  

Most of the major companies that forecast this are bracing for the correction to be at least palpable out of the gate in 2019.  Obviously that is an over-generalization but I would fully expect and all indications are in my mind that New York, California and Florida will certainly see something next year.  Usually these things have a way of starting in the West and moving their way east so I'll be monitoring West coast real estate very closely as we close out this year.  

@Nicholas White by the way, my main office is on Miami Beach and I can tell you that a "flip" on Miami Beach right now is a suicide mission you are absolutely right...I would overpay for a 24 unit in Charlotte (though still a little pricey these days) than buy anything on the beach.  Candidly that's why I'm looking forward to a bit of a pull back...its a weird market down here in South Fla. and parts of Miami Dade County (Sunny Isles) have about 17 years of supply -- literally --lol

Um. Too many to read all so forgive what I assume will be some redundance.  First of all, the idea that you (and everyone else) have determined that there will be a "crash" and therefore you are going to sit on the sidelines until the sky falls (and pay cap gains I might add) is putting it mildly, not a good idea.  First, there are a million reasons a correction, were there to be one would not look like 2008 not the least of which is the amount of capital sloshing around out there in the world.  Second, there is always opportunity and to be honest, I'm kind of looking forward to a pull back and see it as a wonderful opportunity. Third, the enemy of the dead investor in a downturn is not the downturn its debt.   RULE #1 OF INVESTING --- PRESERVATION OF CAPITAL. 

I have a 100% fool proof solution for this. Find another agent.  If they don't understand what you are doing, they are bringing you no value.  They are likely finding you the wrong properties where your offers are not likely to get accepted anyway.  

I lend HM and represent quite a few HML and @Greg Downey is exactly right.  @Account Closed I'm not sure where you are borrowing but it is a rare occasion that you will see HML lend without points up front because someone has to get paid on the deal. The only way that may happen is if you are borrowing from a family office or mom and pop lender. If you can get it, Great but I would not advise anyone to refuse to work with an HML that charges points or you will deal with a much smaller universe of HML. As for the 12/3 for a deal that small, it makes sense though you may be able to shave one point. There should also be no junk fees because you should be getting a term sheet out of the gate where you can confirm what you are or are not being charged. Finally, ARV is tricky but all things being equal, 75 is a pretty good ARV for HML. Good luck

I think what is missing from your model is anything resembling a plan.  There is something about the real estate investing industry that lends itself to the mistaken assumption that investing is something other than a real business.  You have to have an objective, formulate a plan, then execute.  All of the various models (and more than are mentioned above) are potentially lucrative. The fact that you are not very liquid is not at all an impediment.  The reality is that without clarity and a plan, you are just bumping around in the dark which may explain your frustration.  As an aside, and I'll admit I am not a fan of wholesaling for a variety of reasons, if you are going to get into wholesaling you better really understand what is happening in your market.  From a macro standpoint RE is changing rapidly and indicators point toward a higher probability of declining growth.  Good luck....