All Forum Posts by: Franco Li

First of all, congrats on finding a seemingly sweet deal! If there is already a tenant in place, make sure you still conduct a background check on them and perform your due diligence. You never want to be in a position to inherit a terrible tenant and face eviction risk. Before signing a new lease agreement, you should definitely look at the market and determine the appropriate rental rate, then see whether the current tenant is willing to pay up or keep the lease. To be very clear, you will have to sign a new lease agreement with them, so make sure you hash that out. Good luck!

Hello All,

My partner and I started a company that provides free real estate analytics to the public. We've created unique algorithms that assess each property and run recession/stress scenarios as well as expected market return scenarios for our users. We also provide users a unique opportunity to see how sensitive rental rates and expenses would be to their returns. 

Our goal is to provide free information to everyone interested in becoming an investor or agent. 

Let me know if you guys have any questions. Good luck!

Regards,

Franco

I honestly think you're having a great start versus other teenagers, but I agree with Mark that a real estate license shouldn't really be a priority or a main objective. No offense to the brokers out there, but if you can be a lawyer or a doctor while you intelligently invest, and scale, isn't that even better goal? 

@Andres Bernal I think thats a brilliant idea. In New York City, having a driveway or a garage already boosts your value by $50-100K. NYers are now doing exactly what you are, because the locations are so densely populated, and there is incredible demand for parking. In terms of $$/month, I think you should look at the market. I would say though, $100/month in my opinion is average across the country. In NYC of course, the average is anywhere between $200-500 I think - at least I rent mine for $350...

Best of luck!

Anybody looking into CRM should try Zoho or Salesforce. We've used them before and they are great at tracking. 

A commercial loan that requires 20% down is already an achievement in some markets. Some lenders require a 25% down, so I think that segment of your deal looks great. The only problem I have is the 5Y adjusting rate; are you sure that its not just a 5Y ARM rather than locking in for 5 years then locking for another 5 years, etc.? Btw, a 5Y ARM typically would adjust after the 5th year and lock annually depending on Libor or another benchmark rate.

As a borrower, thats an insanely sweet deal in my opinion if you are correct about the loan structure, because you are pretty much hedged everywhere - i.e. you'll only face minimal interest rate risk, and even then you can refi- out if the rates too high. 

As a lender (and professionally I'm in investment banking), I've never seen that before because it sounds like a terrible deal for me. I will say though, that this world is huge, and there are brilliant people who are smarter than me and may think these are great lending terms (perhaps they can trade/sell this elsewhere after they originate?). 

In conclusion, I think you have to make sure to understand what the financing structure looks like. You have to also make sure that if its a 5Y ARM, thats its a 5/1 and not a 5-6 or something crazy. Make sure you understand the monthly and overall costs. And also, do more research and see if you can get an even better rate! Good luck friend.

Investing in other areas outside of the US is sort of risky unless you are in a developed market - i.e. Europe, Japan, China? You have to understand that buying domestic properties for investments in America is most likely very different than buying elsewhere. For example, does Thailand or Vietnam have the same lending criteria? Do they have property management services, and what about the eviction process? How will you be taxed because it's foreign income? What about insurance, and will you be required to have one? 

All these questions just makes investing outside of the US much harder in my opinion, and unless you know the answers to all of these (perhaps your home country) then I would suggest otherwise. MOREOVER, unless you are making ridiculous returns, the USD is very strong right now and will probably be over the course of 2017 - depending on which bull/bear you ask. You would want to make more USD instead of getting rental cash in EUR or AUD or Yen for example. And on top of all these problems, you'd have to swap back and possibly get hit with FX risk. 

So in conclusion, why bother?

I agree with @Mark Holencik! If the owner was in good financial standing he probably wouldn't be in this situation. I highly doubt that you'll be able to get him to bite the bullet at $34K. You are better off finding other manageable opportunities. There are plenty of fish in the sea!

I think you should invest in a good CRM software - salesforce, Zoho, etc. It has helped my company quite a bit in the beginning to manage who we are talking to, what our last conversations were, sending out mass emails, etc. Good luck in your research!

Hello Everybody,

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