All Forum Posts by: Franco Li

Amit Kal I actually think that's the wrong perception, and perhaps you've had different experiences. I agree that some folks have some sort of Ivy League background perhaps or other industry relations that expedited them in their career, but I know many folks (myself included) that came from a non-target school and just worked their butts off. I think MBA schools like to sell folks that you can get a front office job, but 10/10 I would hire someone who's had more relevant experience than someone who worked in back office or out of industry, and got an MBA. Of course, life isn't a cookie cutter, so I'm sure there are many other success stories

This is an extremely dense topic but I'll try to give it a shot. In investment banking we typically work with companies who want to do a private placement via Reg D. This helps them work with a small amount of investors to structure a deal and also gain a competitive advantage from pricing non-disclosure. Also Reg D requires less legal work vs 144a. I'm not sure if you should look into a Reg D offering since you'll probably need to consider underwriting fees (maybe a small I-bank can do it), security counsel fees, and even potentially clearing house fees if you do it as a security. If you go the route of a loan or note, perhaps that makes more sense. Also, you can't just source money for a Reg D just anywhere - i.e. Facebook. You can only do a Reg D with accredited investors.

There is the asset that can be appraised for a "intrinsic value" but if want to appraise it like an investment, you'd probably have to look at cash flow. In a perfect world, your property value should equal the discounted cash flows into the future that the property can generate - not realistic. But it's also because we don't live in a perfect world, where pricing and rental arbitrage can occur and help you make some money!

Coming from a Wall St background, I can tell you that most people don't care. In fact, a lot of folks who get the degree because they want to step into other areas and it is a beneficial experience, but practical thinking and a thirst for continued learning will probably get you further.

I work with many all cash investors in NYC, and the reason they do this is 1) the market requires them to since its so competitive, and 2) they need to park all their cash. 

If you see "only cash offers", that probably means they want a quick close, but are probably not ecstatic about selling until an offer comes along that they like. OR they are just very ignorant of the market...

I think judging their motivation is still difficult since as you suggested, it eliminates a good amount of buyers, so why do it? I also don't think it discounts the price at all. I feel these people are probably just not eager to sell but will sell at the right # and cash.

Absolutely agree with @Andy Webb

Your LLC will only benefit you if you have substantial assets, which can probably help you get some financing. In the beginning, you may find it difficult to secure leverage through an LLC, although there are lenders who can charge a higher rate (and require your guarantee, thus recourseable) and give you financing through the LLC. I think you should speak to an attorney who can describe this better, but if you are a stakeholder, your LLC will not really protect you if you are deemed the ultimate beneficiary. You will still be the manager of the LLC, or owner of the asset, and thus makes you liable in a legal struggle. Like I always tell folks here, I think you should do it later but doesn't hurt to speak with some counsel to get more info. Good luck!

As a New Yorker, I can tell you that you have to be really good with the numbers. My startup works with a lot of investors who buy and rent in the NYC area, but most of them only do it to sit cash and bet on property appreciation. Cash flowing in NYC is very difficult, but it seems like you have a great idea looking at PA, CT, and NJ. I would probably not look at CT because its a difficult market but you may find some properties that can be flipped. 

Also, are you asking someone to finance your investment and they only get 10%, or both of you guys will be on the mortgage? Irrespective of whether you put down the downpayment - which I understand would be substantial - you are hindering the person's ability to leverage for something elsewhere; who would do that? You're better off asking an investor to borrow cash.

I've never heard of that before, I hope you haven't paid for anything! Agents should be asking and vetting whether you're "legit" or not before showing you places, but probably won't be asking you for an upfront. Thats insane haha!

Hi @Bob E.! Sounds like you have a great investment in your hands. With my investments in NY, I usually provide a fridge and washer dryer. More specifically, I usually inherit a fridge and only purchased the washer/dryer ($300 from Sears) if there isn't one or if its old.

Considering your situation, why don't you try marketing first and see if the area usually asks for all utilities. I don't think many renters bring their own fridges around though...

Good luck! 

I don't think "cash offer" can mean anything else except all cash - at least not in NY. A financing contingency clause is more to protect the buyer from backing out of the purchase agreement if they can't secure leverage, or to set an allotted time, so that sellers don't need to wait for a buyer to get approval for finance indefinitely. Saying "cash offer" will only get the sellers hopes up that the transaction closing will be super duper quick and easy. Best of luck!