All Forum Posts by: Henry J.

John Anderson Dustin Cook Gene D. I looked into investing in Holdfolio around Xmas time last year. I decided not to invest because I needed to look at their rehab quality, area before I can finalize and for the amount it didn't warrant a trip. I'm just sharing with you what I did while I was learning about the concept. I asked for the address of the properties and rent payment info. I evaluated them as if I'm buying them individually - check comp price, rent and area info. I added all the property values together and compare it with the fund sales price. I concluded that the success of the fund depends heavily on the PM and the exit strategy. I need to study more of the area / price, as Holdfolio claimed that they are in b class neighborhood but I couldn't verify. I can share with you my spreadsheet if you PM me - I don't know it's OK to share those in the public forum. When I saw Jay responding with all his experience and insight I wasn't sure if I needed to chime in - but I figure I will throw in my study / experience just so you have that as well. Thanks. Henry

Thank you all for the info. I'm learning a lot here. I'm researching the mystical UL and this post is giving me a lot of info. Thomas Rutkowski please help me to clarify these point if you could. -is the return capped (floor and ceiling) at certain %? If so, what would it be? -can you share what would be the investment vehicles? Are they all stocks / bonds? Or do they include RE, unicorns, Forex and whatever else the company can invest in? -does the company disclose their fee info? What would be typical if you can share? -is it safe to say UL is a better investment vehicle for high income earners instead of insurance? It's like ROTH except it doesn't have income and contribution limit! -if I were to buy UL with little insurance portion (say $100k), but I find it with $50k at 1st, will my subsequent premium much lower? Thanks again! Henry

@Drew Carlyle

Hi Drew,

Thanks for sharing the loan info.  I will need to establish those relationship if I want to get into the bigger boy's league.  :)

Is the property in TX?  The property tax rate seems low ($615x12 / $730,000 = 1%) but I don't know your city tax rate.  

Do you know the CAP they are selling at (9.37%?) compare to local CAP? Or are they using the proforma CAP rate? What kind of defer maintenance do you need to spend?

Thanks.

Henry

Hi Drew, Not sure where the property is located, but is there property tax for the unit? Also, where are you getting commercial financing with 15% no cash down @ 20 yrs term? I'd like to learn more on that! Interested of reading what feedbacks you will get on BP. Henry

Do you have enough cash reserves to keep food on the table if your wife and you don't have any business for the next few months? How long have you own your business and how steady can you project your income level? Do you have any back up plan if your business doesn't succeed? I suggest you evaluate your personal situation and business situation, then discuss with your wife to come up with a plan. Instead of paying off the loan or investing, it may make sense to have some reserve, then invest some in RE and other area. Good luck! Henry

@Vincent Park

Have you decided where you want to invest?  Or will you be deciding based on your criteria?  Do you have an end goal like # of units or total amount / return?  Before you buy, think about what you want to get out of the investment.  As @Jay Hinrichs said, it may not be the time to get cash flow and appreciation play now so you may need to go the non-turnkey route if that's what you're looking for.

When I started looking into Memphis, I first found MI online and attended their event and reviewed their property proforma info.  After analyzing quite a few properties, I decided not to invest with them.  Other than the potential appraisal issue, I didn't like the return when I plug in with my own assumptions...

I have not worked with Norada or JWB before so I can't comment on them.

By the way, I think minimum down payment is 20% for investor loan.  You get slightly better interest rate if you put down 25%.  Closing cost varies because each state / city has different property tax rate and insurance premium - but I think people use roughly 4% based on $100K purchase price.

Good luck!

Henry

Didn't think it can be this confusing but I was wrong.

found this link - US News - Tax Implications for Converting a Primary Residence to Rental Property

@Jill H.

Turnkey providers usually bundle up with a few services together - rehab property with a tenant in place and a management company to take care of tenant and the house.  Unless you have control over the price of the area / market, the price of the property will likely be sold based on the comparable houses in the neighborhood.  If the buyer is financing the purchase, either the turnkey provider or the buyer will have to come up with the $ difference if the property doesn't appraise to the selling price.  

With a tenant in place the investor is saving a tenant placement fee (say 1/2 month of rent - all depends on the market).  The house isn't recently rehabbed and you are not the property manager so unless there is value to be had and I have good local knowledge or a trusted property manager ready, I would think twice before buying.  IMO, turnkey business is to make RE investing easier for busy people so they have added value before / during / after the purchase.  You may have a good chance market / sell it to a turnkey providers for their clients instead of a turnkey buyer.

@Account Closed

@Account Closed

I'm not a tax accountant so definitely talk to a knowledgeable one before you make a final decision.  

This is simplified but from my understanding --

Your cost basis = your purchased price - depreciation = $190K - $8K = $182K

Your selling amount = your selling price - your selling cost (realtor commission, etc) = $140K - 10% est($140 x 10% = $14K) = $126K

Your gain / loss is based on your selling price - your cost basis =  $126K - $182K = loss of ($56K)

- Your depreciation amount of $8K seems high if based on your $70K value to depreciate.  My understanding is that you take the "improvement" (meaning - exclude the land portion) part of your property and depreciate over 27.5 years.  

Google their name. Check better business bureau. Ask for references so you can talk to / email for info. Check their deals to see if the prices are good for you. Personally I think it's important to meet them in person. Maybe I'm old school? Or maybe I just want to see how this person / people interact with others instead just email / call.