All Forum Posts by: N/A N/A

I'm in Japan, where I've gathered a group of Japanese investors interested in US real estate. My pitch has been to buy REOs or other distressed properties cheaply for cash and hold them as rentals until prices rise again, refinancing along the way for further purchases.

It seems an LLC is the best business structure? Possibly with further LLCs to hold properties? I've read plenty about this but wonder if the foreign investor part complicates things.

I've had good reactions to the idea of a four year expansion period, with no payouts to investors and then take stock at the end of four years. Profits would be split 50/50 at the point where it seemed sensible to take money out of the company. The goal would be to create a company which paid a solid income to the investors and to me long term. Is 50/50 generally condidered acceptable or am I being greedy? How about drawing a salary during the early period, any opinions?

I'd be grateful for any insights or advice both about the real estate side or the international investor and business structure side.

Thanks

Jan Watson

Thanks for the advice and kind offers. I would be very interested in any Nashville information or contacts you have.

Thank you very much for the replies.

I don't have the experience necessary to walk into this and we are all (me and the investors) aware of this. My arguments again may sound cocky but I'm not cocky, just trying to convince investors that opportunities exist and trying to believe in my ability to exploit those opportunities intelligently.

1. My plan is Nashville (I'd love to hear any insights on Nashville good or bad) largely because my wife is from there and has family connections in several useful areas.

2. I envisage doing everything through experienced professionals (who I find through personal connections) and paying well for it even in the early stages. Even better, I would hope as much as possible to partner up with experienced investors who I can offer something useful to, again people I hope to meet through family connections. I think all my reading qualifies me to know who to listen to and work with but not to do it myself yet.

3. I'm not promising my investors any instant riches and they don't really care too much about that. I'm telling them something like 'no one knows where the market is going but I can very carefully position us to own a lot of self-supporting real estate and wait for the recovery. If that takes ten years, then it'll be a long wait but I'll protect the investment for that long and build it slowly so the pay-off will be all the greater in the end'.

4. I will start very slowly, like one house, and learn from that before moving on. I will have enough money to support myself for at least a year so I'm not making decisions based on instant needs.

Again, any comments gratefully received. Especially any insights on Nashville and on the idea of partnering with experienced people would be very useful.

Also, what would you say are the greatest dangers to me (keen but green) in this market?

Thank you again.

Jan

I've been reading lots for a couple of years. I'm abroad so have a good excuse for not investing yet.

I have met a group of doctors who are interested in US real estate investing. This gives me the opportunity to begin investing with a large amount of cash. I need to convince them of the specifics of my plan and would be grateful for comments and criticisms from the experts on this forum to improve my pitch.

My basic plan outline is buy decent neighborhood SFHs from banks for cash while the deals last in this buyers market, then refinance with local bank as soon as possible (maybe a year) and buy more rentals and repeat while prices stay low. All deals will cashflow because of low buying price. I will sell houses when price recovers (which could be a long time) and move to commercial investing. All this will be done in one large city with local expert help from realtors, lawyers and so on.

I'm sure that sounds over-confident from newbie but this is my pitch to the investors so it should, right?

So, what are the objections you would raise as investor?
Is this most efficient use of a bunch of cash in current situation?

Thanks for reading.

Jan Watson