All Forum Posts by: Account Closed

Absolutely. The FASTEST shortcut to true wealth is canceling cable TV and disassociating from as much what does not matter, as fast as possible. 

I saw a case study on the internet and I'm just regurgitating what I saw in that case study as it was truly fascinating.  I'm no expert - not in any way, shape, or form. 

Ok, so some investors encountered a situation where a seller was just about fully leveraged on a $500k home ($300k 1st montage + $180k 2nd mortgage).  The guys owed the $180k get $0 if the first lien holder forecloses. 

So, the investor thought it was a no brainer for them to want to work out a deal. They figured they'd get in for $390k total, put $15k into it (which is all they ultimately put into it) and flip it really quick.  

The second lien holder said "piss off."  Why? No one knows...  

Then the investors got really creative. They worked out a scheme (in a legal sense) to essentially take the position of the first lien holder and foreclose on themselves. 

They got the first bank out of the way, and thanks to a private money investor, Billy Seller now OWED THEM $300k. Then, they had Billy Seller sell the property to a "sister company" subject to the $300k owed.  

The sister COMPANY promptly defaulted.

Due to the fact that it was a COMMERCIAL deal, foreclosure was lighting quick - 10 days. 

They foreclosed while the second lien holder scrambled to save the deal in the 11th hour. No dice. They lost. 

In the end, they sold the property after putting $15k into it for a $120,000 net profit if I recall correctly. 

It was the most creative deal I've ever heard of and figured I would share as this deal really opened my eyes to how really creative you can get in this space. 

Hello all,

I am struggling to find an attorney who will work with investors on creative real estate finance deals.  I've cold called attorneys and have been chewed out about anti equity skimming laws and / or being questioned about my maintaining an RE license or lack thereof.

Any help in tracking down an attorney would be appreciated.  Additionally, understanding WHY it's so hard for investors to find attorneys would be helpful as well. I'm baffled. 

Thanks! 

1. Ask him "what he needs?" Find out his investment criteria. Know more about his investment criteria than you do your own.
2. Go find him a deal.
3. Offer him the deal.
4. Never mention compensation - allow him to bring it up.

If he's a man of good character, he'll bring it up and offer you SOME sort of compensation for your time, and a project you can work on with him.  

Ultimately, MOST mentors are happy to mentor but in the back of their minds they want to know if the time invested in you, will translate to cash in their pockets or rent rolls on their books. 

The mentor / mentee relationship often result in JVs' / partnerships being done which is why most people capable of being mentors invest the time in the first place.  

/my two cents

Amazing thread.  Courageous post inasmuch as a lot people simply do not want to hear anything about a recession.  I'm chiming in my 2 cents here...

I like to fancy myself a "crack pot economist and economic tin foil hat wearer" but, I try to base my craziness on cold hard facts.  That said, the next recession will make the last one look like a walk in the park.

Each day we do NOT start the next recession, the worse it gets.  Here's why...

• Student loan bubble. HIGHER education is extremely overvalued.  
• Auto loan bubble.  Auto loan defaults are skyrocketing - particularly on used cars.
• Derivatives bubble.  I think we're at like a quadrillion now? That's crazy. 
• 70% Americans don't have $1,000 in cash for an emergency.
• The average household is $17,000 in debt. 
• The average person who has owned their home for 20+ years will has about $30,000 worth of equity in it.  
• Re-financings on homes reached record levels this decade and balloon payments on about 1.5 million homes will come due in about 15 months. THAT'S THE FIRST WAVE.  

We have not seen a confluence of events like this at any time during economic history - for ANY civilization.  In the case of the United States, booms and busts are perfunctory to living under a debt based fiat currency system that some may refer to as a Ponzi scheme.  

Any sequence of events can trigger all of these things to pop one after the other.  Or what if they pop simultaneously?  However, we all know that all of these things will end somehow. 

When I look at global debt, the dollar crisis, the RETIREMENT crisis seems to be the big pink elephant in the room no one wants to discuss, I sit up in my chair a bit more... 

Humans are literally dying out of the stock and real estate market and there are not enough humans who have the resources to replace them. 

There are going to be less people participating in 401k's - which has been the "secret" to the success of the stock market.  If money wasn't automatically taken from peoples paycheck for gambling in stocks with outlandish PE ratios today, and no real business in 2001, I doubt they'd sit down the weekend after pay day, shop for stocks, and place buy orders.  

So, the market relied on trillions of dollars automatically deducted from paychecks that won't be there to deduct anymore.

Furthermore, baby boomers were able to acquire and LEVERAGE debt. Baby boomers were able to start with a small SFR and allow that appreciate to a point where they could leverage it to buy a 4 or 8 unit building. No so for their kids and grandkids.

The average college grad will never qualify for a home under conventional terms. Let that sink in. Each year we are graduating MILLIONS of kids who will NEVER be able to qualify for a mortgage under conventional terms (solid credit, steady employment, 20% down).  

I was just reading an article where a freelancer was able to buy a $650,000 house after struggling to document income.   

This is not sustainable. There has to be a reset.  I hate to sound like a Debbie downer, but we will see a massive global recession at some point in time.  Don't get me started on the inevitability of dollars flowing back to shore which will in turn cause crazy inflation... The world is looking to "de-dollarize" as our dollar is backed by nothing more than the threat of force against oil producing countries who refuse to use it in trade. What happens to the dollar when we lose that leverage? 

China is playing a SUPER long game and has absolute and total global dominance as a part of it's 100 year plan... 

Must destroy to rebuild.  I'm nearing 40 and the most loving thing this country can do for my grandkids is to let this current system die and rebuild anew.  Based on sound money.

I've seen folks around the forums in search of "investor friendly" real estate agents and besides someone who sends you amazing deals to look at, what exactly do you look for in an "investor friendly" agent. What would be the antithesis of an "investor friendly" agent.  I'm asking as my wife is seriously considering pursuing her license to support our real estate investing business. Thanks!

 The more I learn about the economy, the more intriguing this all becomes.  Thinking about the pending retirement crisis is a deep enough rabbit hole.

I agree, never predict the timing of the economy... but It think it doesn't hurt to anticipate the cyclical nature of the economy staying, cyclical.

I agree, and disagree. Predicting the timing of another dip is a fools errand. Stating flatly that there will be another dip, is a bet you'd win 100% of the time if given infinite time for said dip to occur. 

We do live and exist in a fiat currency debt bubble and part of existing in a fiat currency debt bubble is the reality that booms and busts are perfunctory per design of the system.  We can't pinpoint timing, but under the current economic system, I'd bet my last dollar that there will be another bust (date unknown). No odds maker will touch that bet! lol. 

This specific topic fascinates me as guys in my area are unloading portfolios, sitting on cash, and waiting for the next dip. Some are doing 1031 exchanges into larger multi units, etc. But many are backing away from the SFR market.

Then, there are experienced guys like yourself who view their complacency as an opportunity to be greedy.  The thing is, you know exactly what you're doing, and they know exactly what they're doing.  That's the intriguing part. 

But Cassi made the strongest argument I've heard regarding not being "green" when it's time to buy the bottom.  That makes a LOT of sense. 

Hello all,

It seems like another RE dip is inevitable. None of us have magic crystal balls but I given the data coming out, from all angles, there will be another dip in the next 1-3 years. 

So for you experienced guys, my question is simple, how should new investors be operating RIGHT NOW? 

Let me add some context... I was on another small bloggers site and the options she laid out were as follows:

1. Gamble on appreciation.
2. Wholesale
3. Lend

The caveat to number 2 is that many seasoned investors (perhaps many of you) are turning down more and more deals that wholesalers are bringing to you, deals you would have snapped up 3 or 4 years ago. So, it seems to me that wholesalers are "fishing for suckers." 

But on the flip side I remember reading on this forum that some of you can care less about buying rentals at the top of a market.  I found that fascinating.

That being said, for you experienced guys, what would be your advice to folks who are simply house hacking at the moment?  If you don't have a ton of properties that are positively cash flowing, and you're simply house hacking, should you even consider acquiring rentals (especially using leverage) at this stage of the game?

Interested in hearing you guys' thoughts!

I'm as green as they come as it relates to real estate investing, but I'm am absolute expert at starting and running businesses into the ground.

However, over the years, I've trained into my muscle memory a set of skills that make it VERY difficult for me to continue to blow wads of cash on any "idea."  

This is for those of you who are wondering if this is a good idea, should you do it, etc.

The Lean Co-Living Start-Up

I "googled" "co-living" for the first time today as I'd never heard of this term before.  I'm going to put together a plan to relatively quickly validate / or invalidate this business model.

I'll wait until after the Holidays as at the moment, people are doing more defaulting on mortgages and missing rent payments vs. looking to plunk down cash on a new place.

Plan

Sell the concept as if it existed in my target market. I'll need photos of beautifully lit, and well staged home.  No details spared as it relates to presentation. 

I'd then build a landing page, hammering away at the features, benefits, and mock pricing.  I'd play with a mix of prices and features and do A/B testing. 

Example; lets say I own mycolivingsite.com - I can set up my A/B testing so that when I receive 100 visitors, 50 can see one version and enter one funnel, the other 50 can see another version and potentially enter a completely different funnel.  

Just off the top of my head, a test I may want to run is to offer all the most amazing features I can think of at lets say $1,000 / month. Then, I offer LESS features for $1,000 / month.   Then, I may want to take the EXACT same set of features and offer them at $1,000 and $1,200 respectively.  

There'll be clear calls to action and they'll fill out a form after clicking "Save Me A Room." 

I'll gather name, e-mail, phone numbers of those interested in this amazing place in a great location.  Then, I'd get on the phone with them and talk try to learn as much about them as possible (record calls, take notes). I would let them know of my intentions, "hey, I'm test marketing this concept, I just wanna get it right..."

At the end of all this, I know a LOT about them, and I'll know EXACTLY what the plurality wants, where they want it, how much they want to pay, what's most important, what's least important, etc.  

This allows me to precisely optimize a co-living space for that market.  I can spend $300-$500 (graphics, landing page, facebook ads) and come back with qualitative and quantitative data that says "bad idea!" Big deal, I lost $300-$500 instead of losing a down payment, rehab costs, staging costs, and on and on.  

Again, if the data comes back positive, then I've got as close to as a fail proof start up as you can get.  Additionally, I have customers WAITING for me to deliver the solution vs. building the "solution" (which will likely be incorrect) and TRYING to sell it.  

Wrapping Up

I love this model because you can essentially make a margin on your maintenance costs. If a magical real estate fairy came down and asked all you landlords "wanna have someone come and clean your tenant occupied rentals for free every week?" You'd say 100x yes!!! Because when they exit, your costs to get it back on market, and occupy that unit are much lower, and you'd get it rented much faster.  So, I view this model as a way to get people to pay for that reality.