All Forum Posts by: Josh Calcanis

I wouldn't necessarily give up on the LA property. I forget which one, but there was a podcast that had an investor that lived in LA that was creative with his financing/units and ended up with close to 20 units. I feel in a city like LA or Seattle (where I am currently) you have to spend a little more time than in a city like Orlando (where my units are) purely because of the market. If you're really analyzing 3 deals a day and not just looking specific properties you'd like to live in, then you should run into something that cash flows (even though it might be a very small amount or breakeven). So to your first question, I think it's completely doable. Search on here for some locals in LA and ask them how they did it.

As for investing out of state... Is there a particular reason you picked those states other than proximity?

I lived in LA for 2 years and starting doing my research on my own, moved to Seattle for work and finally decided to invest in an area I knew over in Florida. If you're going to invest out of state, I personally don't think it is all about how close it is, but more about how well you know the area and the market. I knew the Central Florida area much better than anywhere else and my biggest problem was finding a decent management company. So if you do choose out of state, I'd say make sure you know the area well and find a good management company. Also something you can find here. Good luck!

@Qingqing Gan you got it. They are, but Tim has helped me with the two properties in Florida.

@Jennifer King No. I got a few other names and the one I went with was Tim Proctor over at proctor company in Bellevue.

BP,

I've currently got two deals under my belt both performing close to my analysis. I've been fortunate so far and have only missed the mark are some repairs (HVAC was a fun one). So far I've been using Taxes, Insurance, Water, Trash, Power, Management fees, Vacancy, HOA, and Gas as my expense metrics. Are there other things like repair and cap ex I should be adding in? If so how/where do I put that in the analysis?

With that said, I only have a SFH and a Triplex at the moment, but would like to work my way into the commercial side. Outside of how a lender values a 5+ unit vs a residential, are there different ways to analyze a commercial property? I.E. different expenses, etc.

@Thomas S. could you expand a little bit on what you mean by the equity surpassing the mortgage rate. Justin mentioned the interest rate being lower than the ROI on the property. Do you mean the cash flow or equity in the property? Also when I've analyzed my properites, I've always added the DP in and then calculated the rest of the information based off the mortgage.

Thanks @Justin Holley and @Thomas

Great information.

So what you're borrowing against is what you've paid into the policy NOT the value correct?

@Brian Mathews Thanks! Really haven't explored it as an investment option.

@Jerry W. it was the first time I've heard of it and obviously there is a reason. Thanks for the input.

BP,

I was speaking with a friend of mine who recently began working for a financial group. She mentioned that she had a few clients that had use their overfunded life insurance policy as financing for a deal. Basically, it's a conventional loan with a lender, but they use the policy as collateral.

She wasn't too familiar with the matter and was going to try to dig up some answers. To be fair, she just started and wants me to begin working through her (purchase life insurance).

I wanted to see if anyone on here is familiar with a strategy like this. What are the pros and cons to something like this? Is this even possible?

Thanks for the advice. Reading through this proves I definitely need a little more help.

I reached out to a fellow investor in Florida, who works closely with an attorney familiar with these matters. I'll be reach out this week.

Thanks for the insight @Chris Mason

That makes a lot of sense.