All Forum Posts by: JD Martin

Depends on what's normal in your market. In my market those are generally low C and below housing. Everyone wants CHA these days where I am. 

Retired means different things to different people, I guess. For me retired means I don't have to work anymore - I could just hang around and live reasonably well off my past efforts. I consider myself retired these days, as I retired from my career (public executive management) 4 years ago. But I still do some consulting work for my old employer, teach a little on the side, and of course watch over my rentals so from the point of view of just sitting on the beach I guess I'm not retired. But who would want to sit around and do nothing anyway?

The numbers and the situation doesn't make any sense. They bought at $300k 2 years ago in the hottest town in NC. They've been paying on the note for 2 years. They owe $298k, which according to you is essentially market value. So there's been no appreciation on this townhouse for the last 2 years? If it was just keeping up with inflation, you should have about $10-15k in equity in it right off the bat since market value ought to be $310-315 with nothing but CPI adjustments. Then you are going to lose several hundred dollars a month on rent self-managing. And there's no guarantee they can even buy another home, so you're really counting chickens with the real estate commission deal.

This sounds like a very bad idea to me. I think you are overestimating how "hot" this market is, if there's been no growth on value of an essentially brand new townhouse in 2 years. 

Honestly, this sounds like a bankruptcy waiting to happen based on your post. You are essentially looking to finance what is likely D/F properties with maximum leverage and what sounds like no capex, vacancy, professional management, maintenance or taxes built into your model. I agree with Chris, your best option is probably going to try to create either a syndicate of like-minded investors willing to pony up so you can own the properties outright or find a HML that will float you enough cash to get them running and then try to refinance into more traditional financing, probably with the entire portfolio since your individual assets will be too low to go door to door.

How many houses have you done this with so far? What does your current portfolio look like? 

You made a mistake by not having your representative - property manager or someone else - just meet them there the first time, especially knowing you are up against a close deadline, instead of relying on good faith and a lock box to facilitate the inspection. So yeah, you're going to have to live with it or walk with their deposit. 

How much is the condo? How much is fair market rent for a similar condo in the area? You haven't provided enough info to even determine if this will make a good rental property or not. If the condo costs $400k and rents are $1000/month, it doesn't make any difference where you get the money, you'd be buying an albatross. 

What you're thinking of doing can make sense, but the property has to make sense from either a long-term/short-term rental after your daughter graduates, has extremely high equity growth potential, or the losses to you over 4 years (or 6, for Masters) are less than if you just paid for her to live on campus or rent another place. 

There's no reason to take the lolly columns out unless you're trying to figure out how to open up the basement. You do need to figure out the water they're sitting in, as the bottoms are going to rot off of them over time. 

I just posted on your other thread. Why on earth would you want to waste your time on wholesaling if you're ready/able and have experience with syndications? Good wholesaling - and 99% of it and the operators out there are crap - takes a lot of time and hustle. You're not going to do both of these here so you should pick a focus. Yes, you are severely underestimating how much time & effort it will take to make any kind of reasonable money wholesaling, because the few who do it well do it all the time, non-stop, build a strong list of buyers, and put out a lot of fires and navigate a lot of mine fields to make sure deals close. 

 I wouldn't worry too much about improving your competitive advantage before your first deal. You say you are good at financial modeling but lousy at property management (I'm paraphrasing here). Do as @Chris Seveney says and find that team member/s that's going to mitigate your weakness, and turn out a solid return for your investors, and your competitive advantage will be "Shawn's REITs provide a solid return, every year, without cap calls and losing our principal". If you've seen the damage in the syndication market lately, that will be a hell of a competitive advantage by itself. 

I don't think this is an area where you're going to fake it till you make it, unless you want to be a future BP post about a good talker who burned through all his LP's money. Put together the right deal and your reputation is going to precede you. Good luck!

I would say it's a combination of SSI disability, VA disability, caregiver laws (for example in my state custodial parents of children on medicaid can be on it too), etc.