All Forum Posts by: Jay Hinrichs

@Dawn Anastasi

Same issues they moved out of state and now are absentee landlords and the property has not performed no getting around that.

My point though was I have to hand it for them for not walking and honoring their obligation when they signed their promissory note.. So many in their same situation just chucked it in and RIPPED rents and defaulted as we know that scenario is not in dispute.

@Dawn Anastasi

typical out of area experiences.. this one is one of the few that did not go into default.. have to hand it to this investor to keep his mortgage up under the circumstance.. Most in his position walked.

@John Wang

There is the rub any decent park on the west coast will NEVER sell for a 10 cap your wasting your time. the west coast is not the mid west or deep south were parks are Ghetto settings ( 15 caps)... Parks on the west coast even older single wide white trash ones are cash cows.

You may luck into one out in the boonies like mid WA or Aberdeen type setting but no way on the I 5 corridor.

I sold my Vancouver park 24 months ago at a 5.5Cap and it was a mix of single and doubles. I sold to Taylor group out of SF and they own about 100 of these type of parks and they paid cash on the barrel head.

Its all about collecting rent.. In the high cap rate parks you will have defaults on the low cap rate west coast you can bank the rents just like a security. the only time I had a default was because of death of tenant then the relatives would step in and pay.

@Johnson H.

Much like rent control in Manhatton one of my associates has a co op on about 54th and his rent control is 2500 a month.. fair market would be 15k a month.. Berkeley has the same issues. AS well as mobile home parks in CA.

@Will Barnard

Well since I am new to BP I am 6 years behind this thread. At the time of Katrina I was the largest HML in the state of MS. I also bought 11 Go zone SFR's and it was one of the best tax plays I ever made.. Along with buying an airplane and writing off 90% of it year one.. Between those 2 moves I paid very little tax.. But I also saw a ton of riff raff come into the go zone.. And all manner of folks trying to skate around the rules. In addition I got audited by the IRS the first year I took the Go zone bonus depreciation. Many unscrupulous dudes were selling these to anyone when In fact to take the Go Zone bonus deprecation the investment had to be part of your trade and bizz that you were basically full time engaged in.. So a doctor buying a gozone home got it disqualified.. Some like me who was a lender builder developer RE broker I easily qualified and my audit took only 30 minutes.

In addition you had to BUY NEW construction existing houses did not qualify I had a friend from Oregon buy a used home and said he was going to take the deprecation I had to save him he cancelled the deal but the guy selling it to him told him NP

Caveot Emptar with all these things.

@Ann Bellamy

@Kirsten Walstedt

As Ann said in much greater detail, if you follow that road map you will be in good shape.. and I can't stress enough her comment about only making 1ST position loans... Junior loans are very risky and Trillions have been lost in the last 5 years with wiped out Juniors. Its really great time to be a lender values settled down.. One last thing be very conservative on LTV.. Don't let anyone talk to you into 80% or anything like that.. My bar is 65% with 50 to 60% much more comfortable. And you can get those LTV's if your competitive on your rates.

@Karen Margrave

Thanks Karen, AS you stated Kirsten may want to start with reputable Hard money lender in her city. Just google for HML almost everyone will have a tab on their website about investing with them.. either in their 506 offering or individual TDs.

Then you will want to check them out with the state regulating authorities its usually on line and you can see if there are any issues. And also get some referrals from them of other investors, they may share a few of those.

Then just use common sense start out as close to home as you can.. You know your own market.. Its easy to establish values through a decent RE agent you can pay for an independent BPO usually 100 buckaroos or so.

And with your first deal maybe spend 300 bucks or so having a Local RE attorney review and approve.

JLH

@Ann Watkins

My goal is to own 2 my personal residence and another condo in Vegas.

My next goal is to get rid of all my rentals. I just sold my big portfolio 350 homes. and am systematically selling the rest of my rentals. as one comes vacant it gets turn over and sold. In another few years I will have no rentals and Have all my funds in first trust deeds.. were they belong.. Far to much work having rentals.

now the exception is if you can buy CA rentals or west coast.. There it can be worth the pain as they can double in value in a short time. As we have seen many times in the past. Of coursed they can crash as well but what is certain is mid west and most of the south And mainstream Texas other than Austin prices just trundle and really don't go anywhere over a 5 or 10 year period so really what's the points.. Better in my mind to lend money than own.

Just like the hedge funds are starting to do now with their loan programs.

Devils advocate and food for thought

@Stephen Masek

your speaking from a west coast perspective.. spend one day in Jackson MS Memphis TN Bham Atlanta and many other southern town.. New Orleans. etc etc. . You have no clue until you have seen it first hand.

Wisconsin is the first state to crack down on Welfare.

However the reality this is a multi generational issue... And the fact is its a single mother with 1 to 6 kids or more with as many baby daddy's ..

@Leila Moose

@Brian Burke

What Brian said :)