All Forum Posts by: Jay Hinrichs

@Rodney Walker @Bryan Hancock

I have had success with raising capital from CF sources here on the west coast. from what I have seen they are looking at the operator as hard as the asset if not harder... If you have a going concern can show good track record that would be critical in my mind.

We have done I think 5 deals so far all were debt plays and all were small by RE standards. However they funded each deal within a weeks time and some in one day. So I liked that aspect.

I personally think the CF sites that choose wisely at the start up here and have track record and success are going to do very well.

on the Admin side for the crowdfunder if will really come down to being very high tech there is lots of work Admin wise when you have a bunch of small investors in on one deal..

So far I like it

@Will Barnard

@Bill Gulley

@Karen Margrave

Will,

what your describing is exactly what 95% of HML do in CA. and its perfectly legal to do.. YOur Fractionalizing the Beneficial interest in the Deed of Trust. And you can bring new investors in any time you wish by simply doing an assignment of DT as to the % ownership of the investor your paying off and the new one your bringing in.

In most states this is not legal in Mortgages and DTs in Oregon were I am at it is a huge no no and one would need to step into the reg D arena or there is also a state exemption called a RE paper offering that is specific to Oregon and Oregon residents. ( I have done one of those)

IN CA the reality is your talking about much bigger dollars in the major metro areas for real estate and loans. compared to much of the middle of the country.

So it would be very difficult for CA investors to use the one investor one note process. When your deals are 500 to 1mil that tends to cut the wheat from the caff and investor are much more comfortable putting 50k in to 10 deals.

Aging myself but when I ran my HML company in Oakland back in the late 80's to 90's we had about 300 investors and rarely would one take a whole beneficial interest in a loan.. our average loans in the SF bay area even back then were pushing 300 to 500k so every loan we ever did had multiple benes. And of course we ran this quite legally under my CA RE brokers license. Just like your doing today. .What Will is doing is perfectly legal as long as a broker arranges the deal and use's the disclosure forms provided by the DRE to the investors. YOu can find them right on line.

I keep my CA brokers license active for the few deals I do in CA. it comes in handy at times.

Karen no worries doing multi bene just make sure a RE broker does your disclosures for you.

@Joseph R.

Not absolutely sure in your state, however in most states I work in. If you buy a TAX DEED it does extinguish everything accept IRS tax liens ( IRS has a redemption period however rarely will they step in)

In TAX certificate states. I would think for you to take ownership you would need to Quiet title. and the act of quieting title will extinguish all Liens and encumbrances..

Jon is correct as well first in line is first in time.. or we used to call it a race to the recorders office

@Dawn Anastasi

Dawn those are just awesome numbers.. 1595 rent out of a 88k homes that for us west coast people is mind boggling. we rent 350k homes for 1700.

rents have a ceiling here. like 1.5 mil sfr's will rent for 5k a month or so.

its not exponential on property value vis a vi rent.

No wonder you mid western investors have all the dough :)

@Dawn Anastasi

Geez Oh pete you guys are so spoiled 2.7% 35k for a 1k rent.

We have the .50% rule here on the west coast.

I suppose the only benefit or difference is that your homes probably are worth what they are worth and really never move in value.

West coast investors fully expect something they buy today to be worth 10 to 50% more in 5 years and in many markets that is what will happen

Any one have any success with this. One of my turn key clients was using it, but the company just said they would stop writing policies effective Post haste

for me personally I could never figure out how they could make it. if they were working mid west and low end markets

@Account Closed

Out here in Oregon the Green would be growing Weed.. Now you talk about a landlords worst nightmare.. you get someone moving in and making your house into a grow house. the house can be destroyed in no time.

@Account Closed @Brian Gibbons

Brian not sure what it cost to put a child through college in CA now.. I put my daughter threw UC Davis 1998 to 2002 and it cost me 50k all in class's room and board. she also interned and made spending money. And I am proud to say I paid for her education so she has no debt to worry about. ( Plus I bought her a car when she graduated, if she hit a certain GPA that was the deal)

being raised in the Napa valley she thought about viticulture and also pre med. but at the end of the day she got a degree in Managerial economics. graduated top of her class ( say proud dad) and in one of the worst hiring environments ever 2002 ( post 911) got offers from Microsoft and Intel. She chose Intel and has been there for 12 years now and is one step below controller..

If there is anything that I learned from that experience is if your child can put the time and effort in and get the GPA the top companies will hire them. If your child goes through school and comes out at 3.0 or lower they have a tough time when hiring is like it was

@Brian Bower

@Bill Jacobsen

All the mid west to deep south investors or rust belt would no way touch this deal. but this is what we have here on the West coast. I sold a duplex in N Portland last month for 379k rents were 1000 and 1200. different world here.

Ergo people push off to the mid west were you would buy the same thing your describing for 100k not 250k same rents.

It just is what it is. when you have the 2nd best land lord market in the country second only to San Jose CA this is what you get.

LOW returns but you get the returns and you can cherry pick tenants. Section 8 what is that.. No one even knows what it is in our market because it for all intense and purposes does not exist.

different world. thanks for sharing.

@Account Closed

I had two business partners in my Silverado funding days. One owned a garbage company in Norcal and sold to waste management. The other a serial entrepreneur who ran the largest wine concern in the US and took it public.

One owned everything in cash period and had no debt the serial entrepreneur had all sorts of deals going and believed in debt and financing but that I am sure because of his background running public companies.

In our business we borrowed from banks ( credit facilities) to loan to those that needed MHL's and we made the spread which as you know is pretty nice, but even those facilities required us to have 20% of our own capital in each loan.

So the capital structure of each HML I made was our strip of capital ( cash) at 20% banks at 80% but with the bank never being more than 56% of appraised value. if the loans were higher LTV we needed more cash.

So at the end of the day I think it depends on what your doing how big you are and of course your deal flow..

As I move forward loaning money I require CASH into each deal I do with very few exceptions.

So combination of cash and OPM seems to be the right formula.. Investors and lenders want to deal with those that offer to put their own skin in.. The day of your great idea and deal and our capital is much tougher unless its friends and family