All Forum Posts by: Joe Daigle

I just read an article on the Wall Street Journal https://www.wsj.com/articles/i... stating the fact that investors have responded to rising interest rates by pulling money out of real estate funds in record quantities. As a matter of fact, nontraded REIT's, such as Starwood Capital Group and Blackstone , have paid out $3.7 billion in withdrawals in Q3 2022 - which is an alarming increase of 12 times from that same period in 2021 (Y-O-Y). Both of those companies have limited the amount of investor withdrawals . These withdrawal limits are triggered in order to prevent the fund from having to make forced sales.

However, even with pre-set withdrawal limits from these REIT companies, investors can continue to withdraw their money in the future, which has several negative effects on REITs:

1) It prevents REITS from buying properties or continue existing projects (in order to hold-on to cash reserves and pay back investors)  

2) If investors continue to withdraw money, this may lead to a downward spiral of selling assets if it can't gain the trust of its investors (i.e. the forced sales of its properties).   

2a) As a matter of fact, Blackstone has put up for sale its 49.9% interest in MGM Grand Las Vegas and Mandalay Bay Resort & Casino

Given the above news and with Zillow, Redfin and Opendoor closing down there iBuying departments, Is this another bellweather for dire commercial and residential economic conditions to come? 

Postcript: Personally, I couldn't be more elated with the above news as this opens-the-door (no pun intended) for the little guy to buy (both residential and commercial).

Hello!  

I am a buy-and-hold investor who is learning more about investing in notes.  I am interested in recommendations for online courses or books (or other sources of information) that people have found useful. 

I understand that notes is a business best learned by doing, but I am trying to lay a good foundation of knowledge as a starting point.

To date, I have read these books:

"Invest like a Bank" by Beaux Blast

" Little Green Book of Note Investing" by Fred Moskowitz

"Real Estate Note Investing" by Dave Van Horn

"Note Investing Made Easier" by Martin Saenz

"Invest in Debt" by Jimmy Napier

"Profiting from Non-performing Mortgage Notes" by Amed Hazel

I welcome any thoughts or recommendations that the group may have.   Thank you in advance. 

Best regards,

Charley

There are too many unknowns to give you an answer.

Personally, I lived in Las Vegas for five years and hate it. I only want to invest in places I believe in and that place is dark. If you have paid attention, Vegas has been losing water for a long time and will eventually run out. I expect that city to crash hard within 10 years.

I recently included a tidbit about the "10 for 12" in my weekly seller financing newsletter. It generated good responses and questions, which made me think to share the topic here:

Start with the assumption someone has a note which pays $1,000/mo. They need quick cash and agree to sell 12 payments for $10,000.

In the financial calculator it looks like this:

• You give $10,000 now
• You receive $1,000 for the next 12 months
• Your rate of return (IRR) is 35.07%

It doesn’t matter if the note payments are $1,000 per month or $1M/month, the return is always 35.07%.

Another use for the same concept:

Your landlord is always complaining about money. Your rent is $2,250 per month. You offer to pay 10 months' worth of rent upfront in exchange for living in the home for 12 months. Your savings? 35.07%.

A few variations:

• "11 for 12" = 16.38%
• "20 for 24" = 18.16%
• "5 for 6" = 65.66%