All Forum Posts by: John B.

 @Sam Dogen thanks for sharing your strategy. Out of curiosity, are you using the typical popular crowdfunding platforms for finding deals, or do you have direct relationships with sponsors and participate in more traditional "offline" syndicated deals?

@Lane Kawaoka are you effectively saying that you wouldn't recommend for a new investor to go into a full TK solution?

I've been looking at a few properties analysis on various TK websites and many times I see an inflated cashflow because expenses seem a bit lower (e.g. few seem to take into consideration long term capex expenses), without even counting the exit strategy (I read on a few threads on BP that people got burned when they wanted to sell their property they bought at retail value from the provider in one of these markets since they couldn't find a buyer. Still, if CF is positive, as a 10+ y long term investment it might still make sense?). Is that what you are referring to with "underwrite like a salesman" or is there more?

Even adjusting the expenses and make them higher (~50-60% rental), some opportunities still seem decent, especially if one allocates a smaller portion of his/her portfolio, for diversification so to speak.

Thanks

@Lane Kawaoka big fan of your website, and I have a question on what you just said.

Through my normal job, on a lucky year I'm able to save significantly more than 30k, so would you really recommend to go for passive syndication? I was under the impression that, for a small investor, with long term buy-and-hold rental residential you can get all 4 typical REI advantages assuming you buy right, whereas with the others tax advantages are much more limited and it's generally more for the short term. Am I wrong?

Maybe it's because the only "passive syndication" I've explored so far are the few trendy crowdfunding websites and I haven't been able to see what "good" syndicated opportunities actually mean?

Thank you.

Just started with REI, so this discussion is very interesting.

My current net worth is currently 100% in Vanguard mutual funds, spread across domestic, international, reits and bonds. As others have said, bogleheads.org is to stock investments what bp is to RE, so you should definitely skip a financial advisor and learn from there, it is really easy once you grasp the fundamentals.

Over the next couple years or so, I would like to start diversifying it and reaching a conservative 25% in RE while I learn what's to learn in this craft, and over the next decade moving to a 50/50 split.

Planning to go with buy-and-hold strategy.

@Alan Kahanu thank you! I've been doing that mental exercise for a while now and I think I'll be ready for prime time at some point soon, I mastered most of the math :)

Thanks again!

@Alan Kahanu inspiring reply!

It would be very useful for novices like me knowing what are your criterias for quick mental assessment in Indy, beyond the obvious ones that is. 

Regardless, thank you. 

@David Faulkner thank you for that, much appreciated. I will pick your brain one last time.

What is your opinion then on a "mixed" approach where you still hire a "hopefully trusted" property manager so that the investment can be mostly passive, but you buy in a market that is then likely to see above-inflation appreciation and rent increase over the years (e.g. CA)? That would cut your profits obviously compared to a full hands-on strategy like you said, but on the whole spectrum, would you consider that a risk-adjusted more profitable strategy than SP500 or not? And again, I'm not talking about full replacement of capital. My portfolio is currently 100% in stocks/bonds (all broad indexes), and I want to reach a point where I deploy ~40% of that (possibly entirely by new contributions since my income is not too bad and am able to save quite a bit) to REI, for diversification rather than chasing stellar yields.

@David Faulkner thanks for your reply, I definitely appreciate your brutal honesty.

As a wannabe investor currently in the bay area, where everything within driving distance has a rent-to-value of 0.4% or less, are you effectively saying that one is better to just forget about building rental income and really just stick to the stock market? It's really hard seeing how well people are doing with cashflow properties :(

Other assumptions:

- I have the funds to buy here in the Bay, although I don't want to gamble on further appreciation, I really like the idea of cash flow

- Other than building wealth, another main goal of buying an out of state property would indeed be diversification from the stock market, which is wise in my opinion considering the crazy run of the past 7 years

- I am aware there are other passive options such as investing in debt deals via crowdfunded portals, but those to me just seem a meat marketplace, plus you don't recoup any of the advantages that come with leverage, tax efficiency and building equity

Thanks

@Patrick Anibaldi

Thanks for your reply.

As a novice looking for his first turnkey deal out of state (living in CA bay area so impossible to do things locally) I'm reading a lot of material and would like to pull the trigger in a few months and Memphis is one of the most stable rent-to-value markets from what I'm reading. What would be a few examples of the "ton of risk" you're talking about? Also, don't want to hijack this thread, but I am not talking about pre-rehab, I would be buying a turnkey property rehabbed, after inspection, at appraisal value (since I don't know the market) in a B neighborhood.

Thanks!

Very fascinating thread, thanks for all the good replies.  

How would a novice go to find the most boring stable markets? Would something like looking at https://www.biggerpockets.com/renewsblog/2016-inve... be a good start? I'm particularly looking at the section "The Top 10 Markets for Strong Rent-to-Value Ratios", which would suggest areas such as Memphis and Indianapolis, where there seem to be some honest turnkey providers judging from other threads I've been reviewing here on the forum. 

Thanks