All Forum Posts by: John Corey

Aaron, Similar to Taylor, focus on your strengths. Build out from those areas where you have the greatest confidence. A beachhead,

Use your current industry connections to build out your network. They might become suppliers to you later, they could be investors or partners or they could be a bridge to other contacts.

The better you network, the better your day job will go and your investing future.

Happy to contribute so reach out with questions and other ideas.

Duke, this really feels like something a tax attorney should advise on when they understand your full objectives. It will be a custom solution that is tailored to your needs. 

Commercial finance is very difference than residential finance. Speak with a commercial broker so you know if you will ever be able to refinance. Make no assumptions based on residential. And the loan will be heavily tied to the tenant's lease.

Focus on seller financing. Rather than they get a pile of cash from you, you agree a down payment and they carry the balance for an interest rate you are happy with.

What about the other units in the building? Who are the owners? What is the tenant mix? It will impact the value of your unit going forward.

There will be a few issues. Sort them before you buy. It could be too late after you buy.

What is the tax treaty between the USA and Norway? How will things like depreciation be handled? If you depreciate in the USA and the Norwegian tax system does not recognise it as a valid deduction, you could be paying tax in your home country. I know from personal experience given the USA and UK tax code does not line up on this specific topic.

Second, you might want an C-corp rather than a pass through entity (S-corp or LLC). Similar logic. Where does the income and capital gains land.

Third, you need to think about credit and what your long term strategy is all about. Are you likely to move? If not, what about the currency exposure? If you are going to want to bring the gains back to Krona, you need to think about how much the FX rate will move around. If the property appreciates by 10% yet the FX rate shows the Dollar weakening, you could still be looking at a paper loss. Real estate is a bad way to speculate on a currency. Better to take a long term view and reduce the frequency you might need to move funds one way or the other. Can you operate a bank account in your home country which allows you to hold USD? If so, you can reduce the frequency of FX transfers even when you choose to bring the funds home. Or, operate a USD account in the USA and leave the funds in the USA.

After you have your strategy for how you will hold the assets, then you can worry about which registrations you need to sort for yourself personally vs the business entity you are using.

AML is not hard to deal with if the funds are easy to verify. Just expect delays when you first move funds to the USA. Definitely consider moving the funds long before you need them.

It is a niche area. Some folks focus on this and do really well.

You really need to know your market. And you need to check carefully what is going on with the park if these are in a specific park. They will sometimes have rules to discourage investors. The park owner is competing with you.

Be careful about the past use. What sort of damage was there? Check for meth use (can of spray starch works I was told by a MH investor). Carefully check the demographic of the future buyers. Consider offering financing.

Correct? 

As a really crude, first estimate, it can work fine if you are consistently working in a specific market and price level. Rather than thinking something is correct, assume it is a rough estimate. When you find a lead that stacks up using the crude estimate, quickly switch to using a more detailed way to estimate. 

The key is triage. You want to quickly through out the dead end leads. Once you have a smaller list, you can invest more time. Then trim again. All of this before you walk through a property or invest a lot of time. 

It is an iterative process so reduce the risk you are chasing a dud. 

 Broadly speaking, I would agree that you could do better.

That said, there is a lot of friction to repositioning a portfolio. Either refinancing or selling and then buying. With the added tax implications, you might find that you will be better off with what you have rather than what it will cost you to find an alternative. It will come down to the numbers and being able to successfully execute the switch.

With 1031 exchanges or other techniques, you can deal with the hurdles. It will just depend on how much work and cost you want to endure to improve the cashflow. As long as you do not case yield to the point where you are not focusing on markets which are not going to perform (or are too hard to manage remotely), go for it. Let the numbers guide you. And figure out how long it will take to reposition the portfolio. 

The safest route is to keep what you have and add stuff which better fits the target going forward. Once you have locked down a few deals you can decide if you exit what you have or if you just blend the portfolio.

Good luck either way. Happy to respond to questions if you need to bounce ideas off of someone. As I am sure others would offer.

Your post triggered a memory I had of a Wall Street Journal article that sounds like what your mother was talking about. 

Here is a link to the article. No sure if you will need a subscription to read it. If you go, DM me and I can see what I can do to grant access. https://www.wsj.com/articles/the-new-storm-chasers-real-estate-disaster-investors-11564498767 

Cody,

Get online and look for REIA or Apartment Association meetings in the Pensacola FL area. So you are well versed where the investors hang out before you get there.

I would avoid a mentor until you get a read for the place. You can take some folks out for a coffee and figure out who is making it happen in the area. Charles sounds like he is close so you can poke him for where he networks.

Once you are dialed-in, you can then see what you need in terms of guidance. 

Your signature indicates you are a lender. No idea if you have a job sorted. If you are going to be a lender in the FL market, use the brokers and business development managers for the wholesale funding sources to tell you more about the local market. 

John,

Greg highlighted a lot of alternatives. 

Lenders have fixed criteria. Mostly around the things you highlighted. Assume you will need to build to the point where you can obtain conventional, institutional grade finance. Until they, you will need to focus on alternatives. 

Figure out what is wrong with your credit and your partner's credit. It might take some time to fix. Get working on it.