All Forum Posts by: Joe Kling

Complacency, and ignoring of details.  It takes resolve to stay on top of things daily, and to do the little things to stay on top of tenants, maintenence, and cash flow.   As with every real estate owner,  little issues can easily creep into big issues if unchecked and ignored.  As an agent, I frequently work with landlords that want to sell because they have let too much go unchecked for too long, and they give up when they see how their property, and quality of tenants, have deteriorated.  It keeps me on my toes with my own investments...I don't ever want to be in the same boat.  

Hello,

I have been lending to local small companies who rehab and flip houses.

I wanted to know if there are any resources or advice on how to vet deals,and how to structure them?  I realize every deal is different.

I've also run across several different scenarios and would like your opinion:

1. lending to a small lending company where they handle all interactions with the rehabber and I do not get a deed of trust and monthly interest

2. lending to another smaller company (again they handle the entire rehab), I do get deed of trust, higher interest, but interest is paid out at the sale of the house

3. a local private placement fund (lowest interest of the 3).

In cases 1-2, I get to see the property, case 3 not so much. These are generally 9-12 mo deals.

I have good relationships with the above and successfully participated in a few of these deals, so I haven't learned much about what could go wrong.

How do you gauge risk of the above scenerios? How important is it to actually touch and look at the property you are investing in? Should I be speaking with the actual company doing the rehabbing? what are the risks in these scenarios?  

Many thanks for your advice.

Sanjay

Please help clear my mind from my skewed point of view of how REI works.

My goal is to buy a multiplex apartment building and live in one of the units. 

So I'm guessing that I'd have to put something like $50,000 down for that. That might take me 3 to 5 years to save. So I got the property, and I'm cash flowing a few hundred dollars a month. That's it?!? All that hard work for a few hundred dollars of "free" money? 

How do people make millions of dollars in passive income? Either they have to come from a family with money to bring big down payments to the table, or they have to save and save and live like a hobo for 30 years to build up enough cash flow. 

Convince me otherwise. I probably sound really stupid to a lot of you, but this is the beginner's forum, after all. 

@Joe Kling You are simply rationalizing, man. Why is a licensed wholesaler not a designation...unaware of another industry that uses unregulated wholesalers....

Ok, look at it the other way round then.

Are wholesalers driving the prices down? Of course they aren't. They add a mark up to reassign. Therefore, by definition they are (helping) driving the market up.