All Forum Posts by: Jason Powell

I had a tenant pass away in a unit a couple years ago. To make a very long story short, hot weather and 3 weeks made this a very smelly and messy affair. The 25 year veteran officer said "this isn't the worst I've ever seen, but its probably the 2nd worst". Salt on the wound is that the state of Oregon came in a ransacked the place to salvage anything of value and stuck me with the rest. 15 TONS of junk to remove on my dime. And inherited hoarder tenant (not gross hoarder, mostly magazines). I swear there was probably 10,000 pounds of adult magazines alone. You will get some wierd stories over the years if you want to "retire off real estate" if you want to self manage.

This isn't legally possible. 

If you're itching to get as much equity out as possible with lowest costs, there are 100% LTV HELOCs out there (at least ive done them in the past, prior to covid). Had to meet certain income and DTI thresholds. The total cost was $0, not even an appraisal fee. Loan term was 15 years I believe with option to lock into a fixed 15 year term at any time. That was through Key Bank. HELOCs often do not cost any money to obtain. Plus, don't have to pay interest when not in use. Thats along the lines of what I view as your best option.

I'm toying with the idea of paying off my primary and having a large HELOC to use opportunistically, with the intent to use for flips and/or BRRR. The #1 trepidation I have is the very slim odds that the bank says "give us all the money back from the HELOC that you've drawn", or less scary but still possible, close off unused credit line that I was relying on for renovations and carrying costs.

From those of you knowledgeable on the matter, how much of a risk do you perceive this is? If you didn't have the cash to pay this off entirely if the line was called, would you feel comfortable doing this?

For added context, I'm at the stage where not blowing up my financial life is far more important to me than that trying to achieve maximum gains.

Necessary medical, data centers, last mile distribution industrial. Those are probably all solid bets if you're looking for stability. Unfortunately the price reflects it. If you feel like things will be back to normal in 2022 and beyond, well capitalized (big reserve fund) hotels is an interesting play. All of these are only accessible to most people via the syndication model.

Primary res, rate and term refi, free desktop appraisal, no points, 2.99% 30 yr fixed. UWM via a broker. 

ok thanks @Michael Plaks fair enough. I am not a tax professional, but I've read the IRC sections of the code and that's the way I interpret it. I'm trying to evaluate the various ways that electing to aggregate could possibly come back to bite me. It's remarkably tough to process this info intelligently. 

@Michael Plaks Thanks. I read through this thread 3 times before posting here. With humility, I admit my tax IQ isn't high enough to keep up with you all on that thread. I was honestly more confused than enlightened. I am hopefully looking for a "yes", "no", or "yes, if you...."

I classify myself as a real estate professional and understand what that means. I own rentals directly. 

I invested in many syndication deals in 2019 that generated over 100k paper net losses. Can I write this off against earned income? Does the fact it is a syndication disallow me what is otherwise possible for privately held RE?

I made these investments thinking I could, and I know others that have, but my CPA is adamant that I cannot. Any insight much appreciated. It's the difference between owing 50k and getting 5k back.

@Account Closed couldn't disagree more. At least on point #1, which is the only area I have enough experience in to speak with confidence. Syndications are not at all like owning a stock. They are usually more analogous to personally owning a property, but without the ability to make decisions (even less liquidity than normal). This includes the depreciation tax benefits which flow through to the investor. In 2019 for example, I had a negative $100k that I could use to offset other income, even though my deals were doing well and providing real income. It's also provided an opportunity to shift some chips out of my local Portland market, which has become increasingly more hostile toward landlords over the years. Lots of benefits, but not right for most people to put a massive % of their net worth into for various reasons.

Grant runs a legitimate business and in my opinion is a smart guy. Crude and edgy, yes absolutely. Charges on the high side of fees and profit split with a lower pref, but within the realm of reason. He is able to because he has built a brand and marketing funnel. 

I have an advantaged perspective in this syndication industry and can say that the VAST majority of syndicators have paused distributions to stack cash. Most sophisticated investors want their syndicators to do this (I sure do). One scenario, they get paid a really big distribution in the summer if this all blows over. The other scenario, this ultimately saves the asset and protects from needing to do a capital call when investors may or may not be willing to part with cash right now. In most cases, this is the obvious prudent move.

The only asset types I'm seeing largely continue all or partial distributions are office buildings with distinctly high credit tenants with very little concern, or NNN leases with single tenants who are thriving right now.

The issue Jay brings up is, in my opinion, the fault of the investor not being educated. Lucky for them they are with Grant right now and not a highly leveraged newbie with a weak balance sheet.