All Forum Posts by: Levi T.

Quote from @Joe S.:

Quote from @Eric Fernwood:

We still find good passive income properties; we average closing five properties each month in 2022. However, good investment properties are always few and far between.

Only about 0.4% of all available properties meet our requirements. We find these properties using the data mining software we developed. The data mining software only selects properties that meet our target tenant pool segment's housing characteristics (property type, configuration, location, and rent range). All properties of interest must then pass a rigorous validation process, including estimated renovation cost and risk.

In 2017 we standardized almost all renovation components and costs. Due to standardization, we can quickly estimate renovation costs using software we developed. Knowing renovation cost enables us to make offers based on the probable total acquisition cost.

The entire process, from candidate property through validation and estimating renovation cost, is typically completed within 24 hours of the property coming on the market. Good properties usually go under contract within three days (it was less than 24 hours in Q1 2022). We usually only get about one out of every seven offers because we have to get the property at the right price and terms.

Our processes and software are the result of 15 years of continual process and software improvement. The two founders are engineers, and we approached real estate investing as an engineering problem. So, everything is a documented, repeatable process. The process we followed is illustrated below.

In short, our software and processes (still evolving) enable us to continue finding, closing, and renovating five or more properties each month.

 You said “we buy five properties a month”. Who is we? 5 properties a month whole lot of properties.

My company has the same style of setup, and software that tailored to our operating models for what we do. We picked up 160 in the last year. It’s a volume game, so you have to think and operate in that format vs “investing”.. I know a guy down in Texas that gobbles upwards of a thousand units per year by my math, and of course you have others like BlackRock doing tens of thousand units via other acquisition channels. 

@Tyler Dietrich If you’re buying property that is worth more than you paid for it, the appraiser cannot easily appraise it at market value, unless you do improvements, or wait for 6+ months. The appraiser needs a valid reason on what brings the property back to market value under the appraisal guidelines. This industry is more about knowing the mechanics and rules of appraisals, lending, taxes deprecation, and other processes to create value, more than anything else.

Fredericksburg is NoVA, 10% or $100 per year is common. Right now those prices are moving even faster. It’s been jumping by 20%+. The floor is around $1,800 in Fredericksburg for a 2/3BR townhouse/house. 

Talk to an attorney, they can look at the contract and give you some advice. In my younger years I bought a few houses to be built around the peak of the housing bubble. The big builder attempted to muscle me at the end of the build, but I hired an attorney for a few hundred, and they sorted it all our with something I never though about. The builder had never given us the HOA agreement to sign off on, which voided the contract under state law. I got all my money back, and was compensated very well for my loss. Don't just assume, hire an attorney, and let them advice you on what your options are.

Anything placed in a irrevocable trust means it's no longer yours, it becomes the property of the trust/beneficiary, and you can't take it back, borrow against it, or benefit from it, the very minute you place it into the trust. Thus why some use the recoverable, just incase they don't like their children's lifestyle later on, but then it becomes redundant as your revoking or amending your trust all the time, paying taxes on something you don't event own because you can revocable, etc.. You could just willed it into the trust on your death, which is really what you want at the end of the day right!

In my 20's I sold a tech company for millions, I could have put it into a trust for my kids, and almost did, but then I could have never used it to buy tens of millions worth of real estate, and thus refinance a few times, buy more stock, more real estate, and paying off a divorce almost a decade later, etc... If I die, things get rolling along when my will places everything I want into the trust. For now I control everything with on and offshore entities and insurance policies, which gives me all the personal benefit in my lifetime, and limits my risk.

You are too young to make any real moves on this front yet. I've been there, done that, in my late 20's. You are basically going to setup a revocable trust, and a irrevocable trust, plus a will. You die, it will cascade accordingly. Toss on a term life policy to wipe out debts, and that's about it. You start tossing any assets into the trust, you will be cutting your own hand off prematurely. If I had put my assets when I was in my 20s, into my trust for my children, I would have been 10x poorer today, and so would they in the end.

Most these attorneys have the common asset protection, but there are so many ways to protect stuff... It's truly unlimited, and it's better you learn the ends and outs as well. You can split entities between yourself and your children's trust, or offshore entities. You could easily isolate your stocks into an offshore entity, and put US based assets into other vehicles. The ultimate goal is to stay in control, and make the assets untouchable by anyone you don't want to touch it. 

C-Corp will just double tax, while a S-Corp/LLC will pass through. It does not change the rules on the tax, you would still pay it either way you go. You could always buy and borrow interest only vs flip if you wanted, but you can never exit. That is about a good as it gets.

Closed on this today.. Sub 200k, north of Dumfries. Think I’ll paint it.

Because banks operate off purchase price for loans. They normally won’t let you do purchase price plus closing cost. So you bake the closing close into the purchase price. That then allows the bank to let you borrow a percentage of the purchase price, and you have little or no out of pocket cost in terms of cash needed at closing.

You can A) have your agent adjust the commission to resolve the cost to you, B) have the buyer issue you credit. Normally the buyers agent is willing to go with option A, as it’s their client that made the offer.

I would recommend talking to Henley & Partners, they help with resident-by-investment, aka golden visa. It would help you focus cost, plus add a passport to your portfolio. Spain I think it’s currently €500k, while Greece is €250k, and and St Kitts and Nevis is €200.. I think Mexico was around $150k last I looked at buying. 

As mentioned, you won’t have the same buying power with banks as you do in the US. In the EU they basically run credit via bank deposits, their credit cards are more like debt cards. HSBC can help you get checking accounts setup in almost any country.

We are taxed on our world wide income in the US, but that’s not that big of deal, as we have treaties with other counties to help avoid double tax, and you can always setup up IBC in Cook Island, or St Kitts & Nevis, thus off shoring the income earned outside of the US, if you bring it home you will have to pay taxes on it. You will need a good CPA for all this, because the IRS loves people who have tax haven access.

Vacation homes are nice, but you won't find the same ROI you get here in the US, and houses can sit for a long time before selling. Personally I would stick with US vacation destinations before I would go after AirBnB in another country.