All Forum Posts by: Levi T.

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.

@Shiva Bhaskar It’s down to the three fundamentals: Entry Price, Time Horizon, Cost Management.

You can easily enter a market by having to high of a entry price to exit at your desired time horizon, just as much as one could mismanage cost, and end up with the same result. 

We see rents are up by as much as 40% in the DC sub market this year. Surprise AZ (just out side of Phoenix) has seen as 250% population growth in the last year. Real estate market has been the clear winner in this pandemic. 

A listing agent’s proforma is never realistic, never ever, ever!! Selling pipe dreams to anyone who will believe it. I recommend developing your own current proforma along side a stabilized/leveled/future/whatever you want to call it, proforma.

Look at expenses, and see if it’s comparable to what you think it should cost. Write in discounts for capex, non leases, no deposit, property conditions. The less information and the more unprofessional the seller is, the deeper you write the discounts.. Do you research and see if those cost are real, such as bring the vacancy rates to 10%, if they are below that. Check rental listings for market rents, high medium and low. Add in management cost. Get insurance quotes based on your max purchase price as it can go up as much as 100% sometime, loan terms, etc. Time you get your proforma finished, you should know the bare minimum to keep the operation going as is, or above average. You will know it so good, you will be 100% confident in your offer. If in doubt, pad it out!

When you're talking the larger multi family, letter of intent (LOI) are more common. It's non binding, outlines the offer, terms, and a due diligence period. If you in the smaller deals, a simple contract works. If you're going to start throwing offers on the regular, you want to have your attorney draft you these two items as a general template.

@Levi Brackman Market cycles generally dictate investment models with time horizons. Fix and flip, or arbitrage are good for peak markets with shorter exit strategies, because your trying to avoid the drop.. While buy and hold are preferred in down market, and can be combined with BRRR. You can get into more complex deals, such as MLOs to create other options to improve then purchase properties with the value built in from the cashflow. You could even go further and setup multiple MLO on multiple SFH, then refi using a portfolio loan using a NOI evaluation, thus shifting the value away from the building and over to the portfolio performance. Real Estate is just another commodity, and can be bought, sold, and traded a lot like stocks or crypto.. but it's unique element is the LTV, and tax havens that you can't find in these other assets currently.

Well, I did an inspection. The properties have been slummed for a very long time it seems. I found a number of cracks within some of the buildings that had lateral movement, as well as ground water, which means there is likely a broken sewer line somewhere nearby, plus a number of buildings had asbestos siding, and all the roofs have been patched to death, tho they claim they replaced them. Never mind whoever was living in the laundry facilities, and the endless list of small repairs that would be required just to keep it renting, or the fact that it's missing one swimming pool advertised, and one of the other pools is collapsing.. On paper it looked good, but the agents are in California, and so is the owner, and I really don't think they have taken a hard look at it in person. So they think this is a big discount compared to Class-A MF properties trading at ~3% direct caps, when in reality the property has reached the end of it's life, and they need to slice that asking price in half. I tossed them an offer, and they scoffed at it. I'll circle back around in a few months and see if the owner wants to change their mind.

 Why on earth would you put this much time into it, including paying an attorney?? The plumber and county/city said there is no leak. That means there is no leak.. It sounds like you got your answer already. Unless it's your problem, you should not be tossing your money away into other peoples life issues. For all you know the tenant left a hose or tub running, maybe one of their family members did, or they left someone borrow some water, and now are shocked and trying to get out of a bill they clearly owe. If you are not responsible, it is not your problem.