All Forum Posts by: Michael J Callinan

I agree with some of the members here. I purchase all my properties cash initially then put debt on them after. Having said that I am buying properties that need work and are vacant so I force appreaciation. Even if you put 50% debt on your property to recoup some of your capital to redeploy with a 15 year note let the bank and your tenants work for you. By the end of your note you will be able to still enjoy a debt free property while making more money and having more assists in the end.  

If you don't want to risk losing the friendship I wouldn't rent to them. Tell them you like to keep your friends and business separate. It is not if but when they may be late on rent, are too loud, flood the tub. Plenty of good people out there.

I think you have a great model. I use a very similar tactic when It comes to my investing. I do not get involved with the option to buy but everything else you're doing I have done. I have had investors think about the profit I am making compared to what they are making and when they ask I simply tell them you can not do what I do in the amount of time I do it in. They don't have a team on contractors (which took many years), they don't have the realtor, they don't know the market. These are all valuable things and without use their money would be sitting there in the bank. If you are good and honest with what you do there are plenty of other investors out there who would love to get involved. 

I would appreciate feedback regarding an opportunity that has presented itself and wanted to know some potential options on how I should proceed. A quick background: I have performed and completed over 30 flips and rentals in the last three years in my market. The most so far was 5 projects underway at once. The more I grow the more some of my investors would like to be more involved which is good. However, this is the second time I have been approached by private lenders who can bring in colleagues to have "unlimited" access to funds needed to grow and expand. They have financial services backgrounds so they are always balancing risk/reward. They are younger like myself so they are looking for more than an annuity type of payment with a syndication. In this business we all know that having access to funds is a great thing to hear. Having said that, they want a bigger piece of the pie than they are getting (which is 10% ARP) They are not unhappy with the returns but like most entrepreneurs when they see an opportunity to grow and earn more they want to seize it. I certainly want to keep expanding.

My question is I have no problem performing at least 10 flips a year the way I have been running my business already. I have briefly looked into small commercial properties to expand and the other option is expanding into different markets in my state and performing more deals. Do you think it is worth it to perform more deals and give up more of the profit? Utilize more funds to buy commercial properties?

I appreciate anyones thoughts if they have been in this position and how it turned out for them. 

If a deal doesn't cash flow then whats the purpose of buying? That sounds more like a flip than a rental. Everyday a little debt is paid down and a little more equity is earned. Cashflow over appreciation. 

I have been having this conversation almost daily with my investors and partners. The good news is we are finding units in need of rehab and able to sell the building very easily with this market. I refinanced a couple properties in the last two years and this year I am seeing the same types of properties asking/selling for 30k higher. I am glad to sit back and watch because every time I see someone over pay I tell my realtor I will be buying that house in 3 to 5 years in foreclosure. 

I think all your considerations are great ideas. You have to ask yourself what you want and where you see your business going. There are many investors who are happy with 10 smaller properties and thats all they need. Some investors such as myself love the syndications and bigger deals (along with the headaches for both). You will get a plethora of great ideas from here but they will be from what each person would do, not necessarily yourself. Especially when you have girlfriend, I would sit down and write out your life plan and build your business plan around that. Sounds like you are in a great position with those properties already, good luck. 

Depending on where the property is located could you rent out each room for $ 850 to students? Find an organization that is willing to pay higher rents for their professors, engineers,  ect? Did you find out you were negative after you purchased? If so, I suggest better due diligence on your numbers so you won't run into this again. 

Conggratulations! Work like they won't so you can live like they can't. 

Does the bank feel guilty when you don't pay them and they foreclose on you? I know its harsh but you can't have too many emotions when it comes to paying rent/bills. We (investors) don't get any sympathy.