All Forum Posts by: Nathaniel Parr

Welcome. Anchorage is a great place to be right now. 

Yes, if your building has 4 units it is eligible for financing with an FHA loan, which do have low down payments. This is one of the cheapest ways to get started with less money down. The FHA just lowered the mortgage insurance premiums as well, making it an even better option.

There is also the Conventional 97 loan program that Fannie Mae just brought back. That involves a 3% down payment. You'll want to consider the pros and cons of both and see what you can qualify for. I think the FHA loan might still be easier to qualify for.

What you're describing is real estate syndication. When you are selling shares of interest in real property, those interests are securities and you must observe the laws and regulations relating to securities. Syndications can be done as private offerings, in accordance with SEC regulations. 

Generally there will be one person or entity (the syndicator) who is running the operation and there will be passive investors with capital. There are multiple ways to profit as the syndicator without investing any money of your own. You take a fee, either as a flat fee or a percentage of the total transaction; you can charge an ongoing management fee; and, you can receive a portion of any surplus cash flow remaining after you've paid your investors what you promised them in return, and receive some amount of equity in the property as well. 

1. Are you going to pay higher than appraisal for a fixer-upper? I'm not familiar with the market down in Soldotna, but, I'd be wary of that. If the owner won't budge on that price, you might want to hold off and look for a better deal. I suggest you decide how you want/need this property to cash flow to make it work, then do the math and figure out the price you need to get it at in order to hit that target.

2. I am curious why you are going to give a cut to a property manager when you will be living in the building yourself. Any reason you can't manage it yourself? I take it you might be a North Slope worker? In that case I might understand.

Hello, what sort of legal assistance do you need? My firm is knowledgeable in the areas of real estate transactions, securities, business law and contracts. 

If you'd like, you can email or message me and tell me more about what you're looking to do, and see if we are able to help. 

Hey, thanks. Yes, I know I need to be thankful for how fortunate I am to have an education and be in a position to pursue these things. Thanks for your comments. 

Thanks Connor! Your step 4 is my eventual goal, too; it seems like the best first purchase to make, being able to put very little down on an FHA loan and hopefully be able to pay the loan payments with the income from other tenants, essentially living for free. That's what you did, I imagine?

I'm glad to hear that you graduated with a 10 year plan and have been able to make good progress with it. 

I need to do some more figuring on the best way to approach my debt. 

Roy: Thanks for the tip. I'll check it out. 

Andrew: It is normally 20 years, but with Public Service Loan Forgiveness it is only 10. PAYE is a qualifying payment plan for PSLF so you can make those 10% payments and then get tax-free forgiveness after 10 years, if you hold a state or public interest job for the duration.

Jordan: Thanks a lot. You raised the question that has been on my mind already, namely, whether I could more than make up for the loan forgiveness savings by earning more aggressively right out of the gate. I haven't projected that yet, but it would obviously be contingent on being able to find higher-paying private sector work. I haven't had much interest from private firms so far. At this point I have decided that if I could find an opportunity to work in private practice with attorneys who do real estate transactions, tax, and small business, I would go for it, because I think the skills I would learn would increase my earning ability more than enough to make up for having to pay off the loans entirely. 

But, that has proven to be a challenge so far. 

Thanks for the reply. That's a good idea to look into; if I created a corporation to flip and/or wholesale properties, and reinvested any profits in the corporation, it shouldn't count against my personal income for loan repayment purposes unless I take a distribution, right? I am just speculating; I need to learn a lot more about tax and corporate law. 

I've been interested in investing for a while now but I have also been a broke student for the past 3 years. Now I have graduated from law school, taken the bar exam, and realized that I don't want to work  9-5 for paychecks for the next 20-30 years. So, I have decided to start planning to achieve financial independence. I've heard talk on the podcast about how it can be very helpful to have a steady paycheck when starting out with real estate investing, for obtaining financing. So, I plan to use my legal career as a springboard to becoming independently wealthy.

I have about $150,000 in student loans. I also work for the state. My current understanding of the situation is that I am eligible for Pay As You Earn repayment and Public Service Loan Forgiveness, which means that I would just have to put 10% of my discretionary income (income left over after subtracting 150% of the poverty level) towards my loans for 10 years and then they'll be wiped away. So, I am thinking that it might be a good plan to plan on keeping a state job for 10 years while I make the minimum payments on those loans; according to my calculations, if I just made $60,000/yr for those 10 years, I could pay off the $150,000 in loans with only $40,000 in total payment, and the forgiveness is non-taxable. 

Meanwhile, I can use the rest of my discretionary income to invest, using my steady paycheck from the state to obtain financing, and, after working for 10 years, my student loan debts can be forgiven and I could also have a portfolio of assets. At that point it would be feasible to go into solo law practice so I can work as much as I want while focusing more on growing my assets and my passive income.

However, I would like some feedback and I have some questions. Can some more experienced and sophisticated persons tell me if there are circumstances under which it might be a net gain to quit my state job earlier? I figured that the potential tax-free return from loan forgiveness probably makes it worthwhile but still, 10 years is a long time, and if anyone sees a better route, I'd like to know.

Second, what would be the best investment strategy while I continue to work? Buy-and-hold seems to a better complement to a 40 hour workweek compared to flipping or wholesaling because it requires less legwork. I was thinking I could just collect assets during the first 10 years. But, what I am ignorant of are the tax consequences of different methods. Am I correct in thinking that flipping or wholesaling would result in capital gains that would affect my Pay As You Earn loan repayments, while collecting and holding a portfolio would not affect my liability on my loans as long as I don't sell anything until 10 years are up? If that is the case, it seems like the far superior plan.

I'm just getting started on this and would welcome all feedback and suggestions. Also, if it makes any difference, I currently live in Alaska and also have ties to Washington. Thank you.