All Forum Posts by: Account Closed

Hello BP! Long story short, I have a very comfortable net worth and no debt. I currently have 25 doors (mostly single family homes) and have a goal of 100 doors. With the current market my cash flow has been getting squeezed from $200-250 a door to right around $75 monthly (those numbers account for all expenses, including property management & CapEx). If I am very comfortable financially, have well over the 6 months of reserves for all properties and have the proper financing, how important is a "deal".

Am I wrong to think that what once was 18% IRR, and is now 13% IRR is still a good deal relative to anything else?

Side note: for clarification I have over 1 Million in Vanguard.

Thanks!

I would guess your Vanguard investment is tied to stocks.

The stock market will soon crash. Then what?

1 Vote

Originally posted by @Jason C.:

@Mike Hern

Yeah I’m fully aware of what can happen to lines of credit when the market changes. I was just countering your silly statement that home equity plus $5.00 would get you a cup of coffee.

What you call "equity" you converted to a loan. A loan is useful. It can be invested, or spent. Equity can not be such.

Plently of elderly people have huge equity but are starving. Why is this so? Because they need a place to live and if they refinance or take out a loan and they don't have enough cash flow (income) to make the payments, they face losing their home. (foreclosure) Their "equity" is frozen and useless.

Until equity is converted to something useful (into a loan or by selling the property) it doesn't do you any good. When you convert "equity" to a loan, it reduces your "equity".

Also, if the market drops, and no lender will convert your "equity" to something tangible, like a loan, then equity has no real value. Such is what happened in 2010 - 2013 Lenders didn't lend no matter how much equity you had. Perhaps you weren't investing at the time. I was.

It's the difference between having "money" and having "currency". $1,000,000 in gold vs $1,000,000 in dollar bills. Ask the people of Venezuela or Zimbabwe what good it did them to rely on "equity" and printed money. Those who held gold/silver/potatoes, etc faired much better.

Should you have "equity"? Of course, but don't confuse it with tangible assets.

0 Votes

Originally posted by @Jonn Vidal:

"Real estate agent killed showing home. She was reported missing by her
husband after showing a foreclosed home. She was found just minutes
away in a shallow grave.
Murderer appealed the courts for a new trial.

Realtors killed at open house has occurred multiple times in recent years. Crime
is getting worse everyday for realtors. Please be safe.''

So is there a panic button sorta app that helps prevent this?

Where was this?

0 Votes

Originally posted by @Jason C.:

@Mike Hern

Appreciation just allowed me to take out a $200k HELOC, so that's way better than a cup of coffee.

I will use that money repeatedly to build more wealth for my family.

SO glad to own my home!

I'm glad you could afford a home. I'm not against owning homes. It's WHERE to own them that matters.

How much is your yearly property tax? Texas has way High propertyTaxes. (I have investments in TX) but they don't have crazy laws and politics like in California which is what I was commenting on.

By the way, were you aware that when the market gets wonky, which it soon will, the bank locks your HELOC and you Can't use it. Just sayin'. (Check 1987 down turn 2000 down trun, 2008 down turn). You actually should have done a second if you want access to the money when good deals come around. Didn't know that? I wouldn't be so smug ;-)

0 Votes

Originally posted by @Account Closed:

@Mike Hern why wouldn’t you buy in California? The best appreciation historically in the nation. Also, prop 13 keeps your taxes low. I know many people that are millionaires simply because they bought a home 20 years ago.

Not sure what you mean by "low" taxes. I have taken two houses priced at $1,000,000 per Redfin. One in Torrance CA and one in Henderson NV just as an example. Time wold fail me if I went into all the comparisons obvioulsy.

$1,000,000 in Torrance - 1521 Beech Ave,Torrance, CA 90501 - 3 Beds 2 Baths 1,360 Sq Ft - Built 1927 Lot 4,275 - Prop Tax $12,696

$1,000,000 in Henderson - 1964 Larkspur Ranch Ct, Henderson, NV 89012 - 4 Beds 4.5 Baths 3,503 Sq Ft -Built 1997 Lot 8,712 - Prop Tax $ 3,636 - (1/3 the tax of CA)

The property in Henderson is 70 years newer, twice the size, the lot is twice the size and the taxes are 1/3 of the Torrance property.

Californians are "frog in the boiling pot" mesmerized. Over time things have degraded so much they simply don't notice.

Not to mention, the crime, the traffic, the cost of living, the cost of entering the housing market, no cash flow, and the crazy politics. The state of California taxes your wealth, lifelong no matter where you move. Look it up.

I love the California weather and the water and we just got back from Leguna Beach (which we frequent) along with Newport Beach and Santa Barbara.

But, I would not invest there. There are too many unpredicables about the future course of CA.

By the way, your appreciation and $5.00 will get you a cup of coffee. You can't eat appreciation, you can't invest appreciation, you can't guarantee that appreciation will be there next year.

Those taxes in Vegas will continue to rise as the values increase. In Torrance prop 13 keeps this from happening. I should have been more specific on what I meant by low taxes. Lower in the long run because they don’t rise proportional to the property values.

Interesting. You focus on what Henderson Might do in the future rather than what IS happening where you invest.

It's been fun. Toodlee Do and a good day to you.

0 Votes

Originally posted by @Account Closed:

$1,000,000 in Torrance - 1521 Beech Ave,Torrance, CA 90501 - 3 Beds 2 Baths 1,360 Sq Ft - Built 1927 Lot 4,275 - Prop Tax $12,696

$1,000,000 in Henderson - 1964 Larkspur Ranch Ct, Henderson, NV 89012 - 4 Beds 4.5 Baths 3,503 Sq Ft -Built 1997 Lot 8,712 - Prop Tax $ 3,636 - (1/3 the tax of CA)

The property in Henderson is 70 years newer, Nearly Three Times the size, the lot is twice the size and the taxes are 1/3 of the Torrance property.

Californians are "frog in the boiling pot" mesmerized. Over time things have degraded so much they simply don't notice.

I love the California weather and the water and we just got back from Leguna Beach (which we frequent) along with Newport Beach and Santa Barbara.

But, I would not invest there. There are too many unpredicables about the future course of CA.

By the way, your appreciation and $5.00 will get you a cup of coffee. You can't eat appreciation, you can't invest appreciation, you can't guarantee that appreciation will be there next year.

1 Vote

Originally posted by @Gregory Koszkul:

I have been doing a house hack the last few months of my 5 bedroom SFH (have filled 4 of the rooms and I live in 1 of them) and am now renting an external garage here for someone with an antique car. Do you recommend an umbrella policy?

Yep. Absolutely.

0 Votes

Originally posted by @Mary E Veldkamp:

I rent where I live to because it's so expensive in California and I move every few years with my projects. I would definitely consider owning my primary, but it's not an available option for me as I chose location and living on the beach for a premium for awhile at this time in my life.

Just spent a week in 92651. Would I rent or would I buy, I ask myself.

I would Never, Never, Never buy in Californi-eye - the list of Why makes me cry, but I would never buy in Californi-eye

1 Vote

Originally posted by @Don Konipol:

After raising over $400 million from private investors over the last 19 years, I am often asked what are the most important assets a syndicator need possess to successfully raise private capital. Here are my picks, in order of importance

1. A verifiable track record of success, especially in the type of deal being offered

2. An above average return with less risk than normal for that return

3. An attractive property visually and financially

4. A serious capital contribution by the sponsor

5. A recognized SEC compliant offering or formal exemption, includes professionally prepared PPM, Operating Agreement and Subscription Agreement, and Reg D form filed with SEC

6. Relevant document, such as MAI appraisal, title reports, surveys, historical financial statements, tax returns, projections, line item bids for any improvements to be made, as well as a clear, concise and relevant Investor Proposal Summary.

7. A road map to reach qualified, interested, potential investors

8. A portal investors can access for information and for making an investment

9. A quick response to investor inquires by a knowledgeable human being

10. A website presence that looks like it was created by a professional website designer and not from a template for a free or low cost service provider

A lot of it is already being successful, knowledgeable, and experienced, making it three times as tough to “break in”. More of a slowly build reputation, Capital, and deal experience. Reminds me of an old Yiddish proverb my Russian grandfather used to tell me

“With money in his pocket a man is smarter, funnier, and better looking too!”.

2. An above average return with less risk than normal for that return

What are you suggesting is "Above average return"?

0 Votes

Originally posted by @Simon Obas:

@Caleb Brown thank you.

The market is so hot right now, I simply put up signs outside the properties, listed on Craigslist and sold 2 flips a month before completion for more than asking. Closed on the first a month ago and we just closed on the second. In both cases the buyers had modifications we were able to include for them that made it more to their taste and didn't impact us.

No real estate agents needed.

In a slow market (this is definitely Not a slow market) you finish and stage the property first.

0 Votes

All Forum Posts by: Account Closed

Account Closed has started 141 posts and replied 4070 times.

Post: How important is a deal?

Post: “Live where you rent. Rent what you own.”

Post: Another Realtor Killed during Open House! RIP Any security apps?

Post: “Live where you rent. Rent what you own.”

Post: “Live where you rent. Rent what you own.”

Post: “Live where you rent. Rent what you own.”

Post: Do you recommend an umbrella policy for your 1st SFH rental?

Post: “Live where you rent. Rent what you own.”

Post: What is Needed to Attract Passive Investors

Post: When should I look for a buyer?