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All Forum Posts by: Nate R.

Nate R. has started 11 posts and replied 200 times.

Post: Cash flow is NOT king!

Nate R.Posted
  • Real Estate Investor
  • Austin, TX
  • Posts 214
  • Votes 234

This is correct.

So many investors chase cash flow to the detriment of long-term returns, whether we're talking about real estate, stocks or other "income" investments. Hence the proliferation of content about dividend stocks, "cash-flow" real estate, etc.

Post: Deal dilemma: Advice would be much appreciated

Nate R.Posted
  • Real Estate Investor
  • Austin, TX
  • Posts 214
  • Votes 234

Personally, I wouldn't do it, as I believe that an investment with negative carry is imprudent.

It could become an albatross. You'd be buying *after* a big run-up in prices and when the cost of money is very high. 

The upside hardly seems worth the risks to me. 

Post: How do I find Syndications?

Nate R.Posted
  • Real Estate Investor
  • Austin, TX
  • Posts 214
  • Votes 234

Just be careful to really vet sponsors and don't trust them to give you all the information you need to make informed decisions. 

A lot of people that have no business with other people's money have been syndicating deals over the past few years. The bodies are starting to surface, with some of these groups recently going belly-up.

Google "Applesway".

Post: 2 Capital calls in 2 weeks! Ouch

Nate R.Posted
  • Real Estate Investor
  • Austin, TX
  • Posts 214
  • Votes 234

I got notified of a capital call this week, too.

The other time I got a capital call was on a deal by a first-time sponsor (never repeated that mistake). I declined. The KP took over the management and stopped the bleeding, but it was still sold a little while later for a 20% loss.

Unless there is a convincing story on how they will turn things around and deliver great returns on the new money, I look at it as potentially throwing good money after bad.

Post: Housing crash deniers ???

Nate R.Posted
  • Real Estate Investor
  • Austin, TX
  • Posts 214
  • Votes 234

There will be forced sales, as people need to sell for a variety of reasons that have nothing to do with the housing market: divorce, job change, death, etc. Couple that with demand falling off a cliff, and we will see price declines. It's already started.

As OP notes, there are prognosticators and cheerleaders who insist that a "crash" cannot happen. Maybe so. But a significant decline back to pre-pandemic levels seems possible. The Fed has made it clear that one of the reasons for their hawkish posture is to get a "housing reset".

Post: Best way to sell a tenanted property?

Nate R.Posted
  • Real Estate Investor
  • Austin, TX
  • Posts 214
  • Votes 234
Quote from @Wendy S.:

@Nate R.

You say she has settled in and considers the place home. How about helping her to see if there are down payment assistance programs or any kind of low income solutions that might qualify her to buy the home?


I referred her to downpayment assistance from City of San Antonio. However, I doubt she would be able to finance a purchase given her credit.

I considered seller financing, but I don't want to deal with collections or foreclosures in the future.

Post: Best way to sell a tenanted property?

Nate R.Posted
  • Real Estate Investor
  • Austin, TX
  • Posts 214
  • Votes 234

We're in no-man's land. The lease has expired, but the tenant is still making partial payments. My PM thinks he's helping avoid damage by giving her more time avoiding an eviction.

Because of her history, her application with another landlord was denied.

Not sure what to do next.

Post: Would you purchase strictly for cash flow?

Nate R.Posted
  • Real Estate Investor
  • Austin, TX
  • Posts 214
  • Votes 234

I think it depends on your goals. For example, if you have enough equity to create significant enough cash flow to meet spending needs, then buying for cash flow makes sense. 

If the goal is to increase equity, then it makes sense to trade high cash-on-cash returns in favor of appreciation.

Post: Can one make New Braunfels as their main SFR portfolio city ?

Nate R.Posted
  • Real Estate Investor
  • Austin, TX
  • Posts 214
  • Votes 234

New Braunfels is a nice town, but it is a bedroom community. Historically, fringe areas like this get hit harder than the core of metro areas during housing market downturns.

Post: What to major in College for RE investing?

Nate R.Posted
  • Real Estate Investor
  • Austin, TX
  • Posts 214
  • Votes 234
Quote from @Bruce Woodruff:
Quote from @Nate R.:

Then why do it at all? Curious on your thoughts..... 

Degrees are still a filter at many companies. As Leo Ray mentions, college is a way to obtain valuable skills and connections. However, by itself it isn't enough to distinguish one's self from the masses of other warm bodies, since there is nothing exclusive about a degree anymore. Therefore if one seeks a college degree, the best strategy is to quickly obtain it while minimizing the cost.

Degrees that might be useful in RE: finance, economics, accounting, civil engineering, commercial real estate.

Agree with others that it is very worthwhile to get a STEM degree, especially in IT, from at least a decent state school. This is an investment that will pay for itself in a short amount of time.