All Forum Posts by: Percy N.

@Amin Akhmadi, I think you mean the loan is non-recourse (still have some provisions that could make it recourse), not unsecured, since it is secured by the real estate.

In addition to the net worth, they also require around 10% liquidity.

@Chris Seveney, isn't a Reg A+ more expensive and takes about 6 months to setup?

Would a Reg CF ($5mm limit) be better for the original poster?

A Reg D 506(b) may also be an option but make sure you get a good SEC attorney who can articulate all the risks in the PPM and make sure you follow all the requirements, including auditing the partnership entity (I think this may be a minimum of an initial 1 time audit). You also cannot advertise this offering and you should be able to demonstrate a pre-existing relationship with the investors.

IMHO dealing with non-accredited investors is higher risk and God forbid the investment does not go to plan, are they going to be OK financially? I also find that the smaller dollar investors are the ones who call the most and need the most time, which is something to consider as you scale.

We prefer to stick with Reg D 506(c) for those reasons.

Can you please expand on your question?

Are you asking whether it is better to lease a luxury car or pay a mortgage on rental properties?

Well, the rental property (assuming it is cash flowing well) is an asset. If the luxury car is for personal use then it is a liability (taking money out of your pocket), unless it is being used to generate income like Turo, etc. 

If you must, you can lease (or buy) a luxury car from the rental income profits. 

When I was younger, I would buy/lease new luxury cars every 2 years. Nowadays I don't have time to shop for the cars and drive my old 15+ year cars until they stop working (and are fully depreciated).

Congratulations Logan!

Do you manage these properties yourself or use a 3rd party?

Where do you find most of these smaller deals?

I would say it depends on the market.

We had converted a 88 unit hotel into MTR for corporate housing in a market with a lot of job growth. However, it was challenging to get it fully occupied due to families etc that were looking for larger units.

Reyes, where is this located? We are considering something like this in FL if the numbers work. The challenge seems to be finding the right loan product for buying 20-50 units while the builder's lender is geared for individual purchases.

Also curious why you paid off your first property, especially if it was at a low interest rate?

 That is exactly why many of our investors prefer to invest in our syndications or fund, so that they can pool their resources with others and get the benefits of scalability, all while remaining passive.

 It's pretty normal to see investors who are wanting to grow their portfolio target smaller multifamily, in fact, I did that myself 10+ years ago. 

The challenge we found was that it is harder to manage the smaller properties since they cannot support a dedicated leasing person and a dedicated maintenance person. We found that depending your market, you need at least 75-100 units for this. 

Are you looking to invest as an active or passive investor? What size property are you targeting?

I had SFR rentals in Montgomery and Chester counties for the past 15 years or so.

The type of property you get will depend on how you plan to manage it. Are you planning to self manage a co-living space? 

Like any area, some will be better than others. Think about your ideal tenant base and where they would rent. I have also had good experiences with the Montgo Housing Commission.