All Forum Posts by: Perig Vennetier

Here is an update on the IRR numbers two months later:

                  Cumulative All Time | 2018

• Fundrise Growth:    11.3% | 14.8%
• Fundrise Income:    10.4% | 11.1%
• Rich Uncle NNN:        7.2% | 7.7%
• Rich Uncle Students: 5.0% | 5.0%
• Realty Mogul I:           6.2% | 6.6%
• Groundfloor:              5.8% | 6.7%

All are up a bit on average.

Now with the S&P500 at about +4% for 2018 so far, these numbers start to look pretty good...

Great thread, thanks for sharing this wealth of information.

Hi fellow investors,

My wife and I are getting an investment property overseas where my wife is from. It is an apartment that we will rent out. We will be paying the entire cost of the place over the next 17 months from developper.

The most likely plan is to take out a 10-year HELOAN at about 4.5% fixed on my primary house in CA which has a large equity to pay for the property over the next 17 months and then amortize that over a longer period of 10 years. The HELOAN would allow me to free up some of the cash locked in my current house and create a bit of leverage. HELOAN would only be about 14% of the equity so little risk even on a down market.

I am picking 10 years as it is the point where it will allow me to cash flow monthly and it keeps the rates low enough. I could go with a HELOC (30 years) and have a larger line and bigger cash-flow but I don't like the floating rate in the current market and I don't currently need more cash. On the downside, with the HELOAN, I leverage only a small portion of that equity and, as I understand it, I would have to pay off the HELOAN before being able to access more (no plan to borrow more though as I don't want to over leverage). I could also pay more monthly cash out of pocket as my finances allow it but I'd prefer create cash-flow and put that extra cash into other savings or investments.

Any other pros and cons of shorter vs. longer term HELOANs? I could go for something shorter, 5 years (4.09%), or longer, up to 15, 20 or even 30 years although interest rates start to get up there (4.49% @ 10 year, 4.94% @ 15 years, 5.49% @ 20 years, 5.99% @ 30 years at US Bank) and the monthly payment difference start to taper off for terms longer than 15 years.

What's your take o thnis plan overall? Not about if I should or should not buy the property because that's decided but on the plan itself to finance it.

Thanks!

I'm invested in four of the crowdfunding platforms (Fundrise, Rich Uncles, Realty Mogul and Groundfloor). I've been invested for about 2 years on almost all of these. It is a bit of a short amount of time but so far I am quite happy with the results of all of them.

Here are my IRR for the past two years and IRR for 2018, including change in NAV, including cash sitting idle between deals, etc. Full account IRRs:

• Fundrise Growth: 10.9% | 13.5%
• Fundrise Income: 10.6% | 9.5%
• Rich Uncle NNN: 7.16% | 7.8%
• Rich Uncle Students: 4.2% | 4.2%
• Realty Mogul I: 6.0% | 6.3%
• Groundfloor: 5.6% | 6.4%

As you can see Fundrise is outpacing the other options so far.This is mainly due to a good increase in NAV value (but this also means dropping yield). Also note that Groundfloor is growing slowly due to the slow pace or repayments and I expect it to close in on 9 to 10% annualized yield/IRR.

Below the IRRs over time:

You can see the the Fundrise started in the red due to a drop of the NAV early on. It has recovered nicely but that is something that may happen again.

Note that the S&P500 in the past two years has been about 15% IRR so this is great for diversification and it may keep pace with the market in the long run but true full diversification is also important.

Bottom line, as far as I am concerned, I would give a green light to Fundrise with the caveat of a reocmmendation to diversifying between multiple offerings (I like wide diversification for safety). I am considering adding stREITwise to my portfolio.

 Well said!

Hello,

I just discovered this site and I started going through some of the articles and forum posts. What a wealth of information!

I am interested in learning more and sharing information mostly about buy-and-hold rental real-estate (single or multi-family) but also around trust deeds, short-term real-estate backed crowd-lending investments, eREIT (if these are discussed here), and some more that I don't yet know about!

Please connect with me if you have the same interest and let's get to our financial freedom together!

Cheers,

Perig

I take the idea is to outflow less cash than renting and not equity (not necessarily the same perspective).

If cashflow is only the important factor here, then the only question then should not be the price of the house but how much you would pay per month including what you would receive from a tenant.

A quick calculation for $600k at current fixed market rates, even with only 10% down, you would pay around $3,200/mo including everything, tax, insurance, PMI, etc. You have to account for some repairs and maintenance so let's say it'll all cost $3,500/mo.

A renter would probably pay $1500/mo as mentioned in the current market and there is probably lots of people looking for this price range.

However, as your cost will be fixed, the question becomes, could you still pay your mortgage if rent prices were to fall, say to $1000/mo? It would then cost you about $2,500/mo, still below what you pay now in rent. Could you still pay the full $3,500 if you were to not find a renter?

If the answer to these questions is yes, then there is no reason not to buy, as long as you have the down payment.

If you also look at opportunity cost of not investing the down payment and the appreciation (or depreciation) of the house, then you have more aspects to consider and buying low then potentially becomes a more important factor... but it can also keep you from doing anything...