All Forum Posts by: Robert Rixer

Debt has no feelings, it's just an amplifier. If you do a good deal it can turn it into a great deal, if you do a bad deal it will turn it into a terrible deal. Of course no one goes into a deal expecting it to be bad so many investors unfortunately only calculate one side of the debt equation.

@James Carlson Great point which is often overlooked. Reminds me of Blackstone's founder Stephen A. Schwarzman who said that when making acquisitions that have long term appreciation (should be all deals), he would often leave money on the table and give the seller a higher price than he could otherwise have gotten. He's less likely to lose deals to competitors and also for future deals sellers know he comes in with fair prices and are more likely going to want to do business with him over others.

I've said this a number of times before, house-hacking sounds good on paper but rarely pans out as people expect. Namely high prices compared to returns in multifamily and also high interest rates. The biggest thing that few people talk about is the ideal investment property and the ideal place to live rarely overlap. You will almost always sacrifice one for another. I would bet you could make house-hacking numbers work in an the absolute worst neighborhood in your city, but chances are you're not willing to live there. 

If you're concerned about the market rents not supporting the high construction cost then getting a government loan, partnering or syndicating won't fix that problem, if anything you will just drag more people into a losing proposition. A government grant is a different story.

Yes, but they're not easy. Cold calling building owners, mailer campaigns, text campaigns, online community groups, lender referrals, live auctions. Most of these approaches take considerable time, effort and money which most people are not willing to do. If it were easy, every one would do it.

Non owner occupied. The best solution in your situation would be to get a non-owner occupied loan with no pre-payment penalties to buy the building then cashout refi in September when you move. You will pay origination points twice but rates are expected to be lower by then as well so it could be worth it.

Don't know this specific "mentor" but I would typically advise to steer away from them. The model is very common and usually has mixed to poor results. The truth is having to pay large sums up front hurts your ability to invest at the time when you need every dollar you can get your hands on. If they truly had your best interests at heart, they would defer the payments until you made a profit. 

Good mentors are invaluable but also very overrated by beginners. There is a wealth of information for free online and on BP.

I always say investors don't spend nearly enough actually looking for deals and developing creative strategies for getting good deals. Many focus too much attention on marketing themselves, raising money from investors and squeezing management and then their strategy for finding deals is "waiting for brokers to send them good deals".

Also worth noting, unlike the stock market where you can buy into the broader market and the market price is set, real estate you are buying a single specific deal where prices are not set. You could miss the bottom of the market but still get a deal that is better than anything available at the market bottom. Similarly you could catch the bottom of the market but still not get as good of deal than another property that comes up 6 months in the future.

@Jeff Hamann Couldn't agree more - everyone is usually looking for the next hot town/city when what they should be looking for is the perceived trend of a town/city as a function of the price. The midwest is a prime example of being overlooked but the pricing actually is pretty reasonable these days (at least compared to a couple of years ago).