All Forum Posts by: Kevin Moen

@Sonny Ruckstuhl  a killer deal is a killer deal, and that should be considered above all tax implications if you are sitting on one. However, I see plans to make great deals all the time, and then reality sets in. Have you completed a transaction where you made 50% to 100%, and do so without leverage? 

I think the question is more complex than that, because if you are holding a rental you must/should hold reserve funds in that account for any unexpected repairs, etc. I would include that reserve as part of my investment since its not earning a return, which will effectively lower your cash on cash return. If you are using leverage you are paying tax on that leveraged portion, so if you are planning on doing a cash out refi, pull all or most of your investment out, what is the point? You pay tax on all of that cash out refi and effectively lose the tax shelter of the IRA/401(k).

I typically see someones true rental return, after vacancy, repair, and cap ex, is similar to holding a note. Maybe you get some appreciation advantages, but for $100k or so rentals, there is usually not much.

@Peggy Mitchell Yes, typically 2 years or more, if you consider that long term.

@Todd Moriarty I feel NoteSchool is a genuine coaching/mentorship program really aimed at helping students become successful. However if you don't have the time to put into really working the business, or get analysis paralysis, no coaching program can help. I am not saying all students exceed their expectations, but many that put the work in do very well. I went from not knowing what a note was, to over 10 completed transactions, and am now a managing partner of a fund that invests in notes. NoteSchool sure accelerated my learning curve, and that is one reason I chose to invest. If someone is looking for more passive returns, I would look into investing in a fund that buys notes.

@Chris Jackson will do, Im sending you a request to connect and PM.

@Suzanne P. We sell partials, and are happy to work with new and learning investors. When we sell a partial its closer to a partnership than a sale, as we have a vested interest in the backend, and an option to cure our partial buyer if the loan were to default. 

@Demjan Van Der Kach feel free to PM to chat.

I would pull cash out via refi if possible or sell if I put 20% down. Thats not enough cash flow for that large of a down payment. How did you determine the rent rate?

@Jennifer W. conventional financing with 5% down? The way I run my numbers would be your Rent less PITI, 5% vacancy (for a strong Seattle neighborhood) and 8% of rents toward a repair/cap ex allowance. That puts you roughly at $360/mo cash flow without management expense. Its a tough decision because taking advantage of the gains tax free is a big deal, so is holding a rental that cash flows in Seattle, especially if you can pull some equity out to go and invest in more real estate. What neighborhood is it in?

@Sandra Hale Are you servicing this note, or do you have a 3rd party servicer? I agree with Mark on IRS's position.

@Account Closed There are three major things that a note investor needs to account for which can blow up a note deal: 

1) Taxes

2) Title

3) Blighted Property

It is possible to mitigate against 1&2 with prior research and reports. Bullet point 3 is the risk in non performing notes, and why they trade at such large discounts. Our fund invests in both performing and non performing notes. Performing notes can often be competitive with rental returns, yet no tenants, toilets or trash to deal with and a nice way to scale a business or investing portfolio. 

Kevin Moen