All Forum Posts by: Amit M.

rule #1- be weary of gurus. They make their money selling books (or worse, "training" seminars), not by real estate.

You must slow down and study more sources, grasshopper.

I look at it differently than cash flow/no cash flow. Most properties will cash flow, given enough of a downpayment to reduce your monthly mortgage. So the question then becomes, how much money do you have to put down?

Let's say you have $200,000 (a lot, I know.) It sounds to me like many cash flow oriented investors would buy 10-15 SFH's or a larger multi unit, and get a decent cash flow. But, that is a lot of props to manage, and in most cases there isn't much appreciation in these types of markets. Or they are in heavy boom/bust cycle areas, and your values flex a lot. I'd be more interested in buying less property, but at a much higher quality- places that you'd actually be willing to live in! They may need 25-30% down to give you an okay return on your down payment. But, if you choose wisely and plan on holding for several years, you can make ALOT in appreciation.

This has been the case with much of costal California, and booming urban areas like Brooklyn, NY. Unlike cash flow oriented deals, you can make a much higher return (inc. appreciation based on your leveraged DP), and need to manage a lot less units. All the better if you live nearby and can a) manage and control the props and tenants yourself b) intimately learn the neighborhoods and what is upcoming and why. You're focusing your efforts this way and leveraging your specific market knowledge. I know many people in the SF Bay Area that made fortunes that way.

him everyone :)

Please keep me in the loop for the next meeting. Looks like a great way to meet local investors.

Out of curiosity, do any of you invest in the local Bay Area market?

if you stay there will be trouble

why hard money? You own a 4 pled in LA, if you have any equity, why not get an loc at ~4%? WF now goes to 85% LTV. I never touch hard money on principal. I'll only leverage what I have and buy using that. Screw that 10-12% due in 3-5 years. No wonder people get in trouble. And if the market turns, kiss your *** goodbye.

@Darren Sager

I'm actually surprised to hear that. Most big time developers focus on churning money in high end markets like NYC and SF, especially in a rising market. Especially given the high building costs, most towers don't pencil out as rentals. There are a few exceptions I see in my market, SF, but most were sold off during the last run up. The buy and hold folks usually have portfolios of existing bldgs.

But this may be changing of recent. Rents have jumped big time in SF over the last three years, and interest rates are low. So maybe some towers do pencil out. I know today a few are being built as rentals (but condo mapped; almost an automatic thing here in CA). The question is if the units will be sold off or not. I also know the rentals are usually smaller spaces- they love 1br and studios as they get higher $ PSF. Optimal condos for sale are usually larger units with nicer amenities. So there is a bit of a clash WRT optimization.

I have the same optimization issue in my much smaller properties in SF. I like to buy run down apartments, but be able to renovate them with enough amenities so in the future they can easily be sold as condos or TIC's (our equivalent of coops.) more in renovation costs on the front end (like putting in-unit washer/dryers) and nice decks, but at least I get the best tenant pool that way as well.

In the past have there always been new towers built in nyc intended only as rentals? Or were most resale condos?

For the record, I don't advocate buying expensive homes with big negs just to sit on them for appreciation. But the Venice home, it looks like there is built in value on the buy side, and you add value by adding the 1/1, and you can get close to break even on it renteise, and you can expect 15-20% appreciation in the next 2-3 years, investing ~$500k cash and doubling it in 2-3 years is a solid deal IMO.

Assuming the above, and that you live in SoCal, why won't you want to do that deal?

@Account Closed

I appreciate the great loans you've uncovered, but it's not all apples to apples. The schwab loans are probably based on having that amount in stocks/liquid as security, so that's different than getting it secured by RE equity. And your loc is nice, but the super cheap money is 12 month promo. Your brothers loc is more in line with my experiences, as I can get an loc with Wells Fargo private equity group for similar, incl on my investment properties.

BUT, the low doc option you mentioned is something new to me. If they also do that on investment props than that is golden! Could you forward me the bank and broker contact info for that? Good find! Thx.

if you sell, at least 1031 exchange. Makes little sense to sell RE, pay commissions and taxes, then buy all over again! Think 1031.

@Darren Sager I've also heard about the 18,000+ rentals in Brooklyn. That's almost all high rises. Aren't the developers mapping those out as condos anyways?

That's how It's done in SF at least. When the market was bad the plan was to build/map as condos but rent the units out. Then when the market turns around (like now) they don't renew leases and sell units off.

Can you shed any light on how this plays out in NYC? Thx.