All Forum Posts by: G. Brian Davis

Hi @Brittany Farrell, I would explore passive investing, given your goal of not working - active real estate investing is a lot of work! And you can earn returns just as high.

A lot of the deals we've vetted and ultimately ended up fractionally investing in this year as an investment club have targeted pretty immediate cash flow. For example, we invested in a few deals with Rise48, which aims to start paying distributions in the first quarter of ownership. We invested in a deal with MAG Capital Partners slated to start paying distributions within a quarter or two, and one with Next Level Income, and one with Goodegg Investments.

If you want high yield immediately, look at debt funds and notes. We invested in a note with Norada paying 15% interest. Groundfloor has a good note paying 10% interest right now. There's no equity upside in these, but you get the income right away, at a high yield.

It helps if you have some fellow investors to go in on these with, so you can split the high minimum investments. Friends or family work, or you can join an investment club. Keep us posted!

Conventional wisdom is to pull back on risk as you approach retirement, but given your mom's lack of savings, I think she's going to have to accept more risk in order to try to get where she wants to be.

A first priority would be to find a way to house hack and eliminate her housing payment. There are more options than multifamily - she could convert her garage into an ADU for example. My cofounder at SparkRental, Deni Supplee, hosted a foreign exchange student to house hack when she was in her late 50s and early 60s. The stipend covered her mortgage payment.

I'd then look into the concept of "infinite returns." I wrote about this on BP not long ago. The fastest turnover to get your investing capital back is the BRRRR strategy, but it's a lot easier and takes less skill to invest passively in syndications that plan to refinance to return investors' capital. We've invested in some deals like this in our passive investment club, so each member could invest relatively small amounts. Either way, it lets you reinvest the same investing capital over and over.

Just start looking for ways to boost her savings rate and start investing every penny possible for compounding returns. She's going to be on the catch-up plan, so she might need to tighten her belt a bit. Best of luck!

Hi Alison, it depends on whether you renovated the property or not. If you did a significant renovation to force equity, you can refinance any time, but if you just bought a turnkey you'll have a hard time refinancing in under a year. 

Also, start networking with portfolio lenders like Visio and New Silver rather than relying on conventional lenders. They're more flexible. 

It sounds like you want access to more working capital, so I'd check out Fund&Grow. They're a "business credit concierge" service, they basically help real estate investors and other small business owners open unsecured business credit lines and cards that they can use for any purpose. We hosted them a little while back to explain their process to our audience.

Hi Rob, while our investment club typically vets and goes in together on equity syndications and funds, we have invested in a little debt this year. We invested in a 9-month note with Norada Real Estate at 15% (they've been paying like clockwork, reaches maturity in May next year). That's not secured by property, but backed by equity in a range of businesses. I've personally invested in Groundfloor's 10-Year Anniversary Note paying 10% interest on a one-year term. I know EquityMultiple offers notes as well, and they have a strong reputation. Chris Seveney of 7e Investments has a good reputation too, pays 8-10%. For a more liquid, shorter-term debt investment there's Concreit, which pays 6.5%. 

If you merge funds with other investors or join an investment club, you can also invest small amounts in real estate syndications and funds, helping to spread out risk. I invest $5K apiece in these, for example.

There's no risk-free investment but you can spread out risk and invest with reputable people. 

Syndications typically target 15-30% annualized returns. The main con is the high minimum investment ($50-100K if you don't invest with others as part of an investment club). Other cons include lack of liquidity and long-term commitment (3-7 years). And of course they come with risk, like any investment. High interest rates have pushed exit cap rates higher, which has made the last year or two a challenging time for existing syndication investments. I personally don't believe the risk is any higher than investing in stocks, but the typical returns are higher. Hope to see you at our next Co-Investing Club meeting to review deals together!

We invest in private equity real estate syndications, fancy term for group real estate investments. It's not crowdfunding (which is advertised to the general public), although there are some similarities.

Every month we get together as a club and vet deals from different syndicators, and anyone who wants to invest in a deal can do so with $5K apiece. 

We typically review deals targeting 15-30% returns. Each deal is different, but we usually ask for the syndicator's past track record and achieved returns when we vet their deals.

It's a new concept to many investors, who aren't familiar with private equity real estate. Just let me know if you have any questions about it.

@Himanshu Das

Are you sure you want to actively buy properties long-distance, rather than investing passively? Owning rental properties is hard enough when they're local. I used to own dozens of properties, and it was a pain in the rear. 

Today I own a fractional interest in over 2,000 units, spread all across the U.S. And I don't have to do anything with any of them, they're all passive investments. The beauty of diversification is you don't have to perfectly predict one single market or property type, you get exposure to many. My crystal ball is no clearer than anyone else's, which is why I've spread $5K here and $5K there among many different multifamily properties, mobile home parks, hotels and Airbnbs, retail, etc. properties in dozens of markets. 

Look into passively investing as a member of a real estate investment club, to crowdsource both the money (to hit the high minimums) and the knowledge in vetting deals. 

And if you really want to buy properties directly, I would just urge you to avoid cities and states with tenant-friendly regulations. They make your life a nightmare as an investor. Take it from someone who used to invest in such a market. 

@Grozie Thomas

I would echo @Jonathan Nichols and @Michael Margarella on house hacking a small multifamily if you want to get into active investing. It's great experience, and of course you eliminate your housing payment if you do it right. Alternatively, you can house hack with housemates or an ADU.

But it's worth noting that you don't necessarily need a ton of money to invest passively in real estate syndications. If you go in on syndication deals with others as a member of a real estate investment club, you can invest with relatively small amounts. For example, in our Co-Investing Club we meet once or twice a month to vet deals, and members can go in on them together with $5K apiece. 

Personally, I no longer buy properties directly. I spread small amounts of money across many passive investing deals. You get all the benefits of real estate (cash flow, appreciation, tax benefits) without any of the headaches of landlording or asset management. 

I fell into a job out of college working as a loan officer for a hard money lender. This was back in 2003, and over the next few years I saw all these guys making money hand over fist in real estate. I went on a buying spree, overpaid, and lost my shirt in 2008. 

The things I would tell my younger self could fill a book. 

Part of me wishes I'd discovered passive real estate investing earlier, but the truth is today's regulations allowing non-accredited investors didn't exist yet at that point. It's a lot easier to invest today if you learn the basics of investing as an limited partner in syndication deals, especially if you invest as a member of an investment club. 

@Eric Lowe

There's a company called Rental Property Refund that does cost segregation studies virtually, based on self-reported data from you. I think they charge around $1,500. 

I no longer invest in rental properties directly, I prefer spreading small amounts ($5K) in real estate syndications through an investment club, but we did a write-up on this company a little while back. Worth checking out for SFRs.