All Forum Posts by: Steve Stuart

@Matt Fisher

Keep majority ownership- put in an LLC operating agreement that you make final decisions…

For his part, whatever percentage you give him have his share of the cash flow pay off his percentage of property (or down payment).

@Jennifer S.

https://www.washingtonpost.com/business/what-isthe-like-kind-exchange-rule-that-biden-wants-dead/2020/07/24/daf373bc-cddd-11ea-99b0-8426e26d203b_story.html

@Luke Davis

I’ve used grasshopper for the last 2 year and would give a 4* out of 5

Edgar,

It's hard to argue against a full-ride. Is it a scholarship or is someone paying it for you? What's your work ethic and drive like?

I left school in 1997 at 10 and was partially homeschooled for 4 years before starting to work full time; I would go on to grind out 7 day work weeks for 7 years working for others and started at $40/day and barely broke $50,000 my last year (21 years old) but the life and business lessons I learned were INVALUABLE. Keep in mind that when I say 7 day work weeks for YEARS - I'm very serious.

After bouncing around for a year I started a business with what I had saved over the years (my own savings, no help or safety net from anyone) and was fortunate enough that I succeeded because of ANOTHER 7 years of near constant 7 day work weeks. A big part of my succeeding was due to the 7 years of grinding for pennies and the knowledge I gained from it. The subsequent 7 years gave me the income I needed to invest properly in real estate.

So here is my advice to you:

You can skip college, grind out some (MANY) years working for low-wage but high knowledge (working to learn, not earn) and then parlay that hopefully into a business that'll earn you enough to really invest in real estate.

OR

You can take the free ride for 4 years, work and save money at the same time, and get a degree in something that'll mean something to your future (Accounting and Business management would be great fields) then get out and jump right into a job that'll pay you enough to properly invest.

Remember, investing -in a financial sense- by definition is the use of MONEY to make money. In other words, contrary to what the infomercials say.. you actually need money before you can invest. How much really depends but if you want to invest enough money to actually live comfortably off of, you'll need hundreds of thousands at least. Of course you can start off with less cash and work while you begin to invest, but you'll gain much more momentum if you're earning enough to save then invest 75%+ of your income. 

Go to college, work and begin your investing career on the side. You can always drop out if you start making millions.

@Jay Hinrichs

That is what I’m afraid of; do you think there is a tipping point of having enough doors within a certain radius that it would be of interest to the big dogs?

Hypothetically 100 doors across 4 blocks - (10 minute walk from one side to the other). Does that change the dynamics or is what matters is that it’s one uniform property with one tax map # essentially?

Delving further; does purchasing enough adjoining properties to create a decent size assemblage open the door to those investors or would the end game

there (likely) be developers?

TL;DR: What's the best way forward with 95 doors in the same zip code across 15 properties. Portfolio sale? To whom? Convert to a REIT?

A new triplex acquisition next week will put me at 95 doors. My overall ownership is 50% (some are 100%, some 30% and most are 50%). I am the point man and manager on everything though: I find and negotiate the deals and then I manage them for a fee off the top...I've always contributed my % of the money (no sweat equity) - none of my partners are active, most lack experience, and will follow my lead. 

On a couple deals I brought partners in out of necessity (financially) and on a couple I brought in friends (no financial necessity) with the hope I could have someone with "skin in the game" who could be relied on to manage while I'm traveling. The latter no longer appeals to me.

While I'm ok with the status quo (hunt out and negotiate as many off market deals as I can afford); I feel like the time is coming to take a bigger leap than a triplex here, a 6-Plex there.

What I DON'T want to do is piecemeal out the portfolio; so this is where feedback from people who've been in the same situation is needed:

1) What is the likelihood of selling a smorgasbord of C/B-  units (big upswing as most are a block off the beach) in one shot to a single or institutional investor when they're made up of mostly smaller buildings (32, 17, 7, 7, 6, 5, 4, 4, 3, 3, 3, + 3 condos and a townhouse)?

2) What if I wanted to consolidate and covert it into a REIT... buying partners out at the same time: What are the upswings and pitfalls? I can read books about it all day long but would be very interested (and grateful) to hear from someone that has done this.

I don't need cash for anything except future investments so the benefit of selling current holdings is simply to consolidate and scale. 

As far as a REIT conversion- I have no idea if this is even a plausible route to take.

Thank you in advance for the insights! 

@Shahar Joseph

Where is this property located? How did you come up with a rent value of $3,600/month?

@Jay Hinrichs

$100k cash is my number too..... actual value is probably twice that and seriously considering closing and THEN worrying about quiet title.

Tell me I’m crazy?

Looks like the only cloud is that it’s a tax deed. Sold at a tax sale in 2013 then flipped from that buyer to current seller in 2014.

@Jay Hinrichs

Where in South Carolina was your property? Here searching old threads because title came back on a triplex I’m buying with a Tax Deed.

I’m paying cash, so I don’t have to worry about a mortgage but it’s my first time buying something with a clouded title. My RE Attorney calling me back tomorrow, but I’m impatient.. ha!

@Mike Khalil

Mike, a couple points here...

NOI = Net operating income which means ALL expenses are already accounting for before reaching that number except debt service. You you can add back your figures for taxes and insurance. This will make your number look a bit better.

Being commercial it's also possible the leases are NNN.