All Forum Posts by: CK Hwang

@Mark Ferguson , thanks for the article. I'm interested to learn how to carry all this debt safely. How much reserves as a percentage of the total debt do you keep in a bank account for an emergency?

Do you have any tips besides having a reserve and being cash flow positive, to ensure that the debt can be carried safely?

Thank you. 

@Steve Olafson that is so amazing you can do 100% to 300% returns a year. I have no idea how to do so through real estate investing unfortunately, so need to look elsewhere and I'm still not sure how to grow it so fast safely. 

Totally agree with you @David Krulac , I've always felt real estate investments don't tend to cash flow well. We get excited about 20-30% COC returns when other industries are looking at 100-300% COC returns or even much much more. (of course in some ways that cash down is unsecured).

I've always felt RE is only one of many tools to be used if one wants to grow extremely wealthy. Nothing wrong with RE as an investment. Combined with other forms of cash flow, I think it becomes a very powerful tool.  

Doesn't fly here in socal coastal cities either as a residential rental. On a $700K house you will need to collect $15K per month in rent. Have never heard of anyone paying $15K a month on a $700K house because they would be far better off buying at that point. 

@Jordan Solomon , when you're first starting out, it's hard not to spend a lot of time and gas driving around. But I don't see it as a waste but rather as a capital investment. 

Once people recognize you as being a serious player who will actually perform, they will start bringing deals to you instead. When I first start, 100% of my early deals were all from driving around. 

2 years later, it's down to 50% from driving, 50% from people calling to ask me to buy. Hopefully down the line it will be 100% people asking me to buy so no more driving around.  

@Jordan Solomon , the way I sift out MLS deals is to look at the pictures first. Then look at the age of the house. This normally gives a rough idea of what the rehab costs is going to be. I almost never ever talk to the seller for a house on the MLS. Ask any owner the condition and 99% of them will think their house is worth more than it is.

I will enter the numbers into my spreadsheet, if it makes sense, i will go look at it. If there is a open house, I'll just go to the open house, if there isn't, I'll get the realtor I work with to open the door. 

Especially when it comes to the MLS, I'm not really sure there is a way to get away from seeing tons of houses and making lots and lots of offers since it's hard to find and secure a good deal off the MLS.

When you're first starting out, just drive, there is going to be wasted time and gas, but that is part of the learning process. If you work with a realtor, make sure he/she knows what they are getting into, but I find a good realtor an essential part of the team. When you're first starting out, you'll need them to help you with ARVs and specific knowledge about neighborhoods.

Many realtors will tell you straight off the bat that they don't want to work with investors because of all the offers and driving they have to do. The realtor that handles my buys might go for 6 months within nothing (of course I feel bad, but what can we do right?), looking at dozens of houses, then we will have a good month and it will be all worth it.  

@Joshua McGinnis , gosh, congrats on getting all those yellow envelopes together. Now that is what i call marketing effort. 

I am curious though, since you're based in Beverly Hills, how are why did you pick OH as your target market? I don't know anything about the OH market, so I was wondering why you would pick such a distant location as opposed to working the LA area? 

Hi @Ben Stoodley , thank you so much for your insight. I think point 1 about the lender being the check writer was a really good suggestion. I often get calls from people wanting to lend money, but it's hard for me to tell how many hands this lump of money has passed through before reaching me, each one taking a small chunk, and that is why I've always been hesitant to use a HML versus working with a direct investor.

Brandon, if you're interested in Nicaragua, you should get in touch with Holly Beck. Former pro surfer now turned into somewhat of a property developer in Nicaragua, specializing specifically in surfing areas. 

I'm tempted as well to invest in the same asset class as you since I love surfing, but not quite ready to pull the trigger yet as I'm not sure what my vision is for such properties. Perhaps in a few years when I retire.  

Himanshu, an easier way to figure this out would be to decide how you want to securitize your investors. For example if you are doing new builds, is each investor going to own a unit of the building? own a percentage share of the corporation that is governing the project? given promissory notes and an annual return etc?

Once you have decided how you want to the investor to be involved, then you will best know what laws apply to you ie, SEC, IRS etc. But right now, without any clarity as to how you want to structure the deal, it is hard to know which US laws apply.

In fact, after you have figured out how to structure your deal, you might even find that it is easier to raise funds in India than in the US. Is there any reason you want to raise funds specifically in the US? Are you taking a short position on the USD that's why you're raising funds here?  If that is the reason, it might easier to just go to some Asian bank and get a USD denominated mortgage. Certainly the admin costs will be far lower than having to adhere to SEC and IRS regulations.