All Forum Posts by: Account Closed

The vast majority of small investors buying houses use creative financing. Once they reach a decision point and a certain size they do one of three things. They just keep buying creatively, they cultivate private sources of money or they start using commercial lending.

You are never going to build a decent portfolio of properties with conventional residential loans. It just does not happen.

Did you buy real estate as an investment or to have a job?

If you do it because you want a job, then Mike's approach makes sense. Aside from his apparent superhuman ability to manage huge numbers of properties on almost no time, by doing everything yourself you can wring out every single penny from each property.

I invest. Therefore, I don't manage tenants, I manage the managers.

At the end of the day though, there is little point in debating this because it really comes down to lifestyle. If you do it all yourself, then you have to do or it does not get done. Using others allows you to apply leverage.

It almost makes me want to "fire" myself.

Ah, but then the unemployment insurance rate would go up next year.

There are so many things going on right now it is hard to isolate the variables.

Interestingly, the credit market has not seized up. It has tightened and it needed to do it.

The largest micro variable in play right now is the prospect of the capital gains tax rate doubling after Obama takes office. He said he was going to do it and investors believe him.

There is/was a lot of investors holding onto stock assets that have/had large unrealized gains. Yep, even with the market tanking the way it is now, it is still higher than it was 15 years ago.

People who are/were sitting on those gains are/have elected to realize those gains under the current tax structure. They do that by selling those assets. There is no 30 day waiting period needed to buy them back, so theoretically you would expect the buy/sell volume to wash out. But, many of these investors are waiting to see what happens over the next few weeks. There is no urgency in buying them back.

If PE BO would simply announce he will not raise taxes while the country is in this financial trouble, the stock market would stabilize and rally immediately. This is the number one thing suppressing the short term market now.

The first steps they will take is to impose required changes in ammo. Things like lead free bullets will drive the cost way up. Then there are always the taxes they have been trying to pass for more than 10 years.

The last thing they want to try is to confiscate the guns ESPECIALLY after the ruling by SCOTUS last summer.

In addition to your EIN the lender will ask for your information and permission to pull your consumer credit file too but a commercial loan will not be reported to your consumer file.

If you have bank accounts with the EIN they may or may not get reported and you may already have a business credit file at one or more of the credit bureaus, maybe even D&B even though they may not have given you the internal number they assign to your file, the infamous DUNS number.

The only tenants who know I have any ownership interest in their homes are the ones who also work for us. Just like Matthew said, I wouldn't know most of my tenants even if I bumped into them on the street. They could be parents at my kids school for all I know. Heck, they could be teachers or members of the staff.

On the PG side, you absolutely will have to guarantee the loans especially when you are starting out. There is no magical way around this. To get acceptable rates and terms, you will do a PG. Once you have established a relationship with a lender they may start to relax that requirement. The other way is once you reach a certain size in asset value and shareholder equity and number of shareholders they will relax it. Your lender can share their criteria, most investors won't meet it.

For most investors, a PG is going to be a way of life from this point on for a long time.

BTW, done properly a PG does not show up in any public records nor on your personal credit report. That is, unless, of course your entity defaults on the loan.

This is a prime example of not understanding the difference between "project time" and "elapsed time". In elapsed time, a 40 hour job will consume anywhere between 50 and 70 hours a week depending on commute and lunches. So, at best those two full time jobs would consume about 100 hours leaving only 68 for everything else.

I am not saying it can't be done. It can. But, bogus time estimates get many an investor into trouble.