All Forum Posts by: Taylor Shields

@Emilie Benn 

Yeah I am not too surprised. Portland's inventory is so low that they may very well be able to sell it for a profit. Do you know who it was? 

They may have had other projects that took priority and if they bought it with their own cash the holding cost wouldn't be that much. Also, they may also be waiting through the winter and will start the rehab in the spring and put it on the market in the summer when they can sell it for more. 

Are you mostly looking on the MLS for deals?

 Possibly. I agree with it being a tool and all your other points. My feelings about debt are more pointed at institutional loans. I don't like the banks.

I would be interested to hear more about your risk models if you're willing to elaborate. 

If you are in trouble or know that you have problems with spending and personal debt listen to Ramsey.

If you are in a stable financial position and want to create wealth run away from Ramsey. 

Not to mention mutual funds are one of the most well marketed ripoffs in the financial services industry. 

 Haha ok you got me! 

 I'm afraid what I meant came out wrong. I know that one does not borrow additional to pay down principal. What I mean is, one keeps borrowing and keeps increasing their capacity to borrow or refinancing with the intent of eventually being debt free. It often seems that this process continues. One complicates their life and what is truly important.

Would you rather have 30 year loans on 10 properties or would you rather use an equity partner to purchase 10 properties splitting equity and cash flow 50% then buying out your partner with your 50% equity leaving you with 5 free and clear properties.

@Steve Olafson 

I agree with you. I don't think debt is ever the problem. Even when we are considering "bad debt". Our psychology is the problem. 

You absolutely learned, but like the analogy of a zookeeper and a lion. Even though you are very experienced with debt, you are still at its mercy. If debt is used it should be done with extreme caution and with careful stewardship. The risk comes when you have to rely on other people to pay this obligation for you. So you better make sure of a few things.

- These people are highly qualified to pay your obligations.

- These people will be glad to pay for it because they love the building and its location.

- You love to own it and it is well worth the risk of the obligation.

- There are no physiological factors that have impaired a proper application of your analysis

- And do you have the ability to significantly increase value 20%-30% above and beyond the debts within a few months of acquisition. If you had to sell this building tomorrow for 80% of a fair market value, could your debts be paid? 

The end goal for investors is the same: Eliminate debt altogether. If that is the end goal, how is debt really good? 

I am not arguing that debt is bad. It is neither good or bad.

Debt is always neutral.

I would like to hear if anyone has heard of a debt free business going out of business?

@Cal C. 

Has anyone considered how "Good" debt turns into bad debt in the blink of an eye? Just ask all the RE Investors that got caught in the bubble Debt is debt. There are smarter ways to use it than others but it is like a domesticated lion. If you make a mistake it will kill you. Debt is debt.

As far as I am concerned all institutional debt is bad. If it's not, why does everyone want to pay it down so badly?

If you think any debt is good then you probably will always be in debt!! 

Here is the logic I see: "Let's wrack up as much "good" debt as possible and I will eventually pay it down. To pay it down I need to increase my capacity to borrow and borrow more so that I can pay it down" 

@Emilie Benn 

There could be various reasons for that. A "good" investor wouldn't do something like that unless they know it can sell on the retail market.

Another reason might be that they tried to wholesale it, they couldn't. So they closed on it and hope it sells or they will just rehab it.

You should never try to rehab what you can't wholesale. This is a horrible investment practice and happens ALL THE TIME. You should wholesale what you don't want to rehab and dont be afraid to walk away if you can't wholesale.

Human nature is horrible at quitting something you have put time and energy into. You need to do everything you can to understand your own psychology and create rules for yourself, Otherwise, one will make poor decisions. 

@Jay Hinrichs 

As far as cashflow and appreciation in PDX, are you seeing anyone get the best of both worlds? Cash buyers of course. Apart from buying cash, Involving the seller in the financing seems like the only way to create some cash flow in our market. Am I thinking on this correctly?

I'm very serious about acquiring 4-8 units by the end of the year using seller financing. 

@Mike Nuss Might have some good input on this.

@Jay Hinrichs SHhhhhh don't tell everyone...

In the next 20 years I've heard population growth estimates from 600k to 725k here in portland.

http://www.oregonlive.com/washingtoncounty/index.s...