All Forum Posts by: Tom Kastorff

Very common now across all of California. Mammoth Lakes (big ski town) shut down a week or two ago, banning STR and demanding that any and all non-locals go home and for no one to come up, to try and stave off the COVID spread. They now have 2 confirmed cases. Places like this have small regional hospitals, they need to try and hold off as long as possible.

My PM automatically cleared the calendar for the matching period that the Town requested as shut down. With the town on lockdown, bars and restaurants closed, ski hill closed, there is not much to do anyway for anyone to go up. 

Palm Springs also just announced stoppage of all STR - including hotels, vacation rentals, etc. I was making offers on a few places there recently, and am now glad I did not win any deals. Would have been a brutal start to a summer STR.

@Jay Hinrichs when I priced one out it was $113k brand new. $50k isn't bad. but again, for WFH guy that only hops on airplanes for work, has a big truck in the driveway, and a stay at home wife and toddler, even a 50k SUV is too much, because we'll rarely if ever see the value of electric because we don't even buy gas once a month. I wouldn't even drive the X to the mountains because it's 400 miles each way, would have to stop to charge in both directions, and cannot match the 4x4 of a winter-equipped Tundra. But I would still look at your photos and listing if you were selling an X.. :) 

off topic, but want to follow this thread anyway since LV RE is on my target list, but @Jay Hinrichs PM if if/when you go to sell that other X... slight interest in them, but as a full time WFH guy spending 100k on one is pointless to me, but a nicely used one could be worthwhile...

@William Green very nice flip, very clean, nice waterfall island, clean pool and yard. Well done. Would you recommend any of your contractors? Your GC? Do you only do flips in PS or any other type of buy / hold / etc? 

You posted a question, one that has been posted often (and I had the same one when I did my cash out refi). You got the simple answer you needed. Why still be doubtful? If you really don't trust the community, pick up the phone and call a CPA. 

Taxes are about reportable income. Do you plan to report a loan as reportable income? I don't. It's a loan product, that instead of putting all the capital purely into acquiring a property, this loan rebates some cash back to you. But it's still a loan. Which is not reportable income. 

Let us know what you find out when you bug your CPA. 

@Ryan Jones I am no expert on hard money - I only know the basics from exploring it myself, hopefully others chime in, or your best bet is simply to make phone calls to your RE network and guarantee you will find folks who know hard money guys (basically, find people with money who know other people with money, that's who hard money lenders are in a simple nutshell). Just start asking questions. Most of those deals can be laid out in one phone call. You then follow up with any paperwork required. 

I don't think an underlying hard money loan has anything to do with acquiring a standard cash-out refi loan. It is basically buying a property all cash, but the true cash is a behind the scenes investor. The conventional lender just needs you to meet the terms of their restrictions on the refi. I'd ask a pro like @Chris Mason to add color here. 

Terms always vary by the person, hard money, personal money, 8%, 12%, points up front (basically a cash down payment to buy the hard money loan), and length of the loan varies on the person. Some guys don't want short term loans, they don't make enough return for money lent. They want min 8-12 months on their cash to get big enough ROI to lend it. They will each have their own vetting process to know how worthy you are, and that likely affects the offer they give you. It is usually not a very formal process like you get from a bank.

I would start with all contacts you have in the supply chain of buying a home - agent, title guy, lenders etc. Folks in the business tend to accumulate lots of contacts up and down said business. I was working through a less common Reverse 1031 exchange and hard money was one option I had to consider to make it work. I got 2-3 solid hard money guys from my title rep of all people, he is super successful and hyper connected. Start there and I am positive you will get a few referrals. There are very few referral-heavy and focused industries as RE is, that is really the name of the game. Everyone wants a piece. 

don't even need to read the article Alan. didn't calculate out of thin air, but at this point we are all speculating, but let's keep arguing for fun. I met with my physician for an hour Monday. he is part owner of a very highly rated and respected sports medicine group, that was ultimately the deciding consultant for the recent cancellation of the 2020 BNP Paribas Open tennis tournament in Indian Wells CA. They didn't cancel out of fear of deaths or hysteria, but simply because no local hotel would sign up to be the quarantine spot. So, without a place to quarantine possible COVID patients, they had to cancel it. This is the main driver for most of the big event cancellations. No where to put the sick people, should they pop up. 

there is no argument that the US is simply unable to account for all the actual infected people. so numbers are skewed, and they are currently skewed to small numbers, which makes everything sound bigger than it is. one news site posted 300 sick 30 dead, a horrible ratio on paper. sorry dude, there are exponentially more than 300 people that have COVID in the US. there could be 300 just at amazon alone for all we know, they have 50000 employees in Seattle, then multiply by everyone those people came in contact with. 

anyways, back to hoarding my TP rolls ... 

For "many on BP" to not live through the great financial crisis Jay, which was 12-13 years ago, most responders in this thread would have to be under 13 years old. Is that really what you mean? That would be pretty incredible. My guess is the average age on this site is probably between 30-40 so yes, counter to your statement, most humans on this website lived through the GFC. And most were adults, not 7 years old, which I think is what you are actually alluding to. Unless you really believe most folks on this website were not alive 13 years ago. We all rode the same wave to get where we are today. :) :) 

We are currently not in, or entering another GFC. Unless there are tons of Bear Sterns & Lehman's hiding in the shadows with derivatives and subprime mortgage packages to drop on our heads?

The current numbers stated on TV regarding deaths and %'s are high simply because the US is not equipped to fully understand, calculate, and tally how many people have this virus. It can take weeks to affect you, and many healthy kids and adults may not feel any different then if they had a cold or a flu. And if you get one of those, are you really calling the hospital or your nearest TV station to report yourself? No. No one is. So the numbers are heavily skewed. There is no way there are only 300 or whatever cases of this in the US, there are probably thousands, maybe tens of thousands. So take the 10, 20, 30, whatever deaths and divide into a much larger pool of infected, and you get closer to the .001 or .002 % that closely resembles the flu. And does anyone really believe or trust China or any of the numbers they put out? The folks that tried to infect all our routers and modems and other computer gear and hack US computer systems? Hell no. This is a country (I've been there) that has a perpetual 365 day smog layer that makes LA's look like a bad cauliflower fart. You never see the sun in Shanghai. Most adults not only smoke, but chainsmoke while living totally unhealthy lives eating crap food. So sure, they will get sick faster and die in higher rates due to poor health. This does not directly correlate to what will happen to the US or any other country. 

Wash your hands, be smart, be careful, don't get on cruise ships or in big conference halls with reckless people. This will pass .. 

Thanks @Adam Gilbert, I think we should talk. Please PM me your info so we can chat offline before the week ends.

@Collin Hays most of what I am seeing gets pretty close to either the 1% or 10% rules, meaning a $700k house should generate $7k a month or $70k a year in gross revenue, or greater. 

If Adam can find me a $700k prop like @John D. describes, I am ready to go tomorrow! :)