All Forum Posts by: Tyler Kastelberg

@Michael De Rosa

Michael: I wish I had seen this before now! I stumbled upon a strategy that would work for your situation -- a more simplified version of a monetized installment sale. Do you still have a need for this?

@Jean Bolger

Jean: Did you end up going through with the monetized installment sale? How was your experience?  I recently stumbled upon a simplified version that achieves the same outcome. Let me know if you'd like me to elaborate.

@Genna Golden

Genna: Did you decide to go through with the monetized installment sale? How was your experience?

Cj McDougal CJ: You can definitely still execute a monetized installment sale if there is an outstanding loan. I know many SoCal investors who have used this strategy. The providers I know have a minimum sale size. How big is your sale?

@Tom De Moya

Tom: Without being hands on the deal, it's tough to advise you on how to re-invest the cash flow. The idea of an interest only loan is to give you the power of choice.

Best of luck! Let me know if I can be of any assistance.

@Tom De Moya

Tom: Based on what you shared, this looks like an interested deal. A few thoughts:

1) Vacancy: My gut tells me that you'll see more vacancy or "economic vacancy" than 5%. Economic vacancy takes into account bad debt on units that are leased.

2) Operating Expenses: I'd expect a 45% - 50% operating expense ratio on a "C class" asset like this. Make sure the seller's numbers are real. You might consider asking for his 2017 schedule E.

3) Seller Financing

a. Liens: Make sure the seller doesn't have other liens on the property that you might become responsible for at sale.

b. Terms: I'm a big fan of maximizing cash flow ... consider requesting an interest only loan with an early retirement clause. This will allow you to maximize cash flow and pay down the debt.

@Devrie M.

Devrie: I'm sure others can speak with more authority on this, but my understanding is that you won't have to worry about short term capital gains taxes on the sale (or installment sale) of this property because it was your personal residence, and your sale price is below the IRS threshold for taxable gains on a personal residence.

Best of luck!

@Rocky V.

Rocky: California investors are piling into markets like Dallas as foreign investors pile into Los Angeles and San Francisco. Valuations in primary, secondary, AND tertiary markets are at record highs. Until late, the low interest rate environment and monetary stimulus allowed for the compression of cap rates. However, interest rates are normalizing higher, and cap rates haven't responded ... yet.

My gut tells me it is time to let the market cool.

Property Managers: 

1) What are the biggest challenges for you in your business?

2) What are the most costly parts of your business?

3) What can investors do to make your life easier?

4) What can renters do to make your life easier?

@Hiro Kitagawa

Hiro: Your best bet is to google the City name and "Airbnb legislation." Best of luck!