All Forum Posts by: Tyler Mullen

Welcome to BP Viviana,

Do you have any investments yet?

There are a few meetups and REIAs about, hope to run into you some time.  Take care!

There is more than one way to "partner", you can split the equity or use debt.  My advice would be for you go get some experience first, build up some assets/income on your own and then assess how you want to accelerate your investing.

Both have their pros & cons.  In order for you to figure out how you are comfortable in either scenario and what you value most, you need experience.

I also think this is your best course because you should never make any one investment big enough that if it goes to zero you're out of this game.  As you said you're just starting out, I think you would be wise to establish a base from which to then branch out.  For example, buy a 2-4 unit to move into and rent out the other units.  Do that for a year or two, see how much more capital you can build up.  You will learn plenty just doing that.

Should be same, with 4 might be possible to do a small portfolio commercial loan so it’s one app instead of 4.  Check around locally with smaller banks that do commercial lending and see what they have to offer.

@Lawrence Holloway Depends how you do it.  If you use a residential product there's a 6 month or more requirement for the property to be in your name and occupied.  If you go with a commercial product there can be no seasoning requirement and then your answer is as long as it takes to process the loan, 20-30 days usually.  Did one last fall, owned it for a week, loan complete within that range.

Your biggest advantage is youthful energy.  If only I had the resources I have now when I was 20 and able to work 18 hour days 6 days a week...

You have plenty of time to make up any losses so spend as little as you can in order to save/invest as much as you can, work hard and invest defensively so no one bad outcome can knock you out of the game.  Your goal should be lots of "base hits".

As others said, there's a risk of fraud at any age, but compared to 30 years ago, today it's much easier to check up on people, look up their reviews, look up their court records, property records... Travel is cheap, go look at their work, look at their deals, meet in person, get referrals.

Yes, buying a 2-4 unit first so you can get it for 3-5% down and start living CF positive asap.

Bonus pro tip: Assume in the future you will have an income so high that you can't legally contribute to a ROTH IRA anymore, consider starting one now while you still can.

Some property values here are appreciating at +-15% annually, why should rents be limited to 7% annual increase?  Should not the high rates should communicate, "build more here faster, there's lots of demand."?   I don't get it, if you cap it isn't that message muted or reversed?  If the limit is 7% and the market would otherwise make it 12% without a cap, then what happens?

@Eric Sipe

Assume two people have very similar long term goals and equal cash to put in, but strong opinions that differ on elements or processes in the functioning of the day to day business.

In that case it might be better for whoever wants to be the active manager to issue a note and borrow the same funds, then be 100% in charge of management decisions.

Think of it like this: you get a loan from a bank to start a business, they give you the money and leave you alone as long as your covenants and payments are proper.... Take on a 50% equity partner, they have the same say as you in everything, all day long, every little detail, even if you think the way they demand it be done is totally wrong.  Even if roles and events are defined in your written agreement it won’t cover everything, trust me.

PM if that doesn’t make sense and you’d like to hear the nitty gritty of a real world example.

Partnering can work great but just be aware you’ll need to do far more meeting and reviewing ahead of time, and in far more detail than you might realize, on who does what, on what will happen and when and why.

@Eric Sipe

Consider doing it through a debt setup?  That can simplify some of the issues that commonly torpedo partnerships/LLCs.

I second @John P. - need to verify court records, does this person appear with lots of judgements, anything on the criminal side?

What other properties do they own or manage?  Go physically look at those properties.  Verify their ownership independently.  Look for clues of things that would have to be if the story is true.  For example, if they own/manage 1000 units and they haven’t ever filed, much less completed, an eviction, that just makes no sense, no one’s that good at tenant screening.

@Jacob Rickel

If I had your set of circumstances I would buy the best 2-4 unit I could find within next 30 days. Something that doesn’t need a lot of in depth repairs, just paint carpet and fixtures, if anything at all. Try to be within 30-75 minute commute to a DT area.

Get all the units rented. Slowly fix things up.

Don't worry about the 20% down, you can refi to eliminate PMI in a few years, that is if you don't sell outright due to your massive profits you'll be rolling into a 20 unit.