All Forum Posts by: Wade G.

@Drew Shirley

I have no idea what one might do with the money.  I admit that my own ignorance of how a syndication is set up may feed into my fear.  People have been known to kill other people for petty life insurance policies.  My point is that people sometimes do strange things when money is involved.  I can tell you that I would never invest in a deal unless the lead investor had significant skin in the game.

My biggest concern is investing money with a group of people that I don't really know and especially with a lead investor that I will have just recently met. Even if the lead has a proven track record I still have no way of evaluating that persons historical moral code. People sometimes tend to make odd decisions when large sums of money are involved. Personally I can't imagine being a lead because of the huge responsibility of managing other peoples money. If I lost their money I don't know how I would handle it. This topic is very timely for me because I have just recently given myself about six months to decide whether I want to buy more SFH or place the funds into a syndication.

I am a member at the lower level.  In my opinion the two day is a great eye opener.  I would say it helped me get the right mind set for buying and managing my SFHs.  Currently trying to convince myself that the PIG membership is worth it...I have not convinced myself yet.  Its not the 20k that is such a big deal, its putting a 100k or so into a deal with a lead investor, and other passive investors, that I just met six months ago.  I have a hard time overcoming that idea...I just don't typically trust people especially when money is involved.

I have not ever bought a property from them but I got on their email list years ago.  I got discouraged when they had a property I was interested in so I did my due diligence.  I had a realtor pull the comps and compare it to their comps provided on the email.  The comps they provided were cherry picked and only represented the higher sales.  Also, their comps were not even in the same neighborhood.  They used the comps from a higher value neighborhood in the area.

In case it was a fluke I tested their comps again on another house.  Once again my realtor comps gave me all the comps in the immediate neighborhood but Networth comps were cherry picked and all over the place.

I guess its like any other possible deal though, you have to do your own due diligence. Usually when I buy I pay very little attention to the asking price. I figure out ARV minus all costs involved and that is what I can offer. If someone else will offer more then so be it.

Having said all of the above I will say that they were offering a house a couple of months ago in a neighborhood where I have two rentals so I know the values.  Their asking price was in line with what it probably should have been as long as the repair estimate was accurate.  I didn't check their comps though.  Maybe its just hit or miss...I don't really know.

I had a 2/1 , 934 square feet, and had a whole new system including duct work replaced for 3k but that was back in 2009.  I hate to say this but this expense should really come as no surprise since the unit is 30 years old.  Its just part of the business.  Ample reserves is the key, then when repairs like this happen its easy just to pay for it to be replaced and get on with life.  I would suck it up and get a nice new system that will be worry free for several years.  When you start cutting corners and replacing things with sub par equipment you are then knocking on the door of becoming a slumlord.  I'm not saying you are a slumlord but when you skimp on repairs before you know it your property becomes something an investor would buy for pennies on the dollar.

Since you live in Texas you should pay off your primary residence.  Reason why is simple asset protection.  Your primary is homesteaded in Texas so it is somewhat protected from lawsuits.  Probably need to consult an attorney to find out to what extent it would be protected from lawsuits.  Even with all the insurance you can buy your rentals are open targets to an attorney especially is they are paid off. 

Just looking for feedback about this club.  I'm not interested in the RICH Club and I'm currently a member of LU.  Thought about Right Path RE club but they seem to be geared toward flipping.  I like buy and hold.

I was never comfortable unless I had at least 10k in reserves and that was when I just had one property.  When I added another property I wanted to have another 5k reserves.  When I reached the 20k level I was pretty comfortable even with several properties.  To me reserves takes the risk out of leverage.  I also had money I could get from a Roth IRA or from a fast signature loan at the credit union if ever needed.  When Hurricane Ike hit several years ago I had to get three new roofs, a lot of new wooden fencing and some interior work done due to the leaking water from one of the destroyed roofs.  I could not wait for insurance so I used the reserves to get the work done as fast as possible and got reimbursed by the insurance company way later.  I'm probably over conservative but I don't like stressing over money.

I currently have two different tenants that would like to purchase houses from me.  It seems like a good scenario since I would not have to pay realtor fees, a make ready, or downtime as I would through a regular sale.  Some people like to keep the houses forever, some sell them often.  Then by selling becomes the problem of putting the money back to work.  It's not exactly the best time to be buying.

I am selling one of my rentals and the tax consequences will be about 10k, so I can exit this property with 40k or 50k depending on what I do.  Due to the high RE market right now I have no idea if I will be able to meet the time requirements for the 1031.  I tend to make bad decisions so would you 1031 or just pay the taxes now?  I do intend to reinvest the money in some form of RE.  Kind of wish I would have just refi rather than sell.