All Forum Posts by: Willis Chur

@Willis Chur what makes me invest the time is quite simple. I am learning from the investors and buyers I work with... I have created sound relationships that allow me to learn while I am earning in this case  I am earning a commission eventually when a contract is accepted and closes. But what I am really earning is PRICELESS... that is the knowledge and experience... This is the very reason why I believe my self to be ready to flip, because I have learned how to run the numbers and know what to look for based on the criteria and walk through I have done with or for my clients. Also sales is exponential the more offers you place the more chances you have to seal a deal. 

I work with a few investors not all who claim to be an "investor," you have to have the ability to close not just claim to have the ability. For example In one month I helped to close 3 deals for one of my clients. I put in about 15 offers, but we got 3 to stick. I don't believe agents won't entertain your offers if you put in multiple offers, I think they don't care to look at the offers if they know you can't close or are a tire kicker, which in turn wastes their time and efforts. 

We also look for properties that are typically on the market for a year or longer. Those are the gems that we are looking for. 

I would suggest finding an agent who will invest the time to helping you make offers. I find good deals. My clients trust me. and I am always willing to help in any capacity. I love real estate and it isn't just a job. I am always willing to get dirty meaning if I have to pick up a paint brush to help out, that's what I will do.  I think those are the characteristics of an agent you need to look for. and also someone who is actively investing who can really give you some insight and advice.  Not all agents will do this, but you only need one or a few depending on how large you market is. 

Just my opinion. 

@Willis Chur , as others have mentioned, education and diversification are going to be key.

So what investments should one consider? 

The answer to this simple question is multifaceted - I shared my own experience and thought process in a blog post at https://www.biggerpockets.com/blogs/10305/67660-fi...

@Willis Chur You've got a ton of great advice from @Ian Ippolito and @Todd Dexheimer. To reiterate, 

1) education is the key. reading books (I have a whole library. need a link, PM me) and listening to podcast is as important as actually doing it as well as networking with other investors in your/your friend area of interest. real estate investing entails tons of niches, so finding the one (or several) that suit your and your friend's interests and goals is your primary objective and then concentrating on learning in detail about it.

2) diversification is a must. just like the old saying goes, don't put all eggs in one basket, especially since it's new to her. this entails, potentially splitting the funds between RE and the stock market (like mutual funds, etf's. consider using some robo advisers).

Good luck!

@Willis Chur  Has your friend considered Multi-family Syndication's?

Advantages = Scalability, economy of scale discounts, lower property management rates, easier to maintain than small multi-family, the more units, the safer and more efficient the project (in our opinion) We usually deal with 100 units + on each project, rarely exceeding 350 units.

Disadvantages = deal flow (hard to find properties in the domestic US with solid cap rates) We're shifting focus more heavily to Puerto Rico and the opportunities it currently presents.

If you or your friend have any additional questions feel free to reach out. I am more than happy to help.

As stated above, diversification among markets and asset types is critical right now in our skewed, late stage, cycle. Capital preservation should be top priority, and go from there. There are deals in multifamily and in certain markets, self storage, but you need to be careful and select your investments carefully. 

I would tell her to educate herself before making a decision. Also, I would tell her to keep it in a low interest account for 4-6 months before investing it. By doing that, it will be more real. Personally I would go all in on Multi-family investing because that is my specialty. For her though, diversification in RE and other asset classes would be best. I would suggest some passive in syndications, NNN leases, etc, and some active in her own property and the rest in stocks, metals, oil, etc

Considering you are posting in the MFR form, I think that a good starting point would be to get some sort of education for your friend.

perhaps get her to start reading a book, listening to podcasts and even attending a multifamily seminar / event

There is a good one coming up in Nashville in October, it is by the Wheelbarrow Profit team @Jake Stenziano and @Gino Barbaro . Many of us are going, so it would be great to catch up and learn more. she cant say she cant afford it!! Loll ;-)

@Willis Chur , a lot depends on her tolerance for risk. What's appropriate for an aggressive investor will look horrible to a conservative one (and vice versa).

I'll give you my perspective as a conservative investor. I have the majority of my real estate in unleveraged single-family rentals. A landmark study came out a year ago called "the Rate of Return of Everything", that for the first time analyzed stocks, bonds, and real estate returns from the 1830s. What it found is that unleveraged residential properties outperformed everything else on a risk-adjusted basis in both the historic and modern eras.

I believe we are late in the cycle, so my second largest allocation is in conservatively underwritten debt (no more than 65% LTV, first lien, only states that have a nonjudicial/cheaper foreclosure option). Conservatively underwritten debt is a safer portion of the capital stack because if the property fails to meet its debt payments, the investor forecloses and owns it (instead of losing everything after defaulting on the loan on an equity investment). I'm investing in BroadMark and Arixa and currently looking at IronBridge for an even more conservative option.

Then I have a smaller equity allocation to triple NNN leases. These have historically more similar to bonds than real estate (and produced higher returns with less volatility than bonds). I'm investing in BroadStoneNet lease for that. I also have a smaller amount in a very conservative multifamily syndicator (MG Properties) who has multiple cycle experience and has never lost money. They also put considerable skin in the game (often 18% plus). And I continue to look for other things as well if they fit: self storage, mobile homes, etc.