All Forum Posts by: Yousif Abudra

@Sam Garner  Completely agree with @Brian Burke.  The models I use are built in house and have been refined over many iterations.  For example, I have a drop-down menu by state that automatically incorporates our default inputs by state when we are doing a quick screening of a deal.  If it looks interesting, we will of course validate each input as we dig deeper.

Additionally, our models can also consider ranges of inputs.  So, I can run the model based on low/mid/high values.  And then calculate an expected value based on the probabilities of those ranges occurring.  This is likely overkill for most, but if you have a background in decision analysis, it can be helpful.  Since we buy high vacancy / distressed properties with limited financial history, this can be extremely helpful as we gauge risk.  That way, we can run a version of the model that shows a conservative scenario, as well as a likely expected value scenario.  This helps immensely with making offers and negotiating on these types of properties.

@Kenley Law That is an appropriate analogy.  The fact is you don't!  They win because they are willing to sacrifice everything!

@Kenley Law "Reality" as defined by your agent's perception may be skewed. Be careful.

@Kenley Law  Get a new agent.  Now.  I don't care if they are your friend, aunt, cousin, relative, etc.  They are not fulfilling their fiduciary responsibility towards you.  I live in San Ramon and grew up in Santa Clara.  I know this market better than the back of my hand.  

Yes, people are doing very risky things in making offers today.  They are desperate to get into a house.  They will write offers with no contingencies, 3 day closes, free rent to sellers, all while maxing out their spending to get into a home.  Does that mean you need to do the same?  

Ask yourself this - if your offer of no contingencies gets accepted and you are unable to close, can you afford the hit? I assume you are putting in 3% EMD, which on that home is roughly $24k. Are you willing to risk 20% of your savings on this offer?  If you lose it, how much home will you qualify for if you now have a $96k down payment?  And how much harder will it be for you to compete?

If you need to buy a home today, you can do it by writing offers that retain your contingencies.  It is just harder and takes a bit longer.  But based on what you have written, your downside risk on this is high, so it had better be one you are willing to absorb if you are going to pursue it.

My advice: Get an agent that fulfills their duties to you as a client.  Write offers that you are comfortable with.  Getting an offer accepted looks like the finish line to you now - it is the starting line.  Structure your approach so that you get to the finish line intact - and happy.

@Erin Caldwell  It is a bit unclear exactly which type of situation you are asking about, but I will address the two options that I believe you might be considering:

Option 1: Buying an Investment Property (Not living in it) & Splitting the Down Payment with your friend

In this option, you can both be on the title as Tenants in Common, each with a specific % ownership. Or, you can form an entity such as an LLC which would be on the title - within the LLC, you can each have a % ownership but you can also identify a % profit split, which may be different than % ownership.

The distinctions between ownership and profit/loss distributions are important.  Because you may be doing all/most of the work and providing capital while they may be providing only capital.  In that case, it does not make sense to split profits evenly. 

Another factor to consider is who is taking out the loan.  If you are taking out the loan, and you are doing the work, and you are committing capital, then you are clearly taking much more risk and putting in much more investment to making the endeavor successful.  So an equal profit split makes much less sense.

Option 2: You will house hack the new property (live in it) & Split the Down Payment with your friend

See the last paragraph in Option 1 above.

Parting thoughts:

I VERY briefly covered a number of complex topics above.  If you have clarifying questions, feel free to ask.  Remember, capital is cheap and relatively easy to come by.  

Most everyone has some money laying around to "invest in real estate."  The real work comes from finding the deals, making them cash flow, improving the value, and delivering a successful outcome.  On top of that, merely accepting capital from others can put YOU on the hook for ensuring compliance with both state and federal securities laws if you are not careful and understand the requirements.  So don't give away your hard-earned profits so easily.

@Dominique Henderson

We are cash buyers for distressed and/or value-add multifamily properties under $700k. The higher the vacancy the better.

Any of the 48 contiguous states. Looking to close in Jan/Feb 2018.

E-mail me: Yousif at [email protected]

www.bena-capital.com

We are cash buyers for distressed and/or value-add multifamily properties under $700k. The higher the vacancy the better.

Any of the 48 contiguous states.  Looking to close in Jan/Feb 2018.

E-mail me: Yousif at [email protected]

www.bena-capital.com

@Jerry Shen None that I am aware of at this time.  Most institutions are opposed to bitcoin since it a) competes with their business model, and b) they haven't figured out how to make money off of it yet.

But most importantly, why would any investor accept payment in a currency that has such high fluctuation?  The entire point of a currency is a store of value.  That doesn't work well when the value of the currency changes significantly every day.  If bitcoin had less volatility, you would see wider acceptance in its use.  But today it is too new, too volatile, and institutions have absolutely no incentive to accept that risk.