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26 January 2025 | 51 replies
A 50/50 split, while not uncommon in the world of flipping, is very sponsor friendly, relative to the typical syndication which will typically start at 80/20 or 70/30 splits, with a vast majority of proceeds going to the LPs, along with a preferred return that gives them 100% of the cash flow up to a certain annualized return metric.
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5 January 2025 | 13 replies
@Tove Fox - Residential Real Estate InvestingPros:Lower Entry Costs: Easier to get started with less capital required.High Demand: People always need homes, making demand relatively stable.Easier Financing: Mortgages are generally easier to secure with favorable terms.Simplicity: Easier to understand and manage, especially for beginners.Flexibility: You can use it as a personal residence or rent it out.Cons:Tenant Turnover: More frequent turnover leads to vacancy and more management.Lower Cash Flow: Income potential can be modest compared to commercial properties.Emotional Buyers: Residential prices can be influenced by emotions, leading to price volatility.Maintenance Burden: Landlords often deal with repairs and maintenance, which can be time-consuming.Commercial Real Estate InvestingPros:Higher Income Potential: Stronger cash flow and higher returns are common.Long-Term Leases: Tenants often sign longer leases (3-10 years), reducing vacancy risk.Professional Tenants: Business tenants tend to take better care of the property.Valuation Based on Income: Prices are based on the income the property generates, not market emotions.Shared Costs: Tenants often cover property expenses like taxes, insurance, and maintenance (via triple-net leases).Cons:High Entry Costs: Requires more capital or partnerships to get started.Complex Management: More expertise is needed; you may need a professional property manager.Economic Sensitivity: Commercial properties are more sensitive to economic conditions.Challenging Financing: Securing financing can be harder, with stricter terms and higher interest rates.Zoning and Legalities: More complex regulations compared to residential properties.Key Differences:Risk: Residential tends to be lower risk, while commercial offers higher rewards but with greater risk.Management: Residential is easier for DIY investors, while commercial properties usually require a team.Scalability: Commercial properties are easier to scale, offering more potential for significant cash flow increases.
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2 January 2025 | 9 replies
While you might find a lender offering low down payment options, you'll still need cash reserves for repairs, maintenance, emergency fund (ideally 3-6 months of expenses), etc.
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11 January 2025 | 420 replies
The $51.56 interest to pay (see your previous post) is a monthly payment, not an annual payment.
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4 January 2025 | 11 replies
Some places do this annually, some places do a portion of the town every year giving them a total cycle of about every 4 years, and in my area it’s common to do a whole town reevaluation every 4-5 years.
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5 January 2025 | 18 replies
Significantly more negative when including vacancy, maintenance/cap ex, pm, misc.
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13 January 2025 | 19 replies
My last one was annually and $5k.
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15 January 2025 | 24 replies
While they typically have considerable deferred maintenance, we're getting great terms.
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2 January 2025 | 4 replies
Do you upcharge on maintenance?
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4 January 2025 | 11 replies
For example, I have a tenant portal where they can pay rent or submit maintenance requests.