If you had $1M, how would you invest it?
Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes
If you had $1M, how would you invest it?
Most Popular Reply
V.G JasonPro Member
Investor · Member since 2022 · 3k+ posts · 3k+ votesQuote from @Austin Fowler:
Quote from @V.G Jason:
Two chicks at the same time, man.
It just depends on where you're starting. Someone nothing that doesn't know money; better of paying all consumer debt, buying a house cash, and living simply with any leftover in some form of equities & gold. Someone with a REI background, likely lower LTV higher quality properties in areas they like.
I don't "chase" return percentage. You don't control the outputs, just the inputs. Focus on that.
$1m doesn't really move the needle--continue doing what I am doing seeking value add properties in Austin, Phoenix if we're talking strictly REI at the SF level with personal portfolio.
Otherwise, seeking high quality commercial 2-3 unit location in Utah, AZ, or NV, to add a Culver's and rent out the two other units in the FO portfolio. Ideally sub 40% LTV.
Totally irrelevant, because I don't matter. And those metrics don't matter. What everyone does will be so individual.
My advice about the folks that know nothing is for the 97-99% of folks on here; pay down consumer debt, buy your primary house full cash, invest in "passive" stuff like 60% etfs, 10% gold, 30% bitcoin and relax. You're not cut out for this new "high" rate era with extreme dollar devaluation coupled with housing scarcity, you're being pushed out. Embrace and it play some offense, not defense, and try to beat the dollar devaluation.
67 Replies
- Investor · NJ · Member since 2024 · 36 posts · 22 votes1y
Hi Austin. My current strategy includes investing in multifamily syndications and single family rentals. While syndications are very hands off I do like owning an asset that produces income. My main concern about syndications is that they feel much less liquid and while some of them have high upside potential I plan to hold both asset types across markets for diversification.
I have been recently looking at linear markets like northeast OH and west PA. What are your thoughts on these?
- Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes1y
Quote from @Jakub R.:
Hi Austin. My current strategy includes investing in multifamily syndications and single family rentals. While syndications are very hands off I do like owning an asset that produces income. My main concern about syndications is that they feel much less liquid and while some of them have high upside potential I plan to hold both asset types across markets for diversification.
I have been recently looking at linear markets like northeast OH and west PA. What are your thoughts on these?
Hi Jakub, I also like mixing single-family long-term rentals with passive multifamily. I don’t personally focus on specific markets, rather I like diversity. I have assets in AL, AR, CA, FL, GA, IL, IN, MA, MO, MS, OH, OK, PA, TN, TX, WA, and additional assets in Australia, Canada, and Brazil. When it comes to single-family, I like cash flow, so I’m not buying at the moment because both prices and interest rates are too high relative to rents. When it comes to multifamily, my due diligence starts with the operator. I like publicly discoverable operators that you can find easily with a Google search, managing hundreds of millions to a few billion in assets, with a focus on single assets, not funds, at least 10 years of experience in their current form, at least 10 buildings taken full cycle, an excellent track record of delivering outstanding investor returns throughout their history, and deals on offer that are similar to the deals they have completed successful. I like ground-up development, particularly affordable housing, and my ideal deal is building the last multifamily community in an otherwise built out and bustling neighborhood with lots of entertainment, transport, and employment diversity.
- 1yV.G JasonPro MemberInvestor · Member since 2022 · 3k+ posts · 3k+ votes
Quote from @Austin Fowler:
Quote from @Jakub R.:
Hi Austin. My current strategy includes investing in multifamily syndications and single family rentals. While syndications are very hands off I do like owning an asset that produces income. My main concern about syndications is that they feel much less liquid and while some of them have high upside potential I plan to hold both asset types across markets for diversification.
I have been recently looking at linear markets like northeast OH and west PA. What are your thoughts on these?
Hi Jakub, I also like mixing single-family long-term rentals with passive multifamily. I don’t personally focus on specific markets, rather I like diversity. I have assets in AL, AR, CA, FL, GA, IL, IN, MA, MO, MS, OH, OK, PA, TN, TX, WA, and additional assets in Australia, Canada, and Brazil. When it comes to single-family, I like cash flow, so I’m not buying at the moment because both prices and interest rates are too high relative to rents. When it comes to multifamily, my due diligence starts with the operator. I like publicly discoverable operators that you can find easily with a Google search, managing hundreds of millions to a few billion in assets, with a focus on single assets, not funds, at least 10 years of experience in their current form, at least 10 buildings taken full cycle, an excellent track record of delivering outstanding investor returns throughout their history, and deals on offer that are similar to the deals they have completed successful. I like ground-up development, particularly affordable housing, and my ideal deal is building the last multifamily community in an otherwise built out and bustling neighborhood with lots of entertainment, transport, and employment diversity.
You're the one raises capital then buys turnkey and "guarantees" 8% return if I remember correctly? I remember this as I joined this forum with fractional reserve banking.
Is this a disguised thread to raise capital again?
- Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes1y
Quote from @V.G Jason:
Quote from @Austin Fowler:
Quote from @Jakub R.:
Hi Austin. My current strategy includes investing in multifamily syndications and single family rentals. While syndications are very hands off I do like owning an asset that produces income. My main concern about syndications is that they feel much less liquid and while some of them have high upside potential I plan to hold both asset types across markets for diversification.
I have been recently looking at linear markets like northeast OH and west PA. What are your thoughts on these?
Hi Jakub, I also like mixing single-family long-term rentals with passive multifamily. I don’t personally focus on specific markets, rather I like diversity. I have assets in AL, AR, CA, FL, GA, IL, IN, MA, MO, MS, OH, OK, PA, TN, TX, WA, and additional assets in Australia, Canada, and Brazil. When it comes to single-family, I like cash flow, so I’m not buying at the moment because both prices and interest rates are too high relative to rents. When it comes to multifamily, my due diligence starts with the operator. I like publicly discoverable operators that you can find easily with a Google search, managing hundreds of millions to a few billion in assets, with a focus on single assets, not funds, at least 10 years of experience in their current form, at least 10 buildings taken full cycle, an excellent track record of delivering outstanding investor returns throughout their history, and deals on offer that are similar to the deals they have completed successful. I like ground-up development, particularly affordable housing, and my ideal deal is building the last multifamily community in an otherwise built out and bustling neighborhood with lots of entertainment, transport, and employment diversity.
You're the one raises capital then buys turnkey and "guarantees" 8% return if I remember correctly? I remember this as I joined this forum with fractional reserve banking.
Is this a disguised thread to raise capital again?
Hi V.G, this thread is all about getting ways of investing that work now discussed openly. No more, no less.
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes1y
Quote from @V.G Jason:
Quote from @Austin Fowler:
Quote from @Jakub R.:
Hi Austin. My current strategy includes investing in multifamily syndications and single family rentals. While syndications are very hands off I do like owning an asset that produces income. My main concern about syndications is that they feel much less liquid and while some of them have high upside potential I plan to hold both asset types across markets for diversification.
I have been recently looking at linear markets like northeast OH and west PA. What are your thoughts on these?
Hi Jakub, I also like mixing single-family long-term rentals with passive multifamily. I don’t personally focus on specific markets, rather I like diversity. I have assets in AL, AR, CA, FL, GA, IL, IN, MA, MO, MS, OH, OK, PA, TN, TX, WA, and additional assets in Australia, Canada, and Brazil. When it comes to single-family, I like cash flow, so I’m not buying at the moment because both prices and interest rates are too high relative to rents. When it comes to multifamily, my due diligence starts with the operator. I like publicly discoverable operators that you can find easily with a Google search, managing hundreds of millions to a few billion in assets, with a focus on single assets, not funds, at least 10 years of experience in their current form, at least 10 buildings taken full cycle, an excellent track record of delivering outstanding investor returns throughout their history, and deals on offer that are similar to the deals they have completed successful. I like ground-up development, particularly affordable housing, and my ideal deal is building the last multifamily community in an otherwise built out and bustling neighborhood with lots of entertainment, transport, and employment diversity.
You're the one raises capital then buys turnkey and "guarantees" 8% return if I remember correctly? I remember this as I joined this forum with fractional reserve banking.
Is this a disguised thread to raise capital again?
He got me...... I hadn't noticed this at all, wow..... I shouldn't feel dumb for falling for it, what I shared is valid and true but I do feel dumb for falling for it.... The 1 time I don't research the poster before reply........
- 1yJoe S.Pro MemberInvestor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
Quote from @James Hamling:
Quote from @V.G Jason:
Quote from @Austin Fowler:
Quote from @Jakub R.:
Hi Austin. My current strategy includes investing in multifamily syndications and single family rentals. While syndications are very hands off I do like owning an asset that produces income. My main concern about syndications is that they feel much less liquid and while some of them have high upside potential I plan to hold both asset types across markets for diversification.
I have been recently looking at linear markets like northeast OH and west PA. What are your thoughts on these?
Hi Jakub, I also like mixing single-family long-term rentals with passive multifamily. I don’t personally focus on specific markets, rather I like diversity. I have assets in AL, AR, CA, FL, GA, IL, IN, MA, MO, MS, OH, OK, PA, TN, TX, WA, and additional assets in Australia, Canada, and Brazil. When it comes to single-family, I like cash flow, so I’m not buying at the moment because both prices and interest rates are too high relative to rents. When it comes to multifamily, my due diligence starts with the operator. I like publicly discoverable operators that you can find easily with a Google search, managing hundreds of millions to a few billion in assets, with a focus on single assets, not funds, at least 10 years of experience in their current form, at least 10 buildings taken full cycle, an excellent track record of delivering outstanding investor returns throughout their history, and deals on offer that are similar to the deals they have completed successful. I like ground-up development, particularly affordable housing, and my ideal deal is building the last multifamily community in an otherwise built out and bustling neighborhood with lots of entertainment, transport, and employment diversity.
You're the one raises capital then buys turnkey and "guarantees" 8% return if I remember correctly? I remember this as I joined this forum with fractional reserve banking.
Is this a disguised thread to raise capital again?
He got me...... I hadn't noticed this at all, wow..... I shouldn't feel dumb for falling for it, what I shared is valid and true but I do feel dumb for falling for it.... The 1 time I don't research the poster before reply........
You gave a good rundown James so leave it like that. ✅
- 1yJoe S.Pro MemberInvestor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
Quote from @Austin Fowler:
Quote from @Jakub R.:
Hi Austin. My current strategy includes investing in multifamily syndications and single family rentals. While syndications are very hands off I do like owning an asset that produces income. My main concern about syndications is that they feel much less liquid and while some of them have high upside potential I plan to hold both asset types across markets for diversification.
I have been recently looking at linear markets like northeast OH and west PA. What are your thoughts on these?
Hi Jakub, I also like mixing single-family long-term rentals with passive multifamily. I don’t personally focus on specific markets, rather I like diversity. I have assets in AL, AR, CA, FL, GA, IL, IN, MA, MO, MS, OH, OK, PA, TN, TX, WA, and additional assets in Australia, Canada, and Brazil. When it comes to single-family, I like cash flow, so I’m not buying at the moment because both prices and interest rates are too high relative to rents. When it comes to multifamily, my due diligence starts with the operator. I like publicly discoverable operators that you can find easily with a Google search, managing hundreds of millions to a few billion in assets, with a focus on single assets, not funds, at least 10 years of experience in their current form, at least 10 buildings taken full cycle, an excellent track record of delivering outstanding investor returns throughout their history, and deals on offer that are similar to the deals they have completed successful. I like ground-up development, particularly affordable housing, and my ideal deal is building the last multifamily community in an otherwise built out and bustling neighborhood with lots of entertainment, transport, and employment diversity.
I have assets in AL, AR, CA, FL, GA, IL, IN, MA, MO, MS, OH, OK, PA, TN, TX, WA, and additional assets in Australia, Canada, and Brazil.
I did not realize you were so big time Austin. 😊
- 1yDoug SmithPro MemberLender · Tampa, FL · Member since 2013 · 2k+ posts · 2k+ votes
I hate to shoot myself in the foot as a lender as well as an investor, but I would keep the leverage lower. Injecting more cash into the deal keeps the interest costs lower and give you more flexibility with the exit strategy. I know people like to put as little down as possible, but on a flip or spec built, interest costs can eat you up. On a rental, higher interest costs can erode cash flow. Having more equity in a deal also give you more options should things go South and you need to exit. During the 2007/2008 crash, real estate dropped by 19% on average of purchased at the high and had to sell at the low. Less leverage and more equity gives you more options for escape in a pinch and improves the likelihood of profit. Yes, your cash-on-cash percentage might be less, but so is your risk. That's my 2 cents anyway.
- Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes1y
Quote from @Doug Smith:
I hate to shoot myself in the foot as a lender as well as an investor, but I would keep the leverage lower. Injecting more cash into the deal keeps the interest costs lower and give you more flexibility with the exit strategy. I know people like to put as little down as possible, but on a flip or spec built, interest costs can eat you up. On a rental, higher interest costs can erode cash flow. Having more equity in a deal also give you more options should things go South and you need to exit. During the 2007/2008 crash, real estate dropped by 19% on average of purchased at the high and had to sell at the low. Less leverage and more equity gives you more options for escape in a pinch and improves the likelihood of profit. Yes, your cash-on-cash percentage might be less, but so is your risk. That's my 2 cents anyway.
Thanks Doug, can you elaborate on what you would actually buy? In my own case, the focus is multifamily and flips, so returns in the 20% to 40% range on capital depending how active I am. What type of assets would you acquire? What would the numbers look like? What would your return on capital be? What could you make that $1M grow into?
- 1yDoug SmithPro MemberLender · Tampa, FL · Member since 2013 · 2k+ posts · 2k+ votes
Quote from @Austin Fowler:
Quote from @Doug Smith:
I hate to shoot myself in the foot as a lender as well as an investor, but I would keep the leverage lower. Injecting more cash into the deal keeps the interest costs lower and give you more flexibility with the exit strategy. I know people like to put as little down as possible, but on a flip or spec built, interest costs can eat you up. On a rental, higher interest costs can erode cash flow. Having more equity in a deal also give you more options should things go South and you need to exit. During the 2007/2008 crash, real estate dropped by 19% on average of purchased at the high and had to sell at the low. Less leverage and more equity gives you more options for escape in a pinch and improves the likelihood of profit. Yes, your cash-on-cash percentage might be less, but so is your risk. That's my 2 cents anyway.
Thanks Doug, can you elaborate on what you would actually buy? In my own case, the focus is multifamily and flips, so returns in the 20% to 40% range on capital depending how active I am. What type of assets would you acquire? What would the numbers look like? What would your return on capital be? What could you make that $1M grow into?
As lenders, we broker most of what we do, but we will lend on shorter-term, lower-LTV deals or transactionally fund with the capital, provided we can get comfortable with the property, the parties, and the closing agent. Again, we stick with lower LTVs on that and the "c-buyer" has to be in place and they have to wire their EMD in to the closing agent "hard" prior to us funding. As investors, we originally did a lot of flips, but most of what we do now are higher-end ground-up spec construction. We don't buy and hold unless we can sell a property in a reasonable time period. Not that there's anything wrong with it. We've found we're just really good with the ground-up spec between $1 million and 3 $3 million in as-completed value.
- Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes1yHow much does it cost you to build a spec home with a sale price in the $1M to $3M range? How much of your own capital do you need to put in?
Quote from @Doug Smith:
Quote from @Austin Fowler:
Quote from @Doug Smith:
I hate to shoot myself in the foot as a lender as well as an investor, but I would keep the leverage lower. Injecting more cash into the deal keeps the interest costs lower and give you more flexibility with the exit strategy. I know people like to put as little down as possible, but on a flip or spec built, interest costs can eat you up. On a rental, higher interest costs can erode cash flow. Having more equity in a deal also give you more options should things go South and you need to exit. During the 2007/2008 crash, real estate dropped by 19% on average of purchased at the high and had to sell at the low. Less leverage and more equity gives you more options for escape in a pinch and improves the likelihood of profit. Yes, your cash-on-cash percentage might be less, but so is your risk. That's my 2 cents anyway.
Thanks Doug, can you elaborate on what you would actually buy? In my own case, the focus is multifamily and flips, so returns in the 20% to 40% range on capital depending how active I am. What type of assets would you acquire? What would the numbers look like? What would your return on capital be? What could you make that $1M grow into?
As lenders, we broker most of what we do, but we will lend on shorter-term, lower-LTV deals or transactionally fund with the capital, provided we can get comfortable with the property, the parties, and the closing agent. Again, we stick with lower LTVs on that and the "c-buyer" has to be in place and they have to wire their EMD in to the closing agent "hard" prior to us funding. As investors, we originally did a lot of flips, but most of what we do now are higher-end ground-up spec construction. We don't buy and hold unless we can sell a property in a reasonable time period. Not that there's anything wrong with it. We've found we're just really good with the ground-up spec between $1 million and 3 $3 million in as-completed value.
- 1yDoug SmithPro MemberLender · Tampa, FL · Member since 2013 · 2k+ posts · 2k+ votes
Quote from @Austin Fowler:
How much does it cost you to build a spec home with a sale price in the $1M to $3M range? How much of your own capital do you need to put in?Quote from @Doug Smith:
Quote from @Austin Fowler:
Quote from @Doug Smith:
I hate to shoot myself in the foot as a lender as well as an investor, but I would keep the leverage lower. Injecting more cash into the deal keeps the interest costs lower and give you more flexibility with the exit strategy. I know people like to put as little down as possible, but on a flip or spec built, interest costs can eat you up. On a rental, higher interest costs can erode cash flow. Having more equity in a deal also give you more options should things go South and you need to exit. During the 2007/2008 crash, real estate dropped by 19% on average of purchased at the high and had to sell at the low. Less leverage and more equity gives you more options for escape in a pinch and improves the likelihood of profit. Yes, your cash-on-cash percentage might be less, but so is your risk. That's my 2 cents anyway.
Thanks Doug, can you elaborate on what you would actually buy? In my own case, the focus is multifamily and flips, so returns in the 20% to 40% range on capital depending how active I am. What type of assets would you acquire? What would the numbers look like? What would your return on capital be? What could you make that $1M grow into?
As lenders, we broker most of what we do, but we will lend on shorter-term, lower-LTV deals or transactionally fund with the capital, provided we can get comfortable with the property, the parties, and the closing agent. Again, we stick with lower LTVs on that and the "c-buyer" has to be in place and they have to wire their EMD in to the closing agent "hard" prior to us funding. As investors, we originally did a lot of flips, but most of what we do now are higher-end ground-up spec construction. We don't buy and hold unless we can sell a property in a reasonable time period. Not that there's anything wrong with it. We've found we're just really good with the ground-up spec between $1 million and 3 $3 million in as-completed value.
Southern CA is not one of the places we build. We usually stick to FL and GA, so I am sure the build costs are dramatically different. The cost per sf really depends on the house your building, the finishes, where you are building and site work. For instance, if you're building on a mountain in GA, on the ocean, or on a nice grassy plot inland, the prep is going to be very, very different.
- 1yV.G JasonPro MemberInvestor · Member since 2022 · 3k+ posts · 3k+ votes
Two chicks at the same time, man.
It just depends on where you're starting. Someone nothing that doesn't know money; better of paying all consumer debt, buying a house cash, and living simply with any leftover in some form of equities & gold. Someone with a REI background, likely lower LTV higher quality properties in areas they like.
I don't "chase" return percentage. You don't control the outputs, just the inputs. Focus on that.
- Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes1ySure but the question is about you, not others. What would you do with a $1M? What type of investing do you know how to do?
Quote from @V.G Jason:
Two chicks at the same time, man.
It just depends on where you're starting. Someone nothing that doesn't know money; better of paying all consumer debt, buying a house cash, and living simply with any leftover in some form of equities & gold. Someone with a REI background, likely lower LTV higher quality properties in areas they like.
I don't "chase" return percentage. You don't control the outputs, just the inputs. Focus on that.
- Rental Property Investor · New Braunfels, TX · Member since 2021 · 289 posts · 256 votes1yYou crack me up😁
Quote from @V.G Jason:
Two chicks at the same time, man.
- 1yV.G JasonPro MemberInvestor · Member since 2022 · 3k+ posts · 3k+ votes
Quote from @Austin Fowler:
Sure but the question is about you, not others. What would you do with a $1M? What type of investing do you know how to do?Quote from @V.G Jason:
Two chicks at the same time, man.
It just depends on where you're starting. Someone nothing that doesn't know money; better of paying all consumer debt, buying a house cash, and living simply with any leftover in some form of equities & gold. Someone with a REI background, likely lower LTV higher quality properties in areas they like.
I don't "chase" return percentage. You don't control the outputs, just the inputs. Focus on that.
$1m doesn't really move the needle--continue doing what I am doing seeking value add properties in Austin, Phoenix if we're talking strictly REI at the SF level with personal portfolio.
Otherwise, seeking high quality commercial 2-3 unit location in Utah, AZ, or NV, to add a Culver's and rent out the two other units in the FO portfolio. Ideally sub 40% LTV.
Totally irrelevant, because I don't matter. And those metrics don't matter. What everyone does will be so individual.My advice about the folks that know nothing is for the 97-99% of folks on here; pay down consumer debt, buy your primary house full cash, invest in "passive" stuff like 60% etfs, 10% gold, 30% bitcoin and relax. You're not cut out for this new "high" rate era with extreme dollar devaluation coupled with housing scarcity, you're being pushed out. Embrace and it play some offense, not defense, and try to beat the dollar devaluation.
- 1yRemington LymanBusiness MemberReal Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
Quote from @V.G Jason:
Quote from @Austin Fowler:
Sure but the question is about you, not others. What would you do with a $1M? What type of investing do you know how to do?Quote from @V.G Jason:
Two chicks at the same time, man.
It just depends on where you're starting. Someone nothing that doesn't know money; better of paying all consumer debt, buying a house cash, and living simply with any leftover in some form of equities & gold. Someone with a REI background, likely lower LTV higher quality properties in areas they like.
I don't "chase" return percentage. You don't control the outputs, just the inputs. Focus on that.
$1m doesn't really move the needle--continue doing what I am doing seeking value add properties in Austin, Phoenix if we're talking strictly REI at the SF level with personal portfolio.
Otherwise, seeking high quality commercial 2-3 unit location in Utah, AZ, or NV, to add a Culver's and rent out the two other units in the FO portfolio. Ideally sub 40% LTV.
Totally irrelevant, because I don't matter. And those metrics don't matter. What everyone does will be so individual.My advice about the folks that know nothing is for the 97-99% of folks on here; pay down consumer debt, buy your primary house full cash, invest in "passive" stuff like 60% etfs, 10% gold, 30% bitcoin and relax. You're not cut out for this new "high" rate era with extreme dollar devaluation coupled with housing scarcity, you're being pushed out. Embrace and it play some offense, not defense, and try to beat the dollar devaluation.
facts
- 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @V.G Jason:
Quote from @Austin Fowler:
Sure but the question is about you, not others. What would you do with a $1M? What type of investing do you know how to do?Quote from @V.G Jason:
Two chicks at the same time, man.
It just depends on where you're starting. Someone nothing that doesn't know money; better of paying all consumer debt, buying a house cash, and living simply with any leftover in some form of equities & gold. Someone with a REI background, likely lower LTV higher quality properties in areas they like.
I don't "chase" return percentage. You don't control the outputs, just the inputs. Focus on that.
$1m doesn't really move the needle--continue doing what I am doing seeking value add properties in Austin, Phoenix if we're talking strictly REI at the SF level with personal portfolio.
Otherwise, seeking high quality commercial 2-3 unit location in Utah, AZ, or NV, to add a Culver's and rent out the two other units in the FO portfolio. Ideally sub 40% LTV.
Totally irrelevant, because I don't matter. And those metrics don't matter. What everyone does will be so individual.My advice about the folks that know nothing is for the 97-99% of folks on here; pay down consumer debt, buy your primary house full cash, invest in "passive" stuff like 60% etfs, 10% gold, 30% bitcoin and relax. You're not cut out for this new "high" rate era with extreme dollar devaluation coupled with housing scarcity, you're being pushed out. Embrace and it play some offense, not defense, and try to beat the dollar devaluation.
DAve Ramsey advice nothing wrong with this route at all. - 1yV.G JasonPro MemberInvestor · Member since 2022 · 3k+ posts · 3k+ votesRamsey would scoff at Bitcoin.
Quote from @Jay Hinrichs:
Quote from @V.G Jason:
Quote from @Austin Fowler:
Sure but the question is about you, not others. What would you do with a $1M? What type of investing do you know how to do?Quote from @V.G Jason:
Two chicks at the same time, man.
It just depends on where you're starting. Someone nothing that doesn't know money; better of paying all consumer debt, buying a house cash, and living simply with any leftover in some form of equities & gold. Someone with a REI background, likely lower LTV higher quality properties in areas they like.
I don't "chase" return percentage. You don't control the outputs, just the inputs. Focus on that.
$1m doesn't really move the needle--continue doing what I am doing seeking value add properties in Austin, Phoenix if we're talking strictly REI at the SF level with personal portfolio.
Otherwise, seeking high quality commercial 2-3 unit location in Utah, AZ, or NV, to add a Culver's and rent out the two other units in the FO portfolio. Ideally sub 40% LTV.
Totally irrelevant, because I don't matter. And those metrics don't matter. What everyone does will be so individual.My advice about the folks that know nothing is for the 97-99% of folks on here; pay down consumer debt, buy your primary house full cash, invest in "passive" stuff like 60% etfs, 10% gold, 30% bitcoin and relax. You're not cut out for this new "high" rate era with extreme dollar devaluation coupled with housing scarcity, you're being pushed out. Embrace and it play some offense, not defense, and try to beat the dollar devaluation.
DAve Ramsey advice nothing wrong with this route at all.But yes debt free, passive investing.
- 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @V.G Jason:
Ramsey would scoff at Bitcoin.Quote from @Jay Hinrichs:
Quote from @V.G Jason:
Quote from @Austin Fowler:
Sure but the question is about you, not others. What would you do with a $1M? What type of investing do you know how to do?Quote from @V.G Jason:
Two chicks at the same time, man.
It just depends on where you're starting. Someone nothing that doesn't know money; better of paying all consumer debt, buying a house cash, and living simply with any leftover in some form of equities & gold. Someone with a REI background, likely lower LTV higher quality properties in areas they like.
I don't "chase" return percentage. You don't control the outputs, just the inputs. Focus on that.
$1m doesn't really move the needle--continue doing what I am doing seeking value add properties in Austin, Phoenix if we're talking strictly REI at the SF level with personal portfolio.
Otherwise, seeking high quality commercial 2-3 unit location in Utah, AZ, or NV, to add a Culver's and rent out the two other units in the FO portfolio. Ideally sub 40% LTV.
Totally irrelevant, because I don't matter. And those metrics don't matter. What everyone does will be so individual.My advice about the folks that know nothing is for the 97-99% of folks on here; pay down consumer debt, buy your primary house full cash, invest in "passive" stuff like 60% etfs, 10% gold, 30% bitcoin and relax. You're not cut out for this new "high" rate era with extreme dollar devaluation coupled with housing scarcity, you're being pushed out. Embrace and it play some offense, not defense, and try to beat the dollar devaluation.
DAve Ramsey advice nothing wrong with this route at all.But yes debt free, passive investing.
I know on the ramp up for all but those that basically inherited wealth debt is necessary. But boy does it feel good to have paid off assets or very little debt.. Most of the wealthiest investors that I work with or have known have very little to any long term debt everything is paid for. 3 I can think of One sold his garbage company for 75 mil.. the other was a President of a fortune 100 company that when it went public he got major golden parachute liquidity event.. then another was inherited but all the Real Estate was paid for and there is a boat load of it.. I met those folks when i brokered a 5 mil dollar MF to them in the mid 2000s and I was shocked they were not going to get a loan.. :)
- 1yTheresa HarrisPro MemberMember since 2019 · 15k+ posts · 11k+ votes
Honestly with current interest rates and housing prices, I'd put it in a high yield savings account.
- Shawnee Mission, KS · Member since 2016 · 719 posts · 313 votes1y
Quote from @Theresa Harris:
Honestly with current interest rates and housing prices, I'd put it in a high yield savings account.
Pay off consumer debt first then invest in a H-Y, CD
- 1yTheresa HarrisPro MemberMember since 2019 · 15k+ posts · 11k+ votes
Quote from @Billy Smith:
Quote from @Theresa Harris:
Honestly with current interest rates and housing prices, I'd put it in a high yield savings account.
Pay off consumer debt first then invest in a H-Y, CD
True, but for me other than mortgages, I have no consumer debt.
- 1yRonald RohdePro MemberAttorney · Dallas, TX · Member since 2016 · 5k+ posts · 2k+ votes
Quote from @Theresa Harris:
Honestly with current interest rates and housing prices, I'd put it in a high yield savings account.
4.2% isn't doing it for me.
- 1yTheresa HarrisPro MemberMember since 2019 · 15k+ posts · 11k+ votes
Quote from @Ronald Rohde:
Quote from @Theresa Harris:
Honestly with current interest rates and housing prices, I'd put it in a high yield savings account.
4.2% isn't doing it for me.
And that's fine. Everyone is different as is every market. I've been getting more than that, but I'm not in the US.
- 1yRemington LymanBusiness MemberReal Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
Quote from @Austin Fowler:
Very interested in hearing people's investment strategies in real estate. What do you do? What are you passionate about? What kind of returns do you target when investing? How hands-on are you? How scalable is your investment approach? If you won or inherited or otherwise suddenly had $1M in cash, how would you use it to expand your portfolio? Or accelerate your wealth creation?
I like buying properties and having my tenants pay off the debt with their rent. I am passionate about making money. I do not do a good job calculating returns; I just try to buy good deals. I am pretty hands on. It is pretty scalable. I would put it in a money market account and buy properties as I come accross them
- Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes1y
Quote from @Remington Lyman:
Quote from @Austin Fowler:
Very interested in hearing people's investment strategies in real estate. What do you do? What are you passionate about? What kind of returns do you target when investing? How hands-on are you? How scalable is your investment approach? If you won or inherited or otherwise suddenly had $1M in cash, how would you use it to expand your portfolio? Or accelerate your wealth creation?
I like buying properties and having my tenants pay off the debt with their rent. I am passionate about making money. I do not do a good job calculating returns; I just try to buy good deals. I am pretty hands on. It is pretty scalable. I would put it in a money market account and buy properties as I come accross them
What is your definition of cash flow? Rent - management - vacancy - maintenance - taxes - insurance - mortgate? Can you give an example of something available today that would cash flow? Without cashflow, how would you scale?
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes1y
Quote from @Austin Fowler:
Quote from @Remington Lyman:
Quote from @Austin Fowler:
Very interested in hearing people's investment strategies in real estate. What do you do? What are you passionate about? What kind of returns do you target when investing? How hands-on are you? How scalable is your investment approach? If you won or inherited or otherwise suddenly had $1M in cash, how would you use it to expand your portfolio? Or accelerate your wealth creation?
I like buying properties and having my tenants pay off the debt with their rent. I am passionate about making money. I do not do a good job calculating returns; I just try to buy good deals. I am pretty hands on. It is pretty scalable. I would put it in a money market account and buy properties as I come accross them
What is your definition of cash flow? Rent - management - vacancy - maintenance - taxes - insurance - mortgate? Can you give an example of something available today that would cash flow? Without cashflow, how would you scale?
Your asking the wrong question Austin. You should be asking at what annual rate is the scalability.
One can scale buying and doing standard rentals. But scaling will be measured in years and decades. The rate of capitol return is simply not something that lends to any significant self-scaling metric. Period, full-stop. Those who say there C/D can scale so fast blah blah blah, there full of sh#t, or too new or clueless.
The only "hack" is some form of hacking, as in house hacking, something of that nature and in that the scalability is created by the buy and build, not the operation itself. Because these strategies literally create equity. Equity that speeds up capitol recapture, so one has the capitol to scale.
Scaling requires capitol. When talking real estate, it means sizable capitol. There is no passive or passive-like monetization of real estate that generates the kind of capitol required for any note worthy pace of acquisition.
Cash-flow is generally measured in hundreds. Acquisition costs are generally measured in tens of thousands. The former does not lend to any rapid scaling of the later.
- Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes1yI don't buy one copy of an asset if I couldn't in principal buy 100 copies of that same asset. If I buy property that doesn't cash flow, having many such properties would lead to a massive cash flow drain.
Quote from @James Hamling:
Quote from @Austin Fowler:
Quote from @Remington Lyman:
Quote from @Austin Fowler:
Very interested in hearing people's investment strategies in real estate. What do you do? What are you passionate about? What kind of returns do you target when investing? How hands-on are you? How scalable is your investment approach? If you won or inherited or otherwise suddenly had $1M in cash, how would you use it to expand your portfolio? Or accelerate your wealth creation?
I like buying properties and having my tenants pay off the debt with their rent. I am passionate about making money. I do not do a good job calculating returns; I just try to buy good deals. I am pretty hands on. It is pretty scalable. I would put it in a money market account and buy properties as I come accross them
What is your definition of cash flow? Rent - management - vacancy - maintenance - taxes - insurance - mortgate? Can you give an example of something available today that would cash flow? Without cashflow, how would you scale?
Your asking the wrong question Austin. You should be asking at what annual rate is the scalability.
One can scale buying and doing standard rentals. But scaling will be measured in years and decades. The rate of capitol return is simply not something that lends to any significant self-scaling metric. Period, full-stop. Those who say there C/D can scale so fast blah blah blah, there full of sh#t, or too new or clueless.
The only "hack" is some form of hacking, as in house hacking, something of that nature and in that the scalability is created by the buy and build, not the operation itself. Because these strategies literally create equity. Equity that speeds up capitol recapture, so one has the capitol to scale.
Scaling requires capitol. When talking real estate, it means sizable capitol. There is no passive or passive-like monetization of real estate that generates the kind of capitol required for any note worthy pace of acquisition.
Cash-flow is generally measured in hundreds. Acquisition costs are generally measured in tens of thousands. The former does not lend to any rapid scaling of the later.
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes1y
Quote from @Austin Fowler:
I don't buy one copy of an asset if I couldn't in principal buy 100 copies of that same asset. If I buy property that doesn't cash flow, having many such properties would lead to a massive cash flow drain.Quote from @James Hamling:
Quote from @Austin Fowler:
Quote from @Remington Lyman:
Quote from @Austin Fowler:
Very interested in hearing people's investment strategies in real estate. What do you do? What are you passionate about? What kind of returns do you target when investing? How hands-on are you? How scalable is your investment approach? If you won or inherited or otherwise suddenly had $1M in cash, how would you use it to expand your portfolio? Or accelerate your wealth creation?
I like buying properties and having my tenants pay off the debt with their rent. I am passionate about making money. I do not do a good job calculating returns; I just try to buy good deals. I am pretty hands on. It is pretty scalable. I would put it in a money market account and buy properties as I come accross them
What is your definition of cash flow? Rent - management - vacancy - maintenance - taxes - insurance - mortgate? Can you give an example of something available today that would cash flow? Without cashflow, how would you scale?
Your asking the wrong question Austin. You should be asking at what annual rate is the scalability.
One can scale buying and doing standard rentals. But scaling will be measured in years and decades. The rate of capitol return is simply not something that lends to any significant self-scaling metric. Period, full-stop. Those who say there C/D can scale so fast blah blah blah, there full of sh#t, or too new or clueless.
The only "hack" is some form of hacking, as in house hacking, something of that nature and in that the scalability is created by the buy and build, not the operation itself. Because these strategies literally create equity. Equity that speeds up capitol recapture, so one has the capitol to scale.
Scaling requires capitol. When talking real estate, it means sizable capitol. There is no passive or passive-like monetization of real estate that generates the kind of capitol required for any note worthy pace of acquisition.
Cash-flow is generally measured in hundreds. Acquisition costs are generally measured in tens of thousands. The former does not lend to any rapid scaling of the later.
100%.
But therein lies the crux of it all.
The novices are lulled by promises of cash-flow, to then be crushed on the capex rocks, because they chased a false promise.
They used a feeling of scale, vs an accuracy of complete numbers and reality. Because the desire to get-in, scarcity of viable opportunities, FOMO, leads them into capitol drains vs capitol contributors.
In my experience most thought/felt what they were doing would make $, and scale, only to experience a very different reality. Very few intentionally, knowingly and willingly enter as an equity investment. I have many of the later as clients, I have helped many of the former. The later are a much more rare breed.
- Rental Property Investor · Emmaus, PA · Member since 2021 · 153 posts · 85 votes1y
If I came into $1M, I believe I would continue with the same strategy I am currently using but at a larger scale.
Right now, I focus on value-add and distressed multi-family apartment buildings (15+ units) and I aim for a stabilized COCR in the high-teens. If I were to come into $1,000,000 I would look for a property that is 45+ units in size with a "B" upside potential after moderate improvements (new appliances, new hardware, lighting upgrades, new flooring, bathroom updates, etc.).
However, if I could not find a suitable project that size, then I would look for 2-3 properties that are the current size I am used to working with. I wouldn't simply buy a large property that doesn't have a return just because I have money to burn.
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes1y
Ok @Austin Fowler you really want to know what I'd do if dropped $1m liquid in my hands and I gotta utilize it in Real Estate, even though all of 7 people on BP will comprehend it......
About $5k into website, 2 VA's and system.
From there 1 VA calls on active buyers agents in designated markets presenting pitch to fill my calendly.
From there I pitch my C4D program for "nearly financed" buyers. When the buyers agent get's leads, works em, and finds there buyers are oh-so-close to approval but not there, they can still earn that commission via my C4D program.
Everything would revolve around "median" world of things.
Required minimum down payment is 20%. No exceptions. Everything else, there would be guidelines but just that, guidelines and negotiable whereas down has 0-flex.
All app's via website. Va#2 process's per training.
Buyers get a pre-qual budget. Buyers agent then helps them shop for such. When they find the right one, buyers enter agreement and post held escrowed down with me. Buyers agent submits PA, myself as buyer.
At end of day, it's infinite investing, because when closing is done and all $ has cleared I am personally $0 into any property, that $1m was simply used to launch the biz and then to leverage to landing the PA's.
The tenant-buyers financed the purchase via there down, which I utilize to unlock financing on the purchase. I would be using portfolio lending on DSCR underwriting, cross securitized by, you got it, the giant pile of cash sitting in an account spinning round n round.
Now being C4D buyers there is 2 spreads. First is on purchase price, second is interest rate.
I only have to capitalize risk exposure, overhead and profits because I have $0 invested capitol. Thus a small spread can equal sizable returns.
Now if you understand the math here, buyers doing 20% down on a buy price that has a profitable margin built in, then you understand how it would be more then 20% on my actual purchase. Probably more-so 30%.
In summary, I wouldn't deploy 90% of the $1m, I would leverage the lions share of the $1m to unlock infinite returns via OPM.
And I am now well liquid to cover any potential default issues if such were to occur. But being "median" focused and with C4D buyers who put 20%+ down aka significant skin into it, well one would have to chop off there own preverbal legs to give me a bloody nose. And I'd be well liquid to more then amply take care of any bloody-nose.
My risk exposure would be less then that of standard landlording, as the tenants would have far more securitization. So risk wise, it's a low-risk strategy in real estate.
And end of day, everybody is winning, the agents win, the end buyers win, and I win.
The trick to it all is setting and keeping good fences.
100% of C4D's I have seen blow-up have all had the common component of neglect on behalf of the investor. Selling to persons they shouldn't have, under securitizing, not keeping strong fences.
There ya-go Austin, that's what I'd do. And I'd dedicate as-much-as 20hrs a week to it. I'd fund my va's for 90 days and from there forward I'd require the venture to self-fund all operations from revenues. And that would be my "stop-loss". The moment it stops self-operating, I'd end it, regardless of a causation.
Thus preserving my capitol.
- Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes1yCan you give an example of the numbers as seen by the proposed business? Say for a $500k purchase the buyer can't quite qualify for a loan for? Where are you taking your cut? Clearly such a buyer could in principle go straight to the seller and ask for seller financing, particularly with a 20% down payment in hand.
Quote from @James Hamling:
Ok @Austin Fowler you really want to know what I'd do if dropped $1m liquid in my hands and I gotta utilize it in Real Estate, even though all of 7 people on BP will comprehend it......
About $5k into website, 2 VA's and system.
From there 1 VA calls on active buyers agents in designated markets presenting pitch to fill my calendly.
From there I pitch my C4D program for "nearly financed" buyers. When the buyers agent get's leads, works em, and finds there buyers are oh-so-close to approval but not there, they can still earn that commission via my C4D program.
Everything would revolve around "median" world of things.
Required minimum down payment is 20%. No exceptions. Everything else, there would be guidelines but just that, guidelines and negotiable whereas down has 0-flex.
All app's via website. Va#2 process's per training.
Buyers get a pre-qual budget. Buyers agent then helps them shop for such. When they find the right one, buyers enter agreement and post held escrowed down with me. Buyers agent submits PA, myself as buyer.
At end of day, it's infinite investing, because when closing is done and all $ has cleared I am personally $0 into any property, that $1m was simply used to launch the biz and then to leverage to landing the PA's.
The tenant-buyers financed the purchase via there down, which I utilize to unlock financing on the purchase. I would be using portfolio lending on DSCR underwriting, cross securitized by, you got it, the giant pile of cash sitting in an account spinning round n round.
Now being C4D buyers there is 2 spreads. First is on purchase price, second is interest rate.
I only have to capitalize risk exposure, overhead and profits because I have $0 invested capitol. Thus a small spread can equal sizable returns.
Now if you understand the math here, buyers doing 20% down on a buy price that has a profitable margin built in, then you understand how it would be more then 20% on my actual purchase. Probably more-so 30%.
In summary, I wouldn't deploy 90% of the $1m, I would leverage the lions share of the $1m to unlock infinite returns via OPM.
And I am now well liquid to cover any potential default issues if such were to occur. But being "median" focused and with C4D buyers who put 20%+ down aka significant skin into it, well one would have to chop off there own preverbal legs to give me a bloody nose. And I'd be well liquid to more then amply take care of any bloody-nose.
My risk exposure would be less then that of standard landlording, as the tenants would have far more securitization. So risk wise, it's a low-risk strategy in real estate.
And end of day, everybody is winning, the agents win, the end buyers win, and I win.
The trick to it all is setting and keeping good fences.
100% of C4D's I have seen blow-up have all had the common component of neglect on behalf of the investor. Selling to persons they shouldn't have, under securitizing, not keeping strong fences.
There ya-go Austin, that's what I'd do. And I'd dedicate as-much-as 20hrs a week to it. I'd fund my va's for 90 days and from there forward I'd require the venture to self-fund all operations from revenues. And that would be my "stop-loss". The moment it stops self-operating, I'd end it, regardless of a causation.
Thus preserving my capitol.
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes1y
Quote from @Austin Fowler:
Can you give an example of the numbers as seen by the proposed business? Say for a $500k purchase the buyer can't quite qualify for a loan for? Where are you taking your cut? Clearly such a buyer could in principle go straight to the seller and ask for seller financing, particularly with a 20% down payment in hand.Quote from @James Hamling:
Ok @Austin Fowler you really want to know what I'd do if dropped $1m liquid in my hands and I gotta utilize it in Real Estate, even though all of 7 people on BP will comprehend it......
About $5k into website, 2 VA's and system.
From there 1 VA calls on active buyers agents in designated markets presenting pitch to fill my calendly.
From there I pitch my C4D program for "nearly financed" buyers. When the buyers agent get's leads, works em, and finds there buyers are oh-so-close to approval but not there, they can still earn that commission via my C4D program.
Everything would revolve around "median" world of things.
Required minimum down payment is 20%. No exceptions. Everything else, there would be guidelines but just that, guidelines and negotiable whereas down has 0-flex.
All app's via website. Va#2 process's per training.
Buyers get a pre-qual budget. Buyers agent then helps them shop for such. When they find the right one, buyers enter agreement and post held escrowed down with me. Buyers agent submits PA, myself as buyer.
At end of day, it's infinite investing, because when closing is done and all $ has cleared I am personally $0 into any property, that $1m was simply used to launch the biz and then to leverage to landing the PA's.
The tenant-buyers financed the purchase via there down, which I utilize to unlock financing on the purchase. I would be using portfolio lending on DSCR underwriting, cross securitized by, you got it, the giant pile of cash sitting in an account spinning round n round.
Now being C4D buyers there is 2 spreads. First is on purchase price, second is interest rate.
I only have to capitalize risk exposure, overhead and profits because I have $0 invested capitol. Thus a small spread can equal sizable returns.
Now if you understand the math here, buyers doing 20% down on a buy price that has a profitable margin built in, then you understand how it would be more then 20% on my actual purchase. Probably more-so 30%.
In summary, I wouldn't deploy 90% of the $1m, I would leverage the lions share of the $1m to unlock infinite returns via OPM.
And I am now well liquid to cover any potential default issues if such were to occur. But being "median" focused and with C4D buyers who put 20%+ down aka significant skin into it, well one would have to chop off there own preverbal legs to give me a bloody nose. And I'd be well liquid to more then amply take care of any bloody-nose.
My risk exposure would be less then that of standard landlording, as the tenants would have far more securitization. So risk wise, it's a low-risk strategy in real estate.
And end of day, everybody is winning, the agents win, the end buyers win, and I win.
The trick to it all is setting and keeping good fences.
100% of C4D's I have seen blow-up have all had the common component of neglect on behalf of the investor. Selling to persons they shouldn't have, under securitizing, not keeping strong fences.
There ya-go Austin, that's what I'd do. And I'd dedicate as-much-as 20hrs a week to it. I'd fund my va's for 90 days and from there forward I'd require the venture to self-fund all operations from revenues. And that would be my "stop-loss". The moment it stops self-operating, I'd end it, regardless of a causation.
Thus preserving my capitol.
In theory, yes, a buyer could just go to a seller and present a seller financed purchase offer. And in theory all buyers agents, being licensed "professionals" would know of this options, and how to do it.
In practice, 97% of agents have absolutely 0-clue how to write, present or negotiate a C4D purchase. Not opinion, experience.
And since the knowledge and education is so lacking by agents, it's equally lacking by sellers, and sellers agents, thus putting off most sellers and seller agents, because it's foreign to them, and assumed as bad, hokum, or something scammy.
As I said before, with C4D there is 2 spreads, price and terms. At least how I do them.
A premium is fairly owed for obtaining a C4D vs a lease on a property. Think, when do a lease with option, there is a price to be paid for that purchase option, right? Well, with C4D you have use of property and own purchase rights just the same don't you? But have even more expanded rights with the property. There is a value for that.
So let's say it's a 3yr term. And you said $500k. Now if look at things and see market's averaging say 4% appreciation per year, that get's us to $562,432.00.
Now before anyone balks at a purchase price on future value, stop and think it through. What would it be if they rented it for 3 years, THEN purchased it? They would be paying that purchase price PLUS 3 years of rents, right?
Now a math I use is 17%. That would be $585k.
So I'd look at this and say yup, $585k is fair as it's a fair profit-premium for the venture and that would be there purchase price on C4D, $585k. Which is only $23k'ish, or a bit under 5%.
Again, ask yourself what would 3yrs of rent on a $500k home be? I bet a heck of a lot more then $23k.
So now they put down, at minimum, $117k/ 20%, making my purchase $ to cover $383,000 or 76.6%.
Now say my interest rate I get is 6.85%. Given buyer placed minimum down, I am going to require 8.85%
Now I am paying 6.85% on a $383k mortgage.
Buyers are paying me 8.85% on a $468k mortgage.
Not to mention the payments are all calculated via a standard amortized 30yr schedule, so given the difference in the basis they are calculated form, that is an operational spread right there.
I have profits via the interest spread as things go along, and when finance out at end I reap the equitable profits.
And in this example, yes, I had to bring 1.6% of purchase price to closing, maybe. That $8k would be amply be recouped in 1st yr as the spread on payments is about $1k per month.
Capex, maintenance, insurance, no no no monfrare, they are buyers not tenants, all that is pass through onto buyers or theres alone.
I write these where seller pays property tax's and operates insurance, and submits the amount owed by buyers each year as monthly allocation in addition to there normal set payments. This is for safety sake to assure there is proper insurance, tax's are paid, etc etc.. Kind of like how FHA does it.
And that's the think, how much does PMI cost a buyer if they were to go that road? That isn't cheap either, once add up the aggregate total.
$500k seems a bit high to me as I pointed out, it's about the median market, median buyer, median. But hey, I've seen it in near million dollar range.
Now if your going to argue "but a person could just....." look, no argument from me, yes, in theory there is a lot of things people COULD do, for example when "saving" to buy a future home they "could" stop renting places from me for $2,500 - $4,500 mnth pretending there "saving" anything, and just rent what meet's there needs, like a $1,700mnth really nice apartment. But as of yet, I have no shortage of tenants.
People want convenience. And they want instant gratification. They don't want to wait, they want it NOW. And really, it's there $ and there prerogative, who am I to judge, there life not mine.
And it's not necessarily dumb either. Think, what if a person locked in one of these in 2018, 2019, even 2020...... Yup, they won the appreciation lotto didn't they.
And any way you slice it, when renting a person get's 0% of there monthly payments in equity. Even an "expensive" C4D = equity accrual, it means they are finally getting somewhere with there housing payments other than just 30 more days of a roof over their head.
- 1yJoe S.Pro MemberInvestor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
Quote from @James Hamling:
Ok @Austin Fowler you really want to know what I'd do if dropped $1m liquid in my hands and I gotta utilize it in Real Estate, even though all of 7 people on BP will comprehend it......
About $5k into website, 2 VA's and system.
From there 1 VA calls on active buyers agents in designated markets presenting pitch to fill my calendly.
From there I pitch my C4D program for "nearly financed" buyers. When the buyers agent get's leads, works em, and finds there buyers are oh-so-close to approval but not there, they can still earn that commission via my C4D program.
Everything would revolve around "median" world of things.
Required minimum down payment is 20%. No exceptions. Everything else, there would be guidelines but just that, guidelines and negotiable whereas down has 0-flex.
All app's via website. Va#2 process's per training.
Buyers get a pre-qual budget. Buyers agent then helps them shop for such. When they find the right one, buyers enter agreement and post held escrowed down with me. Buyers agent submits PA, myself as buyer.
At end of day, it's infinite investing, because when closing is done and all $ has cleared I am personally $0 into any property, that $1m was simply used to launch the biz and then to leverage to landing the PA's.
The tenant-buyers financed the purchase via there down, which I utilize to unlock financing on the purchase. I would be using portfolio lending on DSCR underwriting, cross securitized by, you got it, the giant pile of cash sitting in an account spinning round n round.
Now being C4D buyers there is 2 spreads. First is on purchase price, second is interest rate.
I only have to capitalize risk exposure, overhead and profits because I have $0 invested capitol. Thus a small spread can equal sizable returns.
Now if you understand the math here, buyers doing 20% down on a buy price that has a profitable margin built in, then you understand how it would be more then 20% on my actual purchase. Probably more-so 30%.
In summary, I wouldn't deploy 90% of the $1m, I would leverage the lions share of the $1m to unlock infinite returns via OPM.
And I am now well liquid to cover any potential default issues if such were to occur. But being "median" focused and with C4D buyers who put 20%+ down aka significant skin into it, well one would have to chop off there own preverbal legs to give me a bloody nose. And I'd be well liquid to more then amply take care of any bloody-nose.
My risk exposure would be less then that of standard landlording, as the tenants would have far more securitization. So risk wise, it's a low-risk strategy in real estate.
And end of day, everybody is winning, the agents win, the end buyers win, and I win.
The trick to it all is setting and keeping good fences.
100% of C4D's I have seen blow-up have all had the common component of neglect on behalf of the investor. Selling to persons they shouldn't have, under securitizing, not keeping strong fences.
There ya-go Austin, that's what I'd do. And I'd dedicate as-much-as 20hrs a week to it. I'd fund my va's for 90 days and from there forward I'd require the venture to self-fund all operations from revenues. And that would be my "stop-loss". The moment it stops self-operating, I'd end it, regardless of a causation.
Thus preserving my capitol.
Hey James, you do not have to wait to get $1 million to do one or two of deals as a test run…IMO
I think that is a very thought out plan. A couple of thoughts though. From my observation, it is harder to get a substantial down payment and a higher than market interest rate at the same time. (Maybe your market is different.)
In Texas contract for deeds are not smiled upon at least that's the word on the street. I have a number of DSCR Loans that I am nervous to wrap if I could do the C4D like you're speaking over here I would definitely consider doing it.✅I have a friend of sorts that has wrapped some DSCR loans with no problems. I'm just a bit nervous to do so…
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes1y
Quote from @Joe S.:
Quote from @James Hamling:
Ok @Austin Fowler you really want to know what I'd do if dropped $1m liquid in my hands and I gotta utilize it in Real Estate, even though all of 7 people on BP will comprehend it......
About $5k into website, 2 VA's and system.
From there 1 VA calls on active buyers agents in designated markets presenting pitch to fill my calendly.
From there I pitch my C4D program for "nearly financed" buyers. When the buyers agent get's leads, works em, and finds there buyers are oh-so-close to approval but not there, they can still earn that commission via my C4D program.
Everything would revolve around "median" world of things.
Required minimum down payment is 20%. No exceptions. Everything else, there would be guidelines but just that, guidelines and negotiable whereas down has 0-flex.
All app's via website. Va#2 process's per training.
Buyers get a pre-qual budget. Buyers agent then helps them shop for such. When they find the right one, buyers enter agreement and post held escrowed down with me. Buyers agent submits PA, myself as buyer.
At end of day, it's infinite investing, because when closing is done and all $ has cleared I am personally $0 into any property, that $1m was simply used to launch the biz and then to leverage to landing the PA's.
The tenant-buyers financed the purchase via there down, which I utilize to unlock financing on the purchase. I would be using portfolio lending on DSCR underwriting, cross securitized by, you got it, the giant pile of cash sitting in an account spinning round n round.
Now being C4D buyers there is 2 spreads. First is on purchase price, second is interest rate.
I only have to capitalize risk exposure, overhead and profits because I have $0 invested capitol. Thus a small spread can equal sizable returns.
Now if you understand the math here, buyers doing 20% down on a buy price that has a profitable margin built in, then you understand how it would be more then 20% on my actual purchase. Probably more-so 30%.
In summary, I wouldn't deploy 90% of the $1m, I would leverage the lions share of the $1m to unlock infinite returns via OPM.
And I am now well liquid to cover any potential default issues if such were to occur. But being "median" focused and with C4D buyers who put 20%+ down aka significant skin into it, well one would have to chop off there own preverbal legs to give me a bloody nose. And I'd be well liquid to more then amply take care of any bloody-nose.
My risk exposure would be less then that of standard landlording, as the tenants would have far more securitization. So risk wise, it's a low-risk strategy in real estate.
And end of day, everybody is winning, the agents win, the end buyers win, and I win.
The trick to it all is setting and keeping good fences.
100% of C4D's I have seen blow-up have all had the common component of neglect on behalf of the investor. Selling to persons they shouldn't have, under securitizing, not keeping strong fences.
There ya-go Austin, that's what I'd do. And I'd dedicate as-much-as 20hrs a week to it. I'd fund my va's for 90 days and from there forward I'd require the venture to self-fund all operations from revenues. And that would be my "stop-loss". The moment it stops self-operating, I'd end it, regardless of a causation.
Thus preserving my capitol.
Hey James, you do not have to wait to get $1 million to do one or two of deals as a test run…IMO
I think that is a very thought out plan. A couple of thoughts though. From my observation, it is harder to get a substantial down payment and a higher than market interest rate at the same time. (Maybe your market is different.)
In Texas contract for deeds are not smiled upon at least that's the word on the street. I have a number of DSCR Loans that I am nervous to wrap if I could do the C4D like you're speaking over here I would definitely consider doing it.✅I have a friend of sorts that has wrapped some DSCR loans with no problems. I'm just a bit nervous to do so…
All very valid points Joe.
In my experience there is no shortage of person who want to buy on C4D, but those correctly capitalized, yes they are the diamonds in the rough.
And that is the entire point of C4D, in my eyes at least, it's not for everyone. C4D is "a" tool in the tool-box. It has a specific purpose, and best use. When used wrong, like a pipe wrench to pound a nail, well let's just say "results may vary" is an understatement.
My most ideal C4D buyers are self-employed, often in first years, especially when in a service industry. Think Electricians, Plumbers etc.. Where they have great enduring incomes, and immense write-off potentials. They commonly run into the problem of being told they need to take 2 years of hit's on the paperwork, use less write-off's, to more accurately show income to achieve the financing approval looking for.
I don't use C4D for buyers seeking to gain what they can't actually afford, on faith and hope that someday in the future they will.
In my experience about 95% of people first are not so welcoming or interested in C4D, and for good reason, it's lessor known and has been used and abused by nefarious persons way too often. If I get 10 minutes to discuss it, 95% become accepting. It's about doing it legally and thoroughly. I always have full closings and R.E. Attorney on every one. I encourage inspections and appraisals. Sunlight is the best disinfectant, right.
I say DSCR just for simplicity of the paperwork. Key is more on using portfolio lending. When have such a relationship with a bank, and repetition, it breeds comprehension and security. To be more exact I'd, at whatever point, utelize a commercial financing "product", but as said portfolio, with a LOC. We would close via the LOC, then they complete paperwork to then roll that next purchase into the entire whole of the financing, and replenish that LOC. The actual account with the capitol would just sit in it's account, used just as eye-candy for the PA's, and warm-fuzzy feeling for the bank I'm working with.
One may wonder "but what about when you get ____ properties in there?". Keep scale in mind, there C4D's, they ideally finance out in 3-5yrs, so there is a natural churn to it all. And a person is going to do what, as-many-as 10 a year, maybe. 50 SFH's worth isn't really all that much $ in commercial finance terms.
If your concern on wrapping DSCR is on a what-if revenues get interrupted, I'd remind that by wrapping in a grouping you lower your risk exposure. 10 SFR's on a mortgage is much safer than 1, because loss of any 1's revenue is only a loss of 10% revenues, not 100%. Same way insurance works on risk exposure.
As for not needing the $1m, I know, I do these now, and have for years, hence why I can rattle on about them, because I actually do them and am speaking from experience not theory.
Well..... except for scaling, that is theory, I am not at-scale on it, not at all, haven't tried to scale but have thought on it a few times. I don't market it at all, 100% word of mouth....
- Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes1y
Quote from @James Hamling:
Quote from @Joe S.:
Quote from @James Hamling:
Ok @Austin Fowler you really want to know what I'd do if dropped $1m liquid in my hands and I gotta utilize it in Real Estate, even though all of 7 people on BP will comprehend it......
About $5k into website, 2 VA's and system.
From there 1 VA calls on active buyers agents in designated markets presenting pitch to fill my calendly.
From there I pitch my C4D program for "nearly financed" buyers. When the buyers agent get's leads, works em, and finds there buyers are oh-so-close to approval but not there, they can still earn that commission via my C4D program.
Everything would revolve around "median" world of things.
Required minimum down payment is 20%. No exceptions. Everything else, there would be guidelines but just that, guidelines and negotiable whereas down has 0-flex.
All app's via website. Va#2 process's per training.
Buyers get a pre-qual budget. Buyers agent then helps them shop for such. When they find the right one, buyers enter agreement and post held escrowed down with me. Buyers agent submits PA, myself as buyer.
At end of day, it's infinite investing, because when closing is done and all $ has cleared I am personally $0 into any property, that $1m was simply used to launch the biz and then to leverage to landing the PA's.
The tenant-buyers financed the purchase via there down, which I utilize to unlock financing on the purchase. I would be using portfolio lending on DSCR underwriting, cross securitized by, you got it, the giant pile of cash sitting in an account spinning round n round.
Now being C4D buyers there is 2 spreads. First is on purchase price, second is interest rate.
I only have to capitalize risk exposure, overhead and profits because I have $0 invested capitol. Thus a small spread can equal sizable returns.
Now if you understand the math here, buyers doing 20% down on a buy price that has a profitable margin built in, then you understand how it would be more then 20% on my actual purchase. Probably more-so 30%.
In summary, I wouldn't deploy 90% of the $1m, I would leverage the lions share of the $1m to unlock infinite returns via OPM.
And I am now well liquid to cover any potential default issues if such were to occur. But being "median" focused and with C4D buyers who put 20%+ down aka significant skin into it, well one would have to chop off there own preverbal legs to give me a bloody nose. And I'd be well liquid to more then amply take care of any bloody-nose.
My risk exposure would be less then that of standard landlording, as the tenants would have far more securitization. So risk wise, it's a low-risk strategy in real estate.
And end of day, everybody is winning, the agents win, the end buyers win, and I win.
The trick to it all is setting and keeping good fences.
100% of C4D's I have seen blow-up have all had the common component of neglect on behalf of the investor. Selling to persons they shouldn't have, under securitizing, not keeping strong fences.
There ya-go Austin, that's what I'd do. And I'd dedicate as-much-as 20hrs a week to it. I'd fund my va's for 90 days and from there forward I'd require the venture to self-fund all operations from revenues. And that would be my "stop-loss". The moment it stops self-operating, I'd end it, regardless of a causation.
Thus preserving my capitol.
Hey James, you do not have to wait to get $1 million to do one or two of deals as a test run…IMO
I think that is a very thought out plan. A couple of thoughts though. From my observation, it is harder to get a substantial down payment and a higher than market interest rate at the same time. (Maybe your market is different.)
In Texas contract for deeds are not smiled upon at least that's the word on the street. I have a number of DSCR Loans that I am nervous to wrap if I could do the C4D like you're speaking over here I would definitely consider doing it.✅I have a friend of sorts that has wrapped some DSCR loans with no problems. I'm just a bit nervous to do so…
All very valid points Joe.
In my experience there is no shortage of person who want to buy on C4D, but those correctly capitalized, yes they are the diamonds in the rough.
And that is the entire point of C4D, in my eyes at least, it's not for everyone. C4D is "a" tool in the tool-box. It has a specific purpose, and best use. When used wrong, like a pipe wrench to pound a nail, well let's just say "results may vary" is an understatement.
My most ideal C4D buyers are self-employed, often in first years, especially when in a service industry. Think Electricians, Plumbers etc.. Where they have great enduring incomes, and immense write-off potentials. They commonly run into the problem of being told they need to take 2 years of hit's on the paperwork, use less write-off's, to more accurately show income to achieve the financing approval looking for.
I don't use C4D for buyers seeking to gain what they can't actually afford, on faith and hope that someday in the future they will.
In my experience about 95% of people first are not so welcoming or interested in C4D, and for good reason, it's lessor known and has been used and abused by nefarious persons way too often. If I get 10 minutes to discuss it, 95% become accepting. It's about doing it legally and thoroughly. I always have full closings and R.E. Attorney on every one. I encourage inspections and appraisals. Sunlight is the best disinfectant, right.
I say DSCR just for simplicity of the paperwork. Key is more on using portfolio lending. When have such a relationship with a bank, and repetition, it breeds comprehension and security. To be more exact I'd, at whatever point, utelize a commercial financing "product", but as said portfolio, with a LOC. We would close via the LOC, then they complete paperwork to then roll that next purchase into the entire whole of the financing, and replenish that LOC. The actual account with the capitol would just sit in it's account, used just as eye-candy for the PA's, and warm-fuzzy feeling for the bank I'm working with.
One may wonder "but what about when you get ____ properties in there?". Keep scale in mind, there C4D's, they ideally finance out in 3-5yrs, so there is a natural churn to it all. And a person is going to do what, as-many-as 10 a year, maybe. 50 SFH's worth isn't really all that much $ in commercial finance terms.
If your concern on wrapping DSCR is on a what-if revenues get interrupted, I'd remind that by wrapping in a grouping you lower your risk exposure. 10 SFR's on a mortgage is much safer than 1, because loss of any 1's revenue is only a loss of 10% revenues, not 100%. Same way insurance works on risk exposure.
As for not needing the $1m, I know, I do these now, and have for years, hence why I can rattle on about them, because I actually do them and am speaking from experience not theory.
Well..... except for scaling, that is theory, I am not at-scale on it, not at all, haven't tried to scale but have thought on it a few times. I don't market it at all, 100% word of mouth....
What scale has your current word of mouth approach got you to?
- 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @James Hamling:
Quote from @Joe S.:
Quote from @James Hamling:
Ok @Austin Fowler you really want to know what I'd do if dropped $1m liquid in my hands and I gotta utilize it in Real Estate, even though all of 7 people on BP will comprehend it......
About $5k into website, 2 VA's and system.
From there 1 VA calls on active buyers agents in designated markets presenting pitch to fill my calendly.
From there I pitch my C4D program for "nearly financed" buyers. When the buyers agent get's leads, works em, and finds there buyers are oh-so-close to approval but not there, they can still earn that commission via my C4D program.
Everything would revolve around "median" world of things.
Required minimum down payment is 20%. No exceptions. Everything else, there would be guidelines but just that, guidelines and negotiable whereas down has 0-flex.
All app's via website. Va#2 process's per training.
Buyers get a pre-qual budget. Buyers agent then helps them shop for such. When they find the right one, buyers enter agreement and post held escrowed down with me. Buyers agent submits PA, myself as buyer.
At end of day, it's infinite investing, because when closing is done and all $ has cleared I am personally $0 into any property, that $1m was simply used to launch the biz and then to leverage to landing the PA's.
The tenant-buyers financed the purchase via there down, which I utilize to unlock financing on the purchase. I would be using portfolio lending on DSCR underwriting, cross securitized by, you got it, the giant pile of cash sitting in an account spinning round n round.
Now being C4D buyers there is 2 spreads. First is on purchase price, second is interest rate.
I only have to capitalize risk exposure, overhead and profits because I have $0 invested capitol. Thus a small spread can equal sizable returns.
Now if you understand the math here, buyers doing 20% down on a buy price that has a profitable margin built in, then you understand how it would be more then 20% on my actual purchase. Probably more-so 30%.
In summary, I wouldn't deploy 90% of the $1m, I would leverage the lions share of the $1m to unlock infinite returns via OPM.
And I am now well liquid to cover any potential default issues if such were to occur. But being "median" focused and with C4D buyers who put 20%+ down aka significant skin into it, well one would have to chop off there own preverbal legs to give me a bloody nose. And I'd be well liquid to more then amply take care of any bloody-nose.
My risk exposure would be less then that of standard landlording, as the tenants would have far more securitization. So risk wise, it's a low-risk strategy in real estate.
And end of day, everybody is winning, the agents win, the end buyers win, and I win.
The trick to it all is setting and keeping good fences.
100% of C4D's I have seen blow-up have all had the common component of neglect on behalf of the investor. Selling to persons they shouldn't have, under securitizing, not keeping strong fences.
There ya-go Austin, that's what I'd do. And I'd dedicate as-much-as 20hrs a week to it. I'd fund my va's for 90 days and from there forward I'd require the venture to self-fund all operations from revenues. And that would be my "stop-loss". The moment it stops self-operating, I'd end it, regardless of a causation.
Thus preserving my capitol.
Hey James, you do not have to wait to get $1 million to do one or two of deals as a test run…IMO
I think that is a very thought out plan. A couple of thoughts though. From my observation, it is harder to get a substantial down payment and a higher than market interest rate at the same time. (Maybe your market is different.)
In Texas contract for deeds are not smiled upon at least that's the word on the street. I have a number of DSCR Loans that I am nervous to wrap if I could do the C4D like you're speaking over here I would definitely consider doing it.✅I have a friend of sorts that has wrapped some DSCR loans with no problems. I'm just a bit nervous to do so…
All very valid points Joe.
In my experience there is no shortage of person who want to buy on C4D, but those correctly capitalized, yes they are the diamonds in the rough.
And that is the entire point of C4D, in my eyes at least, it's not for everyone. C4D is "a" tool in the tool-box. It has a specific purpose, and best use. When used wrong, like a pipe wrench to pound a nail, well let's just say "results may vary" is an understatement.
My most ideal C4D buyers are self-employed, often in first years, especially when in a service industry. Think Electricians, Plumbers etc.. Where they have great enduring incomes, and immense write-off potentials. They commonly run into the problem of being told they need to take 2 years of hit's on the paperwork, use less write-off's, to more accurately show income to achieve the financing approval looking for.
I don't use C4D for buyers seeking to gain what they can't actually afford, on faith and hope that someday in the future they will.
In my experience about 95% of people first are not so welcoming or interested in C4D, and for good reason, it's lessor known and has been used and abused by nefarious persons way too often. If I get 10 minutes to discuss it, 95% become accepting. It's about doing it legally and thoroughly. I always have full closings and R.E. Attorney on every one. I encourage inspections and appraisals. Sunlight is the best disinfectant, right.
I say DSCR just for simplicity of the paperwork. Key is more on using portfolio lending. When have such a relationship with a bank, and repetition, it breeds comprehension and security. To be more exact I'd, at whatever point, utelize a commercial financing "product", but as said portfolio, with a LOC. We would close via the LOC, then they complete paperwork to then roll that next purchase into the entire whole of the financing, and replenish that LOC. The actual account with the capitol would just sit in it's account, used just as eye-candy for the PA's, and warm-fuzzy feeling for the bank I'm working with.
One may wonder "but what about when you get ____ properties in there?". Keep scale in mind, there C4D's, they ideally finance out in 3-5yrs, so there is a natural churn to it all. And a person is going to do what, as-many-as 10 a year, maybe. 50 SFH's worth isn't really all that much $ in commercial finance terms.
If your concern on wrapping DSCR is on a what-if revenues get interrupted, I'd remind that by wrapping in a grouping you lower your risk exposure. 10 SFR's on a mortgage is much safer than 1, because loss of any 1's revenue is only a loss of 10% revenues, not 100%. Same way insurance works on risk exposure.
As for not needing the $1m, I know, I do these now, and have for years, hence why I can rattle on about them, because I actually do them and am speaking from experience not theory.
Well..... except for scaling, that is theory, I am not at-scale on it, not at all, haven't tried to scale but have thought on it a few times. I don't market it at all, 100% word of mouth....
CFD or land contracts as they are called in some other states I believe had their start in the land flipping bizz when banks simply wont or very rarely will finance anyone for land purchases compared to how widely available bank money is for improved properties. Growing up in the land bizz we never did CFD we just did a Trust deed and note and deeded the property to the folks.. that was CA.. However when I got into land and timber in the PNW ( OR WA ) contract for deed or land contract ( same thing) was the preferred method to secure the seller on private sale.. I did buy a Columbia River Front home in Wa on a contract for deed a few years ago but in the same area I bought little rental house on a trust deed and note from a private seller.. So just depends.. land contract and CFD were used to circumvent foreclosures was one of the main benefits.. I think @Joe S. point about Texas is there must of been a ton of fraud and abuse with CFD and lease options is why Texas takes a hard line against them.
- Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes1y
Quote from @Jay Hinrichs:
Quote from @James Hamling:
Quote from @Joe S.:
Quote from @James Hamling:
Ok @Austin Fowler you really want to know what I'd do if dropped $1m liquid in my hands and I gotta utilize it in Real Estate, even though all of 7 people on BP will comprehend it......
About $5k into website, 2 VA's and system.
From there 1 VA calls on active buyers agents in designated markets presenting pitch to fill my calendly.
From there I pitch my C4D program for "nearly financed" buyers. When the buyers agent get's leads, works em, and finds there buyers are oh-so-close to approval but not there, they can still earn that commission via my C4D program.
Everything would revolve around "median" world of things.
Required minimum down payment is 20%. No exceptions. Everything else, there would be guidelines but just that, guidelines and negotiable whereas down has 0-flex.
All app's via website. Va#2 process's per training.
Buyers get a pre-qual budget. Buyers agent then helps them shop for such. When they find the right one, buyers enter agreement and post held escrowed down with me. Buyers agent submits PA, myself as buyer.
At end of day, it's infinite investing, because when closing is done and all $ has cleared I am personally $0 into any property, that $1m was simply used to launch the biz and then to leverage to landing the PA's.
The tenant-buyers financed the purchase via there down, which I utilize to unlock financing on the purchase. I would be using portfolio lending on DSCR underwriting, cross securitized by, you got it, the giant pile of cash sitting in an account spinning round n round.
Now being C4D buyers there is 2 spreads. First is on purchase price, second is interest rate.
I only have to capitalize risk exposure, overhead and profits because I have $0 invested capitol. Thus a small spread can equal sizable returns.
Now if you understand the math here, buyers doing 20% down on a buy price that has a profitable margin built in, then you understand how it would be more then 20% on my actual purchase. Probably more-so 30%.
In summary, I wouldn't deploy 90% of the $1m, I would leverage the lions share of the $1m to unlock infinite returns via OPM.
And I am now well liquid to cover any potential default issues if such were to occur. But being "median" focused and with C4D buyers who put 20%+ down aka significant skin into it, well one would have to chop off there own preverbal legs to give me a bloody nose. And I'd be well liquid to more then amply take care of any bloody-nose.
My risk exposure would be less then that of standard landlording, as the tenants would have far more securitization. So risk wise, it's a low-risk strategy in real estate.
And end of day, everybody is winning, the agents win, the end buyers win, and I win.
The trick to it all is setting and keeping good fences.
100% of C4D's I have seen blow-up have all had the common component of neglect on behalf of the investor. Selling to persons they shouldn't have, under securitizing, not keeping strong fences.
There ya-go Austin, that's what I'd do. And I'd dedicate as-much-as 20hrs a week to it. I'd fund my va's for 90 days and from there forward I'd require the venture to self-fund all operations from revenues. And that would be my "stop-loss". The moment it stops self-operating, I'd end it, regardless of a causation.
Thus preserving my capitol.
Hey James, you do not have to wait to get $1 million to do one or two of deals as a test run…IMO
I think that is a very thought out plan. A couple of thoughts though. From my observation, it is harder to get a substantial down payment and a higher than market interest rate at the same time. (Maybe your market is different.)
In Texas contract for deeds are not smiled upon at least that's the word on the street. I have a number of DSCR Loans that I am nervous to wrap if I could do the C4D like you're speaking over here I would definitely consider doing it.✅I have a friend of sorts that has wrapped some DSCR loans with no problems. I'm just a bit nervous to do so…
All very valid points Joe.
In my experience there is no shortage of person who want to buy on C4D, but those correctly capitalized, yes they are the diamonds in the rough.
And that is the entire point of C4D, in my eyes at least, it's not for everyone. C4D is "a" tool in the tool-box. It has a specific purpose, and best use. When used wrong, like a pipe wrench to pound a nail, well let's just say "results may vary" is an understatement.
My most ideal C4D buyers are self-employed, often in first years, especially when in a service industry. Think Electricians, Plumbers etc.. Where they have great enduring incomes, and immense write-off potentials. They commonly run into the problem of being told they need to take 2 years of hit's on the paperwork, use less write-off's, to more accurately show income to achieve the financing approval looking for.
I don't use C4D for buyers seeking to gain what they can't actually afford, on faith and hope that someday in the future they will.
In my experience about 95% of people first are not so welcoming or interested in C4D, and for good reason, it's lessor known and has been used and abused by nefarious persons way too often. If I get 10 minutes to discuss it, 95% become accepting. It's about doing it legally and thoroughly. I always have full closings and R.E. Attorney on every one. I encourage inspections and appraisals. Sunlight is the best disinfectant, right.
I say DSCR just for simplicity of the paperwork. Key is more on using portfolio lending. When have such a relationship with a bank, and repetition, it breeds comprehension and security. To be more exact I'd, at whatever point, utelize a commercial financing "product", but as said portfolio, with a LOC. We would close via the LOC, then they complete paperwork to then roll that next purchase into the entire whole of the financing, and replenish that LOC. The actual account with the capitol would just sit in it's account, used just as eye-candy for the PA's, and warm-fuzzy feeling for the bank I'm working with.
One may wonder "but what about when you get ____ properties in there?". Keep scale in mind, there C4D's, they ideally finance out in 3-5yrs, so there is a natural churn to it all. And a person is going to do what, as-many-as 10 a year, maybe. 50 SFH's worth isn't really all that much $ in commercial finance terms.
If your concern on wrapping DSCR is on a what-if revenues get interrupted, I'd remind that by wrapping in a grouping you lower your risk exposure. 10 SFR's on a mortgage is much safer than 1, because loss of any 1's revenue is only a loss of 10% revenues, not 100%. Same way insurance works on risk exposure.
As for not needing the $1m, I know, I do these now, and have for years, hence why I can rattle on about them, because I actually do them and am speaking from experience not theory.
Well..... except for scaling, that is theory, I am not at-scale on it, not at all, haven't tried to scale but have thought on it a few times. I don't market it at all, 100% word of mouth....
CFD or land contracts as they are called in some other states I believe had their start in the land flipping bizz when banks simply wont or very rarely will finance anyone for land purchases compared to how widely available bank money is for improved properties. Growing up in the land bizz we never did CFD we just did a Trust deed and note and deeded the property to the folks.. that was CA.. However when I got into land and timber in the PNW ( OR WA ) contract for deed or land contract ( same thing) was the preferred method to secure the seller on private sale.. I did buy a Columbia River Front home in Wa on a contract for deed a few years ago but in the same area I bought little rental house on a trust deed and note from a private seller.. So just depends.. land contract and CFD were used to circumvent foreclosures was one of the main benefits.. I think @Joe S. point about Texas is there must of been a ton of fraud and abuse with CFD and lease options is why Texas takes a hard line against them.
Would be great to get an example of the numbers of what is possible in this space.
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes1y
Quote from @Austin Fowler:
Quote from @James Hamling:
Quote from @Joe S.:
Quote from @James Hamling:
Ok @Austin Fowler you really want to know what I'd do if dropped $1m liquid in my hands and I gotta utilize it in Real Estate, even though all of 7 people on BP will comprehend it......
About $5k into website, 2 VA's and system.
From there 1 VA calls on active buyers agents in designated markets presenting pitch to fill my calendly.
From there I pitch my C4D program for "nearly financed" buyers. When the buyers agent get's leads, works em, and finds there buyers are oh-so-close to approval but not there, they can still earn that commission via my C4D program.
Everything would revolve around "median" world of things.
Required minimum down payment is 20%. No exceptions. Everything else, there would be guidelines but just that, guidelines and negotiable whereas down has 0-flex.
All app's via website. Va#2 process's per training.
Buyers get a pre-qual budget. Buyers agent then helps them shop for such. When they find the right one, buyers enter agreement and post held escrowed down with me. Buyers agent submits PA, myself as buyer.
At end of day, it's infinite investing, because when closing is done and all $ has cleared I am personally $0 into any property, that $1m was simply used to launch the biz and then to leverage to landing the PA's.
The tenant-buyers financed the purchase via there down, which I utilize to unlock financing on the purchase. I would be using portfolio lending on DSCR underwriting, cross securitized by, you got it, the giant pile of cash sitting in an account spinning round n round.
Now being C4D buyers there is 2 spreads. First is on purchase price, second is interest rate.
I only have to capitalize risk exposure, overhead and profits because I have $0 invested capitol. Thus a small spread can equal sizable returns.
Now if you understand the math here, buyers doing 20% down on a buy price that has a profitable margin built in, then you understand how it would be more then 20% on my actual purchase. Probably more-so 30%.
In summary, I wouldn't deploy 90% of the $1m, I would leverage the lions share of the $1m to unlock infinite returns via OPM.
And I am now well liquid to cover any potential default issues if such were to occur. But being "median" focused and with C4D buyers who put 20%+ down aka significant skin into it, well one would have to chop off there own preverbal legs to give me a bloody nose. And I'd be well liquid to more then amply take care of any bloody-nose.
My risk exposure would be less then that of standard landlording, as the tenants would have far more securitization. So risk wise, it's a low-risk strategy in real estate.
And end of day, everybody is winning, the agents win, the end buyers win, and I win.
The trick to it all is setting and keeping good fences.
100% of C4D's I have seen blow-up have all had the common component of neglect on behalf of the investor. Selling to persons they shouldn't have, under securitizing, not keeping strong fences.
There ya-go Austin, that's what I'd do. And I'd dedicate as-much-as 20hrs a week to it. I'd fund my va's for 90 days and from there forward I'd require the venture to self-fund all operations from revenues. And that would be my "stop-loss". The moment it stops self-operating, I'd end it, regardless of a causation.
Thus preserving my capitol.
Hey James, you do not have to wait to get $1 million to do one or two of deals as a test run…IMO
I think that is a very thought out plan. A couple of thoughts though. From my observation, it is harder to get a substantial down payment and a higher than market interest rate at the same time. (Maybe your market is different.)
In Texas contract for deeds are not smiled upon at least that's the word on the street. I have a number of DSCR Loans that I am nervous to wrap if I could do the C4D like you're speaking over here I would definitely consider doing it.✅I have a friend of sorts that has wrapped some DSCR loans with no problems. I'm just a bit nervous to do so…
All very valid points Joe.
In my experience there is no shortage of person who want to buy on C4D, but those correctly capitalized, yes they are the diamonds in the rough.
And that is the entire point of C4D, in my eyes at least, it's not for everyone. C4D is "a" tool in the tool-box. It has a specific purpose, and best use. When used wrong, like a pipe wrench to pound a nail, well let's just say "results may vary" is an understatement.
My most ideal C4D buyers are self-employed, often in first years, especially when in a service industry. Think Electricians, Plumbers etc.. Where they have great enduring incomes, and immense write-off potentials. They commonly run into the problem of being told they need to take 2 years of hit's on the paperwork, use less write-off's, to more accurately show income to achieve the financing approval looking for.
I don't use C4D for buyers seeking to gain what they can't actually afford, on faith and hope that someday in the future they will.
In my experience about 95% of people first are not so welcoming or interested in C4D, and for good reason, it's lessor known and has been used and abused by nefarious persons way too often. If I get 10 minutes to discuss it, 95% become accepting. It's about doing it legally and thoroughly. I always have full closings and R.E. Attorney on every one. I encourage inspections and appraisals. Sunlight is the best disinfectant, right.
I say DSCR just for simplicity of the paperwork. Key is more on using portfolio lending. When have such a relationship with a bank, and repetition, it breeds comprehension and security. To be more exact I'd, at whatever point, utelize a commercial financing "product", but as said portfolio, with a LOC. We would close via the LOC, then they complete paperwork to then roll that next purchase into the entire whole of the financing, and replenish that LOC. The actual account with the capitol would just sit in it's account, used just as eye-candy for the PA's, and warm-fuzzy feeling for the bank I'm working with.
One may wonder "but what about when you get ____ properties in there?". Keep scale in mind, there C4D's, they ideally finance out in 3-5yrs, so there is a natural churn to it all. And a person is going to do what, as-many-as 10 a year, maybe. 50 SFH's worth isn't really all that much $ in commercial finance terms.
If your concern on wrapping DSCR is on a what-if revenues get interrupted, I'd remind that by wrapping in a grouping you lower your risk exposure. 10 SFR's on a mortgage is much safer than 1, because loss of any 1's revenue is only a loss of 10% revenues, not 100%. Same way insurance works on risk exposure.
As for not needing the $1m, I know, I do these now, and have for years, hence why I can rattle on about them, because I actually do them and am speaking from experience not theory.
Well..... except for scaling, that is theory, I am not at-scale on it, not at all, haven't tried to scale but have thought on it a few times. I don't market it at all, 100% word of mouth....
What scale has your current word of mouth approach got you to?
I'm not sure how to answer this question....
In your segment of the industry my nickname is "oz". If know of me, let's just leave it at that and not get into shop talk here as much in that space carried NDA's to them.
If talking specific to just C4D scale from word-of-mouth........ I don't have that exact # off top of head but shooting from the hip, in the range of 40/50'ish completed in last few years. Since covid.
It's kinda funny how memory bench-marks certain events, like "since covid" or post GFC etc., but that's how I readily recall things, in which "era" they were.
- 1yRyan SpathBusiness MemberReal Estate Agent · Boise, ID · Member since 2017 · 566 posts · 377 votes
Great conversation. I'm both an investor and an agent, and my passion lies in helping people enter the market through FHA financing—often by house hacking with a duplex to offset their mortgage. Beyond that, I love working with clients to scale strategically, with a goal of building 10 properties over 12–15 years and ultimately achieving financial independence.
This is the same strategy my wife and I have followed successfully. Over time, our target returns have become more conservative. Today, we look for a minimum 6% cash-on-cash returns, along with loan paydown and depreciation. We self-manage our portfolio and also guide our clients in doing the same. The approach is highly scalable, but ultimately depends on each person’s earnings, savings rate, goals, and timeline.
If we were fortunate enough to receive $1M tax-free, our plan would likely be to purchase three brand-new properties in Canyon County (Caldwell, specifically). Each could rent for roughly $2,000 per month, generating $6,000 in gross monthly income. After accounting for ~$3,500 in annual taxes and ~$900 in annual insurance per property, the net would be around $61K per year.
While that isn’t flashy, the benefit of new construction is minimal large capital expenditures for the next 8–10 years. From that $6K monthly income, we’d allocate 30% (~$1,800) to a capex reserve, leaving ~$4,200 in additional free cash flow for our family. On top of that, as active investors, we’d utilize depreciation to offset income—around $10,545 per home annually.
If additional tax sheltering were needed, we could explore leveraging two of the properties at 50%, buying four instead of three: two free and clear, and two with modest debt. That flexibility is the beauty of a conservative, scalable model.
- Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes1y
Quote from @Ryan Spath:
Great conversation. I'm both an investor and an agent, and my passion lies in helping people enter the market through FHA financing—often by house hacking with a duplex to offset their mortgage. Beyond that, I love working with clients to scale strategically, with a goal of building 10 properties over 12–15 years and ultimately achieving financial independence.
This is the same strategy my wife and I have followed successfully. Over time, our target returns have become more conservative. Today, we look for a minimum 6% cash-on-cash returns, along with loan paydown and depreciation. We self-manage our portfolio and also guide our clients in doing the same. The approach is highly scalable, but ultimately depends on each person’s earnings, savings rate, goals, and timeline.
If we were fortunate enough to receive $1M tax-free, our plan would likely be to purchase three brand-new properties in Canyon County (Caldwell, specifically). Each could rent for roughly $2,000 per month, generating $6,000 in gross monthly income. After accounting for ~$3,500 in annual taxes and ~$900 in annual insurance per property, the net would be around $61K per year.
While that isn’t flashy, the benefit of new construction is minimal large capital expenditures for the next 8–10 years. From that $6K monthly income, we’d allocate 30% (~$1,800) to a capex reserve, leaving ~$4,200 in additional free cash flow for our family. On top of that, as active investors, we’d utilize depreciation to offset income—around $10,545 per home annually.
If additional tax sheltering were needed, we could explore leveraging two of the properties at 50%, buying four instead of three: two free and clear, and two with modest debt. That flexibility is the beauty of a conservative, scalable model.
In addition to the capex budget, what loss of rent do you estimate for vacancy? Are there any other costs of ownership that you bear? Advertising, HOA, etc?
- 1yRyan SpathBusiness MemberReal Estate Agent · Boise, ID · Member since 2017 · 566 posts · 377 votes
Quote from @Austin Fowler:
Quote from @Ryan Spath:
Great conversation. I'm both an investor and an agent, and my passion lies in helping people enter the market through FHA financing—often by house hacking with a duplex to offset their mortgage. Beyond that, I love working with clients to scale strategically, with a goal of building 10 properties over 12–15 years and ultimately achieving financial independence.
This is the same strategy my wife and I have followed successfully. Over time, our target returns have become more conservative. Today, we look for a minimum 6% cash-on-cash returns, along with loan paydown and depreciation. We self-manage our portfolio and also guide our clients in doing the same. The approach is highly scalable, but ultimately depends on each person’s earnings, savings rate, goals, and timeline.
If we were fortunate enough to receive $1M tax-free, our plan would likely be to purchase three brand-new properties in Canyon County (Caldwell, specifically). Each could rent for roughly $2,000 per month, generating $6,000 in gross monthly income. After accounting for ~$3,500 in annual taxes and ~$900 in annual insurance per property, the net would be around $61K per year.
While that isn’t flashy, the benefit of new construction is minimal large capital expenditures for the next 8–10 years. From that $6K monthly income, we’d allocate 30% (~$1,800) to a capex reserve, leaving ~$4,200 in additional free cash flow for our family. On top of that, as active investors, we’d utilize depreciation to offset income—around $10,545 per home annually.
If additional tax sheltering were needed, we could explore leveraging two of the properties at 50%, buying four instead of three: two free and clear, and two with modest debt. That flexibility is the beauty of a conservative, scalable model.
In addition to the capex budget, what loss of rent do you estimate for vacancy? Are there any other costs of ownership that you bear? Advertising, HOA, etc?
Austin- Vacancy in this area is nearly 8% currently, as mentioned we self-manage and proactively advertise when current residents decide not to renew, we typically know 60 days prior to lease end. Personally, we have never had more than a 2-week vacancy in this market in the past 8 years, of course this can change with additional supply being built and the Absorbtion rate of the new supply this has just been my personal experience. Advertising is low, $29 for premium Zillow listings that also syndicates with other sites, and we use avail to syndicate with realtor etc. FB marketplace is also a great avenue for prospective renters. HOA is ~300-500 depending on the community.
- Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes1y
Quote from @Ryan Spath:
Quote from @Austin Fowler:
Quote from @Ryan Spath:
Great conversation. I'm both an investor and an agent, and my passion lies in helping people enter the market through FHA financing—often by house hacking with a duplex to offset their mortgage. Beyond that, I love working with clients to scale strategically, with a goal of building 10 properties over 12–15 years and ultimately achieving financial independence.
This is the same strategy my wife and I have followed successfully. Over time, our target returns have become more conservative. Today, we look for a minimum 6% cash-on-cash returns, along with loan paydown and depreciation. We self-manage our portfolio and also guide our clients in doing the same. The approach is highly scalable, but ultimately depends on each person’s earnings, savings rate, goals, and timeline.
If we were fortunate enough to receive $1M tax-free, our plan would likely be to purchase three brand-new properties in Canyon County (Caldwell, specifically). Each could rent for roughly $2,000 per month, generating $6,000 in gross monthly income. After accounting for ~$3,500 in annual taxes and ~$900 in annual insurance per property, the net would be around $61K per year.
While that isn’t flashy, the benefit of new construction is minimal large capital expenditures for the next 8–10 years. From that $6K monthly income, we’d allocate 30% (~$1,800) to a capex reserve, leaving ~$4,200 in additional free cash flow for our family. On top of that, as active investors, we’d utilize depreciation to offset income—around $10,545 per home annually.
If additional tax sheltering were needed, we could explore leveraging two of the properties at 50%, buying four instead of three: two free and clear, and two with modest debt. That flexibility is the beauty of a conservative, scalable model.
In addition to the capex budget, what loss of rent do you estimate for vacancy? Are there any other costs of ownership that you bear? Advertising, HOA, etc?
Austin- Vacancy in this area is nearly 8% currently, as mentioned we self-manage and proactively advertise when current residents decide not to renew, we typically know 60 days prior to lease end. Personally, we have never had more than a 2-week vacancy in this market in the past 8 years, of course this can change with additional supply being built and the Absorbtion rate of the new supply this has just been my personal experience. Advertising is low, $29 for premium Zillow listings that also syndicates with other sites, and we use avail to syndicate with realtor etc. FB marketplace is also a great avenue for prospective renters. HOA is ~300-500 depending on the community.
Great, so around 5% cash flow on the million. What level of capital appreciation do you think these assets might experience based on recent market history? What would the closing costs be?
- Investor · Louisville, KY · Member since 2020 · 52 posts · 42 votes1y
Funny you should ask. I just came across something today that I believe would be a great investment for one million.
During COVID, in my area, the county was throwing permits at people to install, use, and lease RV hookups. Once it all died down, the county had a change of heart. Permits are expiring, and the county is not renewing many of them.
There is currently a small RV park that the county has denied renewal on, but instead wants 4 duplexes built in that spot, with septic systems already installed, and utilities already there. The park is up for sale for about 200k (I haven't checked on that, but that's what I am being told).
With $1M, I would purchase the park at the lowest price possible, and build all four duplexes the county is asking for. I have found in the past that if you give the city/county what they want, they make the process silky smooth for you.
I would then sell two, recouping most of the initial investment with half the property, and rent the remaining four units for around 80-90% cash flow (making up for any gap between the sale of the other two and the initial investment). Once the initial investment was completely recouped, I could do any of the following:
1. Continue to hold for a large cash flow
2. Leverage the equity, reducing my cash flow, but allowing me to invest more elsewhere
3. Sell one or both for a massive cash boost, and invest that elsewhere also
I know there are many possibilities, but that is just what I've come up with in the last few hours. I have a basic understanding of development costs vs property costs in the area, so all of this relies on what I know to be true. There is a lot of research and number crunching to do before this becomes a real opportunity. I mainly do flips, so this would be a branch out for me, but my ultimate goal is to move to development when funds allow, anyway.
- Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes1y
In my own case, I'll be putting the $1M in Crossing 5 from BAM capital. That's what I actually plan to do IRL. This is just the latest deal due diligence has been completed on, I've got no financial connection to the project. I like ground up multifamily development, and participating in such projects as an LP. Love addressing housing shortages. This will take me from 2200+ doors to 2500+ doors as an LP.
- 1yJoe S.Pro MemberInvestor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votesThis will take me from 2200+ doors to 2500+ doors as an LP.
Quote from @Austin Fowler:
In my own case, I'll be putting the $1M in Crossing 5 from BAM capital. That's what I actually plan to do IRL. This is just the latest deal due diligence has been completed on, I've got no financial connection to the project. I like ground up multifamily development, and participating in such projects as an LP. Love addressing housing shortages. This will take me from 2200+ doors to 2500+ doors as an LP.
Can you expound on that a bit more, please?
- 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Joe S.:
This will take me from 2200+ doors to 2500+ doors as an LP.Quote from @Austin Fowler:
In my own case, I'll be putting the $1M in Crossing 5 from BAM capital. That's what I actually plan to do IRL. This is just the latest deal due diligence has been completed on, I've got no financial connection to the project. I like ground up multifamily development, and participating in such projects as an LP. Love addressing housing shortages. This will take me from 2200+ doors to 2500+ doors as an LP.
Can you expound on that a bit more, please?
I am in 2 BAM funds so I have about 500 or more doors as an LP :) BAM is a well run company and one of the syndicators that has done well the last 5 years compared to others that have tanked as we have read about. - Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes1y
Quote from @Joe S.:
This will take me from 2200+ doors to 2500+ doors as an LP.Quote from @Austin Fowler:
In my own case, I'll be putting the $1M in Crossing 5 from BAM capital. That's what I actually plan to do IRL. This is just the latest deal due diligence has been completed on, I've got no financial connection to the project. I like ground up multifamily development, and participating in such projects as an LP. Love addressing housing shortages. This will take me from 2200+ doors to 2500+ doors as an LP.
Can you expound on that a bit more, please?
Sure, happy to elaborate. I currently have a $31M portfolio spanning cash, stocks, renewable energy, 33 houses, 7 flips in progress, and an LP stake in 2200 doors of multifamily. LP is short for limited partner, and just means you contribute capital to a big deal managed by general partners (GPs). Being an LP in a multifamily deal means you are totally hands-off. You do the due diligence on the GPs (the operators of the deal) and the deal itself, choose the best operators with the best deals, and then you wire money into their deal. There are many, many different ways to invest in multifamily. My personal preference is development since I like being part of the process of increasing housing supply. As with anything in real estate, you do best when you find something you really enjoy. I *really* enjoy participating in building things. My current multifamily portfolio spans 15 addresses across 8 states, and 8 different operators. The multifamily properties range from just 32 units to 330 units. Each unit is a door. The next deal (Crossing 5 from BAM capital) that I'll add to my portfolio will be a mix of multifamily apartments, townhomes, fully serviced with pickleball courts, community center, etc, etc --- an entire community totaling 315 doors. The general parameters in multifamily development are frequently approximately four years to take dirt, build a community, lease it out, and sell it to a pension fund. The finished product is viewed by the pension fund a bit like a bond. If 5% income generated on capital (plus depreciation tax benefits and asset appreciation as rents grow) is deemed acceptable then a building generating $10 million of net operating income (NOI) each year would be worth $200 million. A typical development deal at the moment tries to build a building at a cost such that net operating income is around 7% of the total build cost. In other words built for significantly less than it can be sold for. Using the above numbers you would need to complete the building using under $143M to hit 7% NOI. In my case as an investor I generate massive cash flow by getting involved in a series of development deals: wire money in, four years later get more money back with the upside taxed as long-term capital gains, and the tax due only if I haven't generated sufficient deductions in prior years from other assets, and generally speaking I have more deductions than I need to zero out my income on paper each year. It's a conveyor belt of deals rather than holding assets long term for cash flow. Each development typically targets doubling the money you put in over those 4 years. Putting $1M into a single deal may seem like a lot, but it is less than 5% of my total portfolio, so it is an appropriate addition to it, and it will bring my total doors as an LP to over 2500. I currently have approximately $8M total invested in multifamily. Happy to connect with anyone that wants to learn more.
- 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Austin Fowler:
Quote from @Joe S.:
This will take me from 2200+ doors to 2500+ doors as an LP.Quote from @Austin Fowler:
In my own case, I'll be putting the $1M in Crossing 5 from BAM capital. That's what I actually plan to do IRL. This is just the latest deal due diligence has been completed on, I've got no financial connection to the project. I like ground up multifamily development, and participating in such projects as an LP. Love addressing housing shortages. This will take me from 2200+ doors to 2500+ doors as an LP.
Can you expound on that a bit more, please?
Sure, happy to elaborate. I currently have a $31M portfolio spanning cash, stocks, renewable energy, 33 houses, 7 flips in progress, and an LP stake in 2200 doors of multifamily. LP is short for limited partner, and just means you contribute capital to a big deal managed by general partners (GPs). Being an LP in a multifamily deal means you are totally hands-off. You do the due diligence on the GPs (the operators of the deal) and the deal itself, choose the best operators with the best deals, and then you wire money into their deal. There are many, many different ways to invest in multifamily. My personal preference is development since I like being part of the process of increasing housing supply. As with anything in real estate, you do best when you find something you really enjoy. I *really* enjoy participating in building things. My current multifamily portfolio spans 15 addresses across 8 states, and 8 different operators. The multifamily properties range from just 32 units to 330 units. Each unit is a door. The next deal (Crossing 5 from BAM capital) that I'll add to my portfolio will be a mix of multifamily apartments, townhomes, fully serviced with pickleball courts, community center, etc, etc --- an entire community totaling 315 doors. The general parameters in multifamily development are frequently approximately four years to take dirt, build a community, lease it out, and sell it to a pension fund. The finished product is viewed by the pension fund a bit like a bond. If 5% income generated on capital (plus depreciation tax benefits and asset appreciation as rents grow) is deemed acceptable then a building generating $10 million of net operating income (NOI) each year would be worth $200 million. A typical development deal at the moment tries to build a building at a cost such that net operating income is around 7% of the total build cost. In other words built for significantly less than it can be sold for. Using the above numbers you would need to complete the building using under $143M to hit 7% NOI. In my case as an investor I generate massive cash flow by getting involved in a series of development deals: wire money in, four years later get more money back with the upside taxed as long-term capital gains, and the tax due only if I haven't generated sufficient deductions in prior years from other assets, and generally speaking I have more deductions than I need to zero out my income on paper each year. It's a conveyor belt of deals rather than holding assets long term for cash flow. Each development typically targets doubling the money you put in over those 4 years. Putting $1M into a single deal may seem like a lot, but it is less than 5% of my total portfolio, so it is an appropriate addition to it, and it will bring my total doors as an LP to over 2500. I currently have approximately $8M total invested in multifamily. Happy to connect with anyone that wants to learn more.
Austin ,
On the build to sell like your talking about how do you get cap gains and not ordinary income the building is being built to sell its inventory.. Just like when I built out my 90 home project here in Oregon its all ordinary income.. Unless of course the idea is build lease out and hold for at least a year or more then sell . But then your having to recapture the depreciation although I dont think you get depreciation for the whole investment only when the asset is put into service.. So I guess at C O ( Certificate of Occupany) is when the depreciation starts.. I dont know for sure but I am thinking I might be right I will have to check in with bam on the Crossing 5 deal .. thanks for mentioning that one. - Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes1y
Quote from @Jay Hinrichs:
Quote from @Austin Fowler:
Quote from @Joe S.:
This will take me from 2200+ doors to 2500+ doors as an LP.Quote from @Austin Fowler:
In my own case, I'll be putting the $1M in Crossing 5 from BAM capital. That's what I actually plan to do IRL. This is just the latest deal due diligence has been completed on, I've got no financial connection to the project. I like ground up multifamily development, and participating in such projects as an LP. Love addressing housing shortages. This will take me from 2200+ doors to 2500+ doors as an LP.
Can you expound on that a bit more, please?
Sure, happy to elaborate. I currently have a $31M portfolio spanning cash, stocks, renewable energy, 33 houses, 7 flips in progress, and an LP stake in 2200 doors of multifamily. LP is short for limited partner, and just means you contribute capital to a big deal managed by general partners (GPs). Being an LP in a multifamily deal means you are totally hands-off. You do the due diligence on the GPs (the operators of the deal) and the deal itself, choose the best operators with the best deals, and then you wire money into their deal. There are many, many different ways to invest in multifamily. My personal preference is development since I like being part of the process of increasing housing supply. As with anything in real estate, you do best when you find something you really enjoy. I *really* enjoy participating in building things. My current multifamily portfolio spans 15 addresses across 8 states, and 8 different operators. The multifamily properties range from just 32 units to 330 units. Each unit is a door. The next deal (Crossing 5 from BAM capital) that I'll add to my portfolio will be a mix of multifamily apartments, townhomes, fully serviced with pickleball courts, community center, etc, etc --- an entire community totaling 315 doors. The general parameters in multifamily development are frequently approximately four years to take dirt, build a community, lease it out, and sell it to a pension fund. The finished product is viewed by the pension fund a bit like a bond. If 5% income generated on capital (plus depreciation tax benefits and asset appreciation as rents grow) is deemed acceptable then a building generating $10 million of net operating income (NOI) each year would be worth $200 million. A typical development deal at the moment tries to build a building at a cost such that net operating income is around 7% of the total build cost. In other words built for significantly less than it can be sold for. Using the above numbers you would need to complete the building using under $143M to hit 7% NOI. In my case as an investor I generate massive cash flow by getting involved in a series of development deals: wire money in, four years later get more money back with the upside taxed as long-term capital gains, and the tax due only if I haven't generated sufficient deductions in prior years from other assets, and generally speaking I have more deductions than I need to zero out my income on paper each year. It's a conveyor belt of deals rather than holding assets long term for cash flow. Each development typically targets doubling the money you put in over those 4 years. Putting $1M into a single deal may seem like a lot, but it is less than 5% of my total portfolio, so it is an appropriate addition to it, and it will bring my total doors as an LP to over 2500. I currently have approximately $8M total invested in multifamily. Happy to connect with anyone that wants to learn more.
Austin ,
On the build to sell like your talking about how do you get cap gains and not ordinary income the building is being built to sell its inventory.. Just like when I built out my 90 home project here in Oregon its all ordinary income.. Unless of course the idea is build lease out and hold for at least a year or more then sell . But then your having to recapture the depreciation although I dont think you get depreciation for the whole investment only when the asset is put into service.. So I guess at C O ( Certificate of Occupany) is when the depreciation starts.. I dont know for sure but I am thinking I might be right I will have to check in with bam on the Crossing 5 deal .. thanks for mentioning that one.Ground up multi-family with hundreds of units does indeed get leased up and stabilized before sale. Part of the reason these projects take multiple years from the point of view of the investor. There can be some depreciation associated with participating, and this will be recaptured, so this is not where the bulk of my deductions come from. I still have millions in banked bonus depreciation from when I bought 33 houses in 18 months during covid. Those houses continue to generate additional depreciation deductions each year. I also run a personally guaranteed debt fund, and that generates very substantial interest deductions, over a $1M a year. That business itself also has substantial costs to run that become additional deductions. In summary, the multifamily is taxed as capital gains, but my deductions come from elsewhere.
- 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Austin Fowler:
Quote from @Jay Hinrichs:
Quote from @Austin Fowler:
Quote from @Joe S.:
This will take me from 2200+ doors to 2500+ doors as an LP.Quote from @Austin Fowler:
In my own case, I'll be putting the $1M in Crossing 5 from BAM capital. That's what I actually plan to do IRL. This is just the latest deal due diligence has been completed on, I've got no financial connection to the project. I like ground up multifamily development, and participating in such projects as an LP. Love addressing housing shortages. This will take me from 2200+ doors to 2500+ doors as an LP.
Can you expound on that a bit more, please?
Sure, happy to elaborate. I currently have a $31M portfolio spanning cash, stocks, renewable energy, 33 houses, 7 flips in progress, and an LP stake in 2200 doors of multifamily. LP is short for limited partner, and just means you contribute capital to a big deal managed by general partners (GPs). Being an LP in a multifamily deal means you are totally hands-off. You do the due diligence on the GPs (the operators of the deal) and the deal itself, choose the best operators with the best deals, and then you wire money into their deal. There are many, many different ways to invest in multifamily. My personal preference is development since I like being part of the process of increasing housing supply. As with anything in real estate, you do best when you find something you really enjoy. I *really* enjoy participating in building things. My current multifamily portfolio spans 15 addresses across 8 states, and 8 different operators. The multifamily properties range from just 32 units to 330 units. Each unit is a door. The next deal (Crossing 5 from BAM capital) that I'll add to my portfolio will be a mix of multifamily apartments, townhomes, fully serviced with pickleball courts, community center, etc, etc --- an entire community totaling 315 doors. The general parameters in multifamily development are frequently approximately four years to take dirt, build a community, lease it out, and sell it to a pension fund. The finished product is viewed by the pension fund a bit like a bond. If 5% income generated on capital (plus depreciation tax benefits and asset appreciation as rents grow) is deemed acceptable then a building generating $10 million of net operating income (NOI) each year would be worth $200 million. A typical development deal at the moment tries to build a building at a cost such that net operating income is around 7% of the total build cost. In other words built for significantly less than it can be sold for. Using the above numbers you would need to complete the building using under $143M to hit 7% NOI. In my case as an investor I generate massive cash flow by getting involved in a series of development deals: wire money in, four years later get more money back with the upside taxed as long-term capital gains, and the tax due only if I haven't generated sufficient deductions in prior years from other assets, and generally speaking I have more deductions than I need to zero out my income on paper each year. It's a conveyor belt of deals rather than holding assets long term for cash flow. Each development typically targets doubling the money you put in over those 4 years. Putting $1M into a single deal may seem like a lot, but it is less than 5% of my total portfolio, so it is an appropriate addition to it, and it will bring my total doors as an LP to over 2500. I currently have approximately $8M total invested in multifamily. Happy to connect with anyone that wants to learn more.
Austin ,
On the build to sell like your talking about how do you get cap gains and not ordinary income the building is being built to sell its inventory.. Just like when I built out my 90 home project here in Oregon its all ordinary income.. Unless of course the idea is build lease out and hold for at least a year or more then sell . But then your having to recapture the depreciation although I dont think you get depreciation for the whole investment only when the asset is put into service.. So I guess at C O ( Certificate of Occupany) is when the depreciation starts.. I dont know for sure but I am thinking I might be right I will have to check in with bam on the Crossing 5 deal .. thanks for mentioning that one.Ground up multi-family with hundreds of units does indeed get leased up and stabilized before sale. Part of the reason these projects take multiple years from the point of view of the investor. There can be some depreciation associated with participating, and this will be recaptured, so this is not where the bulk of my deductions come from. I still have millions in banked bonus depreciation from when I bought 33 houses in 18 months during covid. Those houses continue to generate additional depreciation deductions each year. I also run a personally guaranteed debt fund, and that generates very substantial interest deductions, over a $1M a year. That business itself also has substantial costs to run that become additional deductions. In summary, the multifamily is taxed as capital gains, but my deductions come from elsewhere.
my question was not about your personal tax situation.. it was how tax treatment is done on a ground up apartment syndication that their intent is to sell it like inventory.. Its just like my new builds they are inventory so we do not get cap gains.. its why we need to make 100% or more COC which we do .. so when your paying ordinary income tax it still beneficial to be a new home builder. I have 4 entitlement deals going 3 as a capital partner one as a secured lender and those we will flip the plats one of them has an 8 figure NET profit which will be taxed at ordinary income rates.. ITs a 320 lot deal in WA DC sold to Lennar Corp.. the other two I did there one was sold to Toll Brothers and the other a regional. The one were I did a debt deal is in Bend Oregon and also sold to Lennar for townhouses and their apartment buidling arm. But again these are all ordinary income events.. so I guess its just the old adage we want right ones not write offs.. :) - Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes1y
Quote from @Jay Hinrichs:
Quote from @Austin Fowler:
Quote from @Jay Hinrichs:
Quote from @Austin Fowler:
Quote from @Joe S.:
This will take me from 2200+ doors to 2500+ doors as an LP.Quote from @Austin Fowler:
In my own case, I'll be putting the $1M in Crossing 5 from BAM capital. That's what I actually plan to do IRL. This is just the latest deal due diligence has been completed on, I've got no financial connection to the project. I like ground up multifamily development, and participating in such projects as an LP. Love addressing housing shortages. This will take me from 2200+ doors to 2500+ doors as an LP.
Can you expound on that a bit more, please?
Sure, happy to elaborate. I currently have a $31M portfolio spanning cash, stocks, renewable energy, 33 houses, 7 flips in progress, and an LP stake in 2200 doors of multifamily. LP is short for limited partner, and just means you contribute capital to a big deal managed by general partners (GPs). Being an LP in a multifamily deal means you are totally hands-off. You do the due diligence on the GPs (the operators of the deal) and the deal itself, choose the best operators with the best deals, and then you wire money into their deal. There are many, many different ways to invest in multifamily. My personal preference is development since I like being part of the process of increasing housing supply. As with anything in real estate, you do best when you find something you really enjoy. I *really* enjoy participating in building things. My current multifamily portfolio spans 15 addresses across 8 states, and 8 different operators. The multifamily properties range from just 32 units to 330 units. Each unit is a door. The next deal (Crossing 5 from BAM capital) that I'll add to my portfolio will be a mix of multifamily apartments, townhomes, fully serviced with pickleball courts, community center, etc, etc --- an entire community totaling 315 doors. The general parameters in multifamily development are frequently approximately four years to take dirt, build a community, lease it out, and sell it to a pension fund. The finished product is viewed by the pension fund a bit like a bond. If 5% income generated on capital (plus depreciation tax benefits and asset appreciation as rents grow) is deemed acceptable then a building generating $10 million of net operating income (NOI) each year would be worth $200 million. A typical development deal at the moment tries to build a building at a cost such that net operating income is around 7% of the total build cost. In other words built for significantly less than it can be sold for. Using the above numbers you would need to complete the building using under $143M to hit 7% NOI. In my case as an investor I generate massive cash flow by getting involved in a series of development deals: wire money in, four years later get more money back with the upside taxed as long-term capital gains, and the tax due only if I haven't generated sufficient deductions in prior years from other assets, and generally speaking I have more deductions than I need to zero out my income on paper each year. It's a conveyor belt of deals rather than holding assets long term for cash flow. Each development typically targets doubling the money you put in over those 4 years. Putting $1M into a single deal may seem like a lot, but it is less than 5% of my total portfolio, so it is an appropriate addition to it, and it will bring my total doors as an LP to over 2500. I currently have approximately $8M total invested in multifamily. Happy to connect with anyone that wants to learn more.
Austin ,
On the build to sell like your talking about how do you get cap gains and not ordinary income the building is being built to sell its inventory.. Just like when I built out my 90 home project here in Oregon its all ordinary income.. Unless of course the idea is build lease out and hold for at least a year or more then sell . But then your having to recapture the depreciation although I dont think you get depreciation for the whole investment only when the asset is put into service.. So I guess at C O ( Certificate of Occupany) is when the depreciation starts.. I dont know for sure but I am thinking I might be right I will have to check in with bam on the Crossing 5 deal .. thanks for mentioning that one.Ground up multi-family with hundreds of units does indeed get leased up and stabilized before sale. Part of the reason these projects take multiple years from the point of view of the investor. There can be some depreciation associated with participating, and this will be recaptured, so this is not where the bulk of my deductions come from. I still have millions in banked bonus depreciation from when I bought 33 houses in 18 months during covid. Those houses continue to generate additional depreciation deductions each year. I also run a personally guaranteed debt fund, and that generates very substantial interest deductions, over a $1M a year. That business itself also has substantial costs to run that become additional deductions. In summary, the multifamily is taxed as capital gains, but my deductions come from elsewhere.
my question was not about your personal tax situation.. it was how tax treatment is done on a ground up apartment syndication that their intent is to sell it like inventory.. Its just like my new builds they are inventory so we do not get cap gains.. its why we need to make 100% or more COC which we do .. so when your paying ordinary income tax it still beneficial to be a new home builder. I have 4 entitlement deals going 3 as a capital partner one as a secured lender and those we will flip the plats one of them has an 8 figure NET profit which will be taxed at ordinary income rates.. ITs a 320 lot deal in WA DC sold to Lennar Corp.. the other two I did there one was sold to Toll Brothers and the other a regional. The one were I did a debt deal is in Bend Oregon and also sold to Lennar for townhouses and their apartment buidling arm. But again these are all ordinary income events.. so I guess its just the old adage we want right ones not write offs.. :)Crossing 5 will be taxed as long term capital gains. Just double checked this with the operator.
- 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Austin Fowler:
Quote from @Jay Hinrichs:
Quote from @Austin Fowler:
Quote from @Jay Hinrichs:
Quote from @Austin Fowler:
Quote from @Joe S.:
This will take me from 2200+ doors to 2500+ doors as an LP.Quote from @Austin Fowler:
In my own case, I'll be putting the $1M in Crossing 5 from BAM capital. That's what I actually plan to do IRL. This is just the latest deal due diligence has been completed on, I've got no financial connection to the project. I like ground up multifamily development, and participating in such projects as an LP. Love addressing housing shortages. This will take me from 2200+ doors to 2500+ doors as an LP.
Can you expound on that a bit more, please?
Sure, happy to elaborate. I currently have a $31M portfolio spanning cash, stocks, renewable energy, 33 houses, 7 flips in progress, and an LP stake in 2200 doors of multifamily. LP is short for limited partner, and just means you contribute capital to a big deal managed by general partners (GPs). Being an LP in a multifamily deal means you are totally hands-off. You do the due diligence on the GPs (the operators of the deal) and the deal itself, choose the best operators with the best deals, and then you wire money into their deal. There are many, many different ways to invest in multifamily. My personal preference is development since I like being part of the process of increasing housing supply. As with anything in real estate, you do best when you find something you really enjoy. I *really* enjoy participating in building things. My current multifamily portfolio spans 15 addresses across 8 states, and 8 different operators. The multifamily properties range from just 32 units to 330 units. Each unit is a door. The next deal (Crossing 5 from BAM capital) that I'll add to my portfolio will be a mix of multifamily apartments, townhomes, fully serviced with pickleball courts, community center, etc, etc --- an entire community totaling 315 doors. The general parameters in multifamily development are frequently approximately four years to take dirt, build a community, lease it out, and sell it to a pension fund. The finished product is viewed by the pension fund a bit like a bond. If 5% income generated on capital (plus depreciation tax benefits and asset appreciation as rents grow) is deemed acceptable then a building generating $10 million of net operating income (NOI) each year would be worth $200 million. A typical development deal at the moment tries to build a building at a cost such that net operating income is around 7% of the total build cost. In other words built for significantly less than it can be sold for. Using the above numbers you would need to complete the building using under $143M to hit 7% NOI. In my case as an investor I generate massive cash flow by getting involved in a series of development deals: wire money in, four years later get more money back with the upside taxed as long-term capital gains, and the tax due only if I haven't generated sufficient deductions in prior years from other assets, and generally speaking I have more deductions than I need to zero out my income on paper each year. It's a conveyor belt of deals rather than holding assets long term for cash flow. Each development typically targets doubling the money you put in over those 4 years. Putting $1M into a single deal may seem like a lot, but it is less than 5% of my total portfolio, so it is an appropriate addition to it, and it will bring my total doors as an LP to over 2500. I currently have approximately $8M total invested in multifamily. Happy to connect with anyone that wants to learn more.
Austin ,
On the build to sell like your talking about how do you get cap gains and not ordinary income the building is being built to sell its inventory.. Just like when I built out my 90 home project here in Oregon its all ordinary income.. Unless of course the idea is build lease out and hold for at least a year or more then sell . But then your having to recapture the depreciation although I dont think you get depreciation for the whole investment only when the asset is put into service.. So I guess at C O ( Certificate of Occupany) is when the depreciation starts.. I dont know for sure but I am thinking I might be right I will have to check in with bam on the Crossing 5 deal .. thanks for mentioning that one.Ground up multi-family with hundreds of units does indeed get leased up and stabilized before sale. Part of the reason these projects take multiple years from the point of view of the investor. There can be some depreciation associated with participating, and this will be recaptured, so this is not where the bulk of my deductions come from. I still have millions in banked bonus depreciation from when I bought 33 houses in 18 months during covid. Those houses continue to generate additional depreciation deductions each year. I also run a personally guaranteed debt fund, and that generates very substantial interest deductions, over a $1M a year. That business itself also has substantial costs to run that become additional deductions. In summary, the multifamily is taxed as capital gains, but my deductions come from elsewhere.
my question was not about your personal tax situation.. it was how tax treatment is done on a ground up apartment syndication that their intent is to sell it like inventory.. Its just like my new builds they are inventory so we do not get cap gains.. its why we need to make 100% or more COC which we do .. so when your paying ordinary income tax it still beneficial to be a new home builder. I have 4 entitlement deals going 3 as a capital partner one as a secured lender and those we will flip the plats one of them has an 8 figure NET profit which will be taxed at ordinary income rates.. ITs a 320 lot deal in WA DC sold to Lennar Corp.. the other two I did there one was sold to Toll Brothers and the other a regional. The one were I did a debt deal is in Bend Oregon and also sold to Lennar for townhouses and their apartment buidling arm. But again these are all ordinary income events.. so I guess its just the old adage we want right ones not write offs.. :)Crossing 5 will be taxed as long term capital gains. Just double checked this with the operator.
Ya I wrote Ivan this morning.. I might join in this one..
- Shawnee Mission, KS · Member since 2016 · 719 posts · 313 votes1y
Pay off all credit cards and any high rate loans then I would spend half on a class A-B rental in a Midwest burb ,the rest I would buy a index ETF covering major benchmarks then dabble in gold and Bitcoin with the change left over .
- Rental Property Investor · St. Paul, MN · Member since 2016 · 3k+ posts · 3k+ votes1y
For me personally, I would use it to continue to expand our existing multifamily portfolio, by investing larger dollar amounts alongside our LP's. I would also use some of it to help build out a better experience for our investors and a few other initiatives within the company.
If I'm giving advice to others, that becomes a bit more difficult. Of course, I am biased and think that person should invest a portion of it into one of our syndications or into another operator's syndication that they trust. Beyond that, they should diversify into multiple asset classes, looking at oil and gas, tech, start-ups, manufacturing, etc.
The most important considerations are what do you understand and what gets you excited? - MD/DC · Member since 2024 · 1k+ posts · 1k+ votes1y
No debt other than a 1.875% mortgage that I have no intention of paying off early. I would buy another modest condo walking distance to beach $650,000 ish and the rest in VTSAX for the win.
- Rental Property Investor · San Francisco Bay Area · Member since 2022 · 1k+ posts · 1k+ votes1y
I'd invest up to $200k to $300k in real estate. For example $100,000 down payment on a $500,000 single family home. The remaining amount for reserves for maintenance, cap ex. I'm looking at new builds in Nevada specifically.
The other $700k to $800k I'd invest in public markets (index funds, some stocks, a few REITs, Master Limited Partnerships which have to do with energy resource, Business Development Companies). And maybe buy some gold or other precious metals. For me, I'm trying to stay liquid.
My answer is based on losing money on buying Class C properties and I just find real estate stressful on top of a demanding W2 job and looking for a deal in 2025 with higher rates to be mentally exhausting (the last 3 years especially). I'm not trying scale to 50 or 100 units.
- 1yRonald RohdePro MemberAttorney · Dallas, TX · Member since 2016 · 5k+ posts · 2k+ votes
I'm actively investing about this much.
I have $500k in 30 day T bills and "high" yield savings 4.2%, but only until I'm ready to close on another industrial deal. I am under contract on more industrial NNN properties.
I would keep $200k cash for a year of living expenses.
I would like to find another $2-300k in industrial hard money loan, a partner and I loaned about $5m at 10% rates through the past few years...waiting for one $2m loan to be repaid in the next 6 months...
- Real Estate Broker · Chicago, IL · Member since 2014 · 2k+ posts · 1k+ votes1y
Quote from @Austin Fowler:
Very interested in hearing people's investment strategies in real estate. What do you do? What are you passionate about? What kind of returns do you target when investing? How hands-on are you? How scalable is your investment approach? If you won or inherited or otherwise suddenly had $1M in cash, how would you use it to expand your portfolio? Or accelerate your wealth creation?
For our next million, we will be focusing on Residential Assisted Living, Storage Facilities & helping our kids build their portfolios. We'll also continue to look for opportunities in the commercial and residential space
What kind of returns do we target?- We treat real estate like we treat stocks- With some investments, we are conservative and more concerned with retaining principal and are betting on appreciation, while with others, we take more risks. We do have a hurdle rate that we change every 6 months, with the opportunities that involve more risks.
How hands-on? We do not pick up hammers or self-manage.
How scalable? Can't answer your scalability question
- 1yJoe S.Pro MemberInvestor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
Quote from @Crystal Smith:
Quote from @Austin Fowler:
Very interested in hearing people's investment strategies in real estate. What do you do? What are you passionate about? What kind of returns do you target when investing? How hands-on are you? How scalable is your investment approach? If you won or inherited or otherwise suddenly had $1M in cash, how would you use it to expand your portfolio? Or accelerate your wealth creation?
For our next million, we will be focusing on Residential Assisted Living, Storage Facilities & helping our kids build their portfolios. We'll also continue to look for opportunities in the commercial and residential space
What kind of returns do we target?- We treat real estate like we treat stocks- With some investments, we are conservative and more concerned with retaining principal and are betting on appreciation, while with others, we take more risks. We do have a hurdle rate that we change every 6 months, with the opportunities that involve more risks.
How hands-on? We do not pick up hammers or self-manage.
How scalable? Can't answer your scalability question
helping our kids build their portfolios
How would this look and how are you going about it?
- Real Estate Broker · Chicago, IL · Member since 2014 · 2k+ posts · 1k+ votes1y
Quote from @Joe S.:
Quote from @Crystal Smith:
Quote from @Austin Fowler:
Very interested in hearing people's investment strategies in real estate. What do you do? What are you passionate about? What kind of returns do you target when investing? How hands-on are you? How scalable is your investment approach? If you won or inherited or otherwise suddenly had $1M in cash, how would you use it to expand your portfolio? Or accelerate your wealth creation?
For our next million, we will be focusing on Residential Assisted Living, Storage Facilities & helping our kids build their portfolios. We'll also continue to look for opportunities in the commercial and residential space
What kind of returns do we target?- We treat real estate like we treat stocks- With some investments, we are conservative and more concerned with retaining principal and are betting on appreciation, while with others, we take more risks. We do have a hurdle rate that we change every 6 months, with the opportunities that involve more risks.
How hands-on? We do not pick up hammers or self-manage.
How scalable? Can't answer your scalability question
helping our kids build their portfolios
How would this look and how are you going about it?
We will partner with our kids through Joint Ventures; downpayment assistance,....
- 1yRonald RohdePro MemberAttorney · Dallas, TX · Member since 2016 · 5k+ posts · 2k+ votes
Quote from @Crystal Smith:
Quote from @Joe S.:
Quote from @Crystal Smith:
Quote from @Austin Fowler:
Very interested in hearing people's investment strategies in real estate. What do you do? What are you passionate about? What kind of returns do you target when investing? How hands-on are you? How scalable is your investment approach? If you won or inherited or otherwise suddenly had $1M in cash, how would you use it to expand your portfolio? Or accelerate your wealth creation?
For our next million, we will be focusing on Residential Assisted Living, Storage Facilities & helping our kids build their portfolios. We'll also continue to look for opportunities in the commercial and residential space
What kind of returns do we target?- We treat real estate like we treat stocks- With some investments, we are conservative and more concerned with retaining principal and are betting on appreciation, while with others, we take more risks. We do have a hurdle rate that we change every 6 months, with the opportunities that involve more risks.
How hands-on? We do not pick up hammers or self-manage.
How scalable? Can't answer your scalability question
helping our kids build their portfolios
How would this look and how are you going about it?
We will partner with our kids through Joint Ventures; downpayment assistance,....
How old are your kids? Mine are 4 and 7, probably not ready for JV
- Real Estate Broker · Chicago, IL · Member since 2014 · 2k+ posts · 1k+ votes1y
Quote from @Ronald Rohde:
Quote from @Crystal Smith:
Quote from @Joe S.:
Quote from @Crystal Smith:
Quote from @Austin Fowler:
Very interested in hearing people's investment strategies in real estate. What do you do? What are you passionate about? What kind of returns do you target when investing? How hands-on are you? How scalable is your investment approach? If you won or inherited or otherwise suddenly had $1M in cash, how would you use it to expand your portfolio? Or accelerate your wealth creation?
For our next million, we will be focusing on Residential Assisted Living, Storage Facilities & helping our kids build their portfolios. We'll also continue to look for opportunities in the commercial and residential space
What kind of returns do we target?- We treat real estate like we treat stocks- With some investments, we are conservative and more concerned with retaining principal and are betting on appreciation, while with others, we take more risks. We do have a hurdle rate that we change every 6 months, with the opportunities that involve more risks.
How hands-on? We do not pick up hammers or self-manage.
How scalable? Can't answer your scalability question
helping our kids build their portfolios
How would this look and how are you going about it?
We will partner with our kids through Joint Ventures; downpayment assistance,....
How old are your kids? Mine are 4 and 7, probably not ready for JV
They are adults.
- Member since 2024 · 2 posts · 0 votes1y
Could you please let me know which syndications you invest with? I'm aware of BAM Capital and Goodegg Investments.
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