All Forum Posts by: Steve Vaughan

Nice post @Lumi Ispas .  I follow your logic about gaining the spread on an investment, but this poor guy has financed a car that goes down in value at 18%!  Sounds like he may have made the best decision ever and wil sell it!  Way to go @Jack Arnold !

I agree with @Michael Roy about COC - 20% with leverage is my norm. My cap rates of are 12-16% on 100-year old apt bldgs, closer to 10% on property built in the 60's. 8% would be my min for new construction. For less than 8% I can invest without having a tenant or toilet to take care of. Insurance example is $2800 annual premium on replacement value of $720k from a class A commercial insurer. My big number to dig into a multi for further analysis is gross rents equaling about 1% per month. My numbers may be old-school and not really feasible anymore. These are what I have purchased in the past. I don't actively look for new deals that much anymore. I'm actually reducing a bit in this market. Hope this helps!

Hey @Adam Anderson !  Good job networking and coming up with a deal to review.  When a home is 18 months behind on payments, a lease option would not be the first tool I pulled out of my bag. Sure the wholesaler will take the fee, the lienholder will take $3k and (wait a minute!  Where'd everyone go??)  you'll be stuck with a house in foreclosure and big bucks required to bring current.  All of this after you've fixed it up.  Maybe a short sale or cash for deed.  18 months is quite a bit of arrears.  See if the bank can add it to the back end so you can resume payments maybe.  Anyone else?  

I don't bother with an LLC for single-family homes. Refinancing and insuring the house can be extremely difficult. Check with your insurance provider and watch 'em flinch!

This is a great way to get into REI, save money and have options for yourselves and your future! I kind of wish my wife and I did that early on. We never bought anything together until we were married, though. Can't tell ya how many times I have seen break-ups involving real property go horribly bad. Be aware and tread carefully @Joseph Shevy !

No way this going to be uneventful @James Wise ! Yes, yes, share the juicy details!!

I didn't like the SDIRA restrictions, either @Loren Whitney .  Honestly, I divested all of my 5-year contribution monies from my ROTH and divested into RE when I realized the stock market rises and falls for reasons completely out of my control.  No regrets.

I think there are degrees that specialize in RE. I have a finance degree, but I only use what I learned from a couple classes regularly (getting to NPV from a future income stream). What do you love to do? Getting a science or engineering degree, for instance, just to make money isn't enough reason for me. The beauty of REI is anyone can do it. I do it because I love helping sellers and tenants. Be good at what you love and success will follow!

I wouldn't take an early withdrawal to fund a real estate purchase. Taxes and penalties are too high. You can withdraw 5-year Roth money penalty and tax free, but you are losing out on tax-free gains. Maybe do a SDIRA, self-directed IRA? I would forget the LLC part with that, but that could be an option. Maybe do some research on those. You would hold title as "So and So Trustee FBO @Brent Mattison "  There are specific rules about comingling funds and performing services on your own property, but worth looking into.

At first glance, the price looks a bit high.  Here I need to get in at 100x monthly rent.  Our taxes are low, but owners here pay w/s/g.  Unless the terms are particularly sweet, I would need gross rents to be closer to $2500.  Rents of $1800 would put my target purchase price closer to $180k.  Please keep us updated as to how the meeting went, @Scott Warhol !