All Forum Posts by: Albert Okagbue

I am trying to follow your logic here.

Let's say I own a real estate property that  earns me $10,000 a year.  Then Home Depot says if I spend another $200K on it, they will pay me 40K per year on top of the $10K I already earn.  Following your logic the $200K is only valuable during the construction period BEFORE I start collecting increased rents....  I don't see how that works. I would think that the $200K adds to my asset and $200K loan adds to my debts.  As long as I earn more than the cost of debt, i am ahead and can even pay it off faster.  I wouldnt see that as a burden.

Please enlighten me.

What exactly makes Student Loans different from the construction or rehab scenario I gave above?

Hey Maggie....you might look for events hosted by your local self directed IRA custodians. People with retirement accounts might finance you....just a thought.

Jesse, thanks thanks for answering.

I want to start by correcting the person who said student loan debt is bad debt.  This is toxic thinking in my view because an education is no less an income producing asset than a house.  You cant sell it which may be bad, but nobody can ever take it away or damage it either.  Good debt increases your ability to accumulate cash and does so at a rate higher than the cost of borrowing.  Your guy's student loans do just that...Also most student loans don't require credit which is a bonus.

Next, the other folks are right about how taxes work.  I think you have to decide what your real estate goals are and model the resources needed.  If you can do it without debt that can be good.  Most of us don't make $135K so the debt allows us to do more. Can you do more?  Do you want to do more?  Do you like your job?

Until you have a answers....I would keep paying them off as a default option just because it benefits you many ways....outside of tax.

Jesse - It sounds to me like you already have an aversion to debt.  I would turn around and ask you a question:  What prompted you to think about this?

It sounds like you earn well.  You already paid off your student loans. Why are you even considering not doing the same with investment properties?

I would appeciate more info from you so that I can give a thoughtful response. 

To my knowledge you can get financing for the unseasoned LLC....but you will need personal gguarantees or sure. Or both of you can get likes of credit and lend money to the LLC. Do you have a banker?

Whether you do thefirst deal in the LLC or not, you will need a good contract or agreement. One of the pieces that may need ton there if you dont have an entity is how the money will be reported for tax purposes.....

@Nixon Vayupak  This will vary greatly depending on a bunch of things.  Best to get you in touch with a CPA near you.  Do you need a referral?  I'm sure I'll find someone in my network.  

Congrats on the investor interest though! 

@Sipo Thao Send me a message.  Let's discuss a bit.  Let me see who I can connect you with. 

Congrats on your 4-plex deal!

Congrats!  How did it go?

What specifically do you need?  A person?  Let us know!

@James Staples  What's the next step?  What's your problem?  Sounds like you need an asset-based lender correct?  Something you might try....

My understanding is that in the real estate world there are people with money and no time; then people with time and no money.  I'm a CPA with real estate clients -- not necessarily active...but in this world nonetheless.

One person said that you might go to networking events held by a Self-Directed IRA Custodian. Is there any near you? You want to get in front of people with Self-Directed IRAs and money sitting in them, and ask them to finance your deals directly. Somebody may bite. At least learn what they want.

One thing I try to explain to my clients is that different types of lenders have different types of constraints and can take different types of risk.  Their requirements depend mostly on where they get their money - other banks, federal reserve, stock market, bond markets, private funds etc.  People who are using their own money and don't have to report to third parties are the best people to get money from.  You might try to meet those types; they may want a lot e.g. to see the house themselves, etc.

The key is to learn what each lender wants.  After you understand what different types of lenders want, you can target the ones that are a fit for you.  There is always a price to be paid (higher interest, points, etc) when the money is "easier" to get to....

Does this help at all?

Good tips from @Mindy Jensen.

Business card is a marketing tool.  Marketers say people have a short attention span and don't want to work.  They also tell us that people like things that are pretty and non-flimsy.  Use good quality paper -- don't be cheap.  I get a lot of compliments from my card - the designer is no longer in business or I'd refer her.  If the card is elegant, people will want to keep it.

One strategy is to put your name and what you do on the front in really attractive, large design, with contact info at bottom and more brochure-type details on the back.  Good luck.