All Forum Posts by: Alexandre Marques dos Santos

@Sterling Wyatt

Thats exactly the point. US printing money will create inflation. Whoever have debt will make money... IF the allocation is in Real assets that will gain with inflation. House might not follow exactly inflation, but tends to get at least big part of it. Rentals tends to increase as well...

About RE being Liability, i think he tries to explain the rat race, people buying big houses with current salary, ending up paying larger installments. The big house became a liability cause all expenses grows ( maintenance, taxes, etc). He never considere that your own house reduces rent payments on his example. But thats to make it clear, to increase rental, would make the explanation more sophisticated.

I didnt listen specifically, but i believe that his liability is related to each one house.

@Kandice Manciel

I think numbers can lie. You put 60,00 for maintenance and 60,00 capex in a 1916 house.

Anything happen, you get in trouble. Also vacancy seems low. One month vacancy will kill your numbers.

So basically you ends having to figure out:

1). Is everything perfect in the house? Lets suppose it is.. how much cost in the neighborhood just to paint the house? Even if you will paint yourself, it cost material!Realistically speaking you might have to do it every 10 years at least. Ao 1/10 is a mist in reserves ( plus other stuff).

2) will you rent the house yourself? Whats the rotation in the market yo u are looking. High rotation increases vacancy.

3) and finally will u use PM or broker? If so you need to acount it for.

Good luck

@Megha Sharma

I will give unbiased words. I understand your concerns and tight budget. Its all good. But invest in OOS just because you cant find an affordable for yourself, its a wrong start.

Investing OOS can be a great achievement. But as any other business its carries risk. Also, for your first property, you will face lots of mistakes due to learning process ( hope you can learn with NO mistake, buts not realistic).

Investing OOS is also more expensive than in close neighborhood. The interest rate in a mortgage ( if you can get one) will be higher, and You will probably need a PM to handle day to day problems. Yes, OOS can give you better returns, but they are not sure. Appreciation is a gamble, nobody can predicts clearly where prices will go and when. Specially after the move we had due to covid.

So my suggestion is try to house hack. Doing that you can get a FHA loan ( cheaper loan with not much downpayment) as you will live in the property, while you can rent another unit to help pay your mortgage.

Also you can manage yourself, which leaves some extra cash to you.

This will be a great learning experience, and can give you tools to imerse in RE business.

@Filip Reutov

I would let them build it and would ask them to sign a document saying:

1) tenant will get all permits from city at their expense

2) project and materials are to be approved by landlord and at tenants expense ( wanna something solid and useful in future)

3) tenant will leave the shed after leaving property

If they agree, why not?

@Raj Kaushal

I did several times. I have a great relationship with my realtor, and she went there, called me on facetime and tried to give her impressions. In the end i closed the deal and never had any issue.

If any issue arise, its my responsibility, but she knows she will lose credit and potentially a great client ( so far i bought 4 houses with her).

@David M.

You were precise. I only wanted to highlight the fact in 72 hrs, it can be refused with no explanation, even after having signed the contract. I never experienced a situation that takes much longer than 72 hrs.

@Thomas Tarry

Maybe even dont finish the purchase. Put in the contract the buyer has the right to transfer the contract to another person if wishes to. Make a higher EM so it will hurt seller to cancel contract after attorney review.

But you need to use a different agent to present the contract, or it will be obvious.

@Thomas Tarry

Its painful. But like NY, NJ ( would live to know if other States have similar law) also have this clause. This gives 72 hrs for ANY PART to cancel the contract without need to give any explanation. After that, contract takes place.

What is strange is the fact the seller still wants to sell the property, and a cash offer was made.

Do you know if LLC has all paperwork in good stand? If theres a derogatory mark on it?

If its clean, i would guess broker wants to find a buyer himself to collect more commission, as the seller counteroffer, meaning he is willing to sell even lower than asking price.

Did you mention Broker and attorney are relatives? Cause looks like they are working together on this...

If you cant prove broker is breaking the deal with no reason, without sellers support, i dont think you win this case.

@Jay Hinrichs

You are right, many guys in BP play a “gambling” game of appreciation.

This is the biggest argument of the “pro leverage at the sky” guys. In some discussions they come with 1 property x 10 properties, and put 5% appreciation per year like this is sooooo normal to have.

I am not discussing if thats possible. You will see some markets. But there are markets you will see it opposite. Economics usually dictates.

To me, appreciation is a cherry in the cake. If cash flow justifies, the appreciation will give the jackpot.

In my case, return ex ante of 4.5% does not justify the risk, plus inventory was under the water for some time... and the constant fight against costs, insurance, tax, plus the scenario of increase capex ( that potentially would depreciate even more the return) made me take a decision.

I am focusing on a development in Florida, and started to study new cities.

I open a small business in Brazil, focused on foreclosures. I will do the same in US.

If i can have a team in place, i am thinking if i should try a shot in being a lender.

@Jerome S.

Thanks to BP i learned an strategy that could be better for you, not sure if you use it.

As per my understanding, you use HELOC to amortize your mortgage, and cash flow to pay heloc.

What if instead of pay down mortgage, you ask for recasting. Recasting you keep the tenor and payments will drop. That would allow you to increase cash flow, paying HELOC FAST, hence repeating the process faster.