All Forum Posts by: Will Barnard

First off Scottish, paying a mentor a large upfront fee and then on top of that, splitting the proceeds on a deal 50%/50% is not only excessive, but you would be a fool to sign (no disrespect intended).
If, and I mean if, you pay top dollar for a mentoring program, you should be able to locate & complete a deal on your own. If the mentor wants 50%, he/she should be bringing something else to the table, i.e. the financing, the cash down, or both.
On top of all that, if you feel the need to pay tens of thousands of dollars for a mentor program, you better be getting truley advanced investing startegies/techniques (commercial properties) or else you are tossing $$$ out the window.
As far as what Ned has stated, I agree that a good mentor who can reduce/eliminate the fear factor and bring the newbie to take action, deserves financial consideration for the effort. I also agree that a person who has paid upfront for mentoring would be more inclined to follow through as they have some "skin in the game" however, that fact does not ever consitute the mentor receiving 50% share/no skin in the game/large upfront fee.

As far as mentioning the guru, there is no harm in doing so as anyone here with personal knowledge or experience with that person can give you some insight regardless off the fact that the guru is not present to defend themself. This is not a court of law, but a forum in which experiences can be shared with others. Hiding who the guru is does not benefit anyone here, including yourself.

To touch on the bank CD's or MMA conversation, I believe both investments are foolish, no matter what your age. I do not mean any disrespect by this statement, only to point out that both vehicles are losing efforts. Tak into consideration a 4% return, less taxes = approx. 3% return. Then factor in inflation which is currently over 5%, and you are LOSING money each month.

"Safe" is a word used often, is a very broad term, and depends on each individuals account on the subject. Many have pointed out the benefits of owning property free and clear of a mortgage. Here are the downsides (which in my opinion, out weigh the upsides): 1. Equity in home = return of 0%, 2. Equity exposes you to frivoluous lawsuites, 3. (most importantly) loss of use of leverage - now I am not suggesting over-leverage which has been the cause of many downfalls, but applying it appropriately.
Neil pointed out a great analogy on the subject of risk. It is not the risk that is important, but how you manage it.

$100k @ 4% in a CD = $4000 (less taxes)
$100k down on a $500k RE investment returns cash flow & tax deductions to live off. Of course appreciation may be added as well, but only liquified via sell or refi cash out (which is also tax free by the way). Option 2 makes much better sense to me!

Again your question is quite broad, but even more so, so is the answer(s).
First, you need a commercial loan as any property with 5 or more units is considered commercial. Second, you would most likely need 20% down + closing costs and rehab/repair costs. This is just the standard, and not the only option. There are banks that will loan and specific criteria. You may also use seller financing which could be an owner carried second note or the entire note (which would avoid the banks). You can get quite creative depending on your skill/knowledge/negotiating levels. In other words, there are many ways "to skin this cat"

Originally posted by Lynn Payne:

We do cash purchases and assign the contracts all the time. If there is any finder's fee to be paid, it can be done on the side. If your a realtor you can get the entire commission. At least that's what's worked for me.

What Lynn has described here (getting paid on the side) is mortgage fraud. I recently had the Deputy District Attorney on my live radio show explaiing just that and they as well as the FBI are "cracking down" hard on violators of mortgage fraud.

Secondly, banks will not allow an assignment of contract on a short sale. End of story. Yes, you can buy cash in an entity, then sell the entity, and of course, you will owe taxes on the profit (speak to your accountant).

I hope this clarifies your original question on this matter as you received some good advice and some incorrect/bad advice. I also highly reccommend having a RE attorney on your team. They can guide you through the waters on this and many other subjects of re investing.

Tough to get positive cash flow (without putting down a bundle) in many areas, however, the midwest does offer some areas where you can positively cash flow duplex/quadplex units. My favorite is Texas and Fort Worth in particular.

Happy hunting!

Rod asked a question, then received some answers in which he proceeded to state that the answer was wrong, then posted the answer to his own question.
Our question to you Rod is why do you ask a question, then answer it yourself? If you already know the answer, there is no point in asking the question.
As far as your grammer and spelling, I made the suggestion to help you out, not ridicule you and the suggestion remains. It gives an appearence of an uneducated and unprofessional person and that is not what I would want to portray to others, do you?

First, may I suggest spell check before posting, your posts are difficult to read with all the errors.
Second, there are so many different ways to invest in RE, you should first pick an area you feel comfortable specializing in, then ask the question specifically to that arena.

Some people will not even qualify for the depreciation deduction, including anyone who earns over $150k annually. Also note that not everyone will qualify for the SRAP program and the amount you must decrease your rent (rent control) equals the amount you receive upfront, so the only benefit is having the cash upfront if you can invest it wisely.
Also note that several other hurricanes have hit and threatened the same areas. That said, why would you want the risk of investing in an area prone to hurricane devistation. The entire time you are waiting for your insurance to pay, you are coming out of pocket for the mortgage and other expenses without any tennats paying you rent.
50% upfront depreciation does not sway me to invest there, and as another has mentioned, you will have some depreciation recapture. I highly reccommend you speak with an experienced RE CPA or Tax attorney.

Bruce,
Wholesaling is one of the easiest forms of RE investing and without having to put any "skin" into the game. The only difficult part is locating and structuring a very good deal, and having buyers/investors waiting to buy from you. I suggest you first find buyers and the criteria they are looking for, then go out and structure some deals accordingly.

What area of investing are you looking at doing? What do have to offer in return? Will this be a part time endeavor or full time for you?