All Forum Posts by: Blake Pieroni

Hi! 

What would be your best advise for raising capital toward real estate projects in this market of extreme fear and rising interest rates?

I feel like the 99% of investors fears are valid, however, I don't really believe in a "do nothing or wait it out plan"

Hi @Guillermo Sanchez,
I really enjoy questions like these. 

The math says, don't pay off your mortgage at 5% and invest all your money because you will earn a higher return. However, if you did this, you should also pull out as much equity of your home as possible and take out as many loans at 5% interest as you're able to. Which people do. 

The other way of looking at this is, you're getting a guaranteed 5% rate of return by paying off your mortgage. In addition to that, you have to weigh how much having less risk, (paid off home) is worth to you. What if something tragic was to happen and you couldn't work for an extended period of time.

In my opinion, I would take your 300k of your 350k in cash and throw it at the mortgage. Then over the next few months save up and pay off the remaining 160k. (don't sell anything with tax implications) .The next part is important, live with a paid off home for 1 to 2 years and see if you prefer it over having a mortgage. If you prefer the mortgage, you can always move up in house and get another loan.

I'd really love to know which one you choose, I wish you all the best either way!

Blake

Hi @Lukas Streetman! Wow buying a 4 plex at 20 years old that amazing!

I'm from the region area too, I grew up in Valpo and went to Chesterton Highschool. 

I would say go slow, there is no need to rush. Next have you underwritten several deals and identified a specific property?

@Matthew Masoud

That's awesome you're moving up into bigger and bigger deals. I work for a large syndicator in Indianapolis. The # of units aren't really as important as the size of the deal in general, obviously there are economies of scale but just estimating, if its a deal and is over 2M I would think it would be worth the legal fees. I'd say try and start  20+ units and 2M in size. Figure everything out and crank up from there 

 @Arta Montero

I think when talking about out of state investments do you mean being an active or passive investor? When I say active I mean finding the deal, getting the capital together, winning a deal, doing your DD and then managing it yourself? This can be done and is done all the time but I don't think this is something that is very scalable, or the most efficient use of time, especially the management part.

Passive on the other hand is a cake walk for the investor 

Blake