All Forum Posts by: Brent Shields

I agree with Taylor, when I want to work and spend my time doing something everyday then I flip houses.
When I want something passive then I invest in syndicated apartment deals.
In my opinion those are the two best options.

Brent Shields

If it were me I would just borrow money from them and secure it with the property. It's a lot easier and a lot cheaper. 

From what I have learned about the syndications that I have invested in.

I don't think you are going to find the same deals with online platforms as you will with individual syndicators.

To make it simple lets just look at one thing, mailing out the K1 statements at the end of the year.

If a syndicator gets 400 investors to invest $50k each that will cost them about $10k to mail out their statements using FedEx.

An online platform will have 4000 investors investing $5k each so their K1 mailing will cost about $100k.

Everything else will work at about the same ratio.

The other problems is that syndicators frequently charge just enough fees to keep the lights on during the project, and make the majority of their money on the sale of the property. With a structure like that it's highly unlikely the operator will want to continue to do all the work and give the investors all the money for an extended period of time.

But if you find one let me know, I might be interested in investing in it.

Originally posted by @Reginald Hinton:

@Brent Shields what’s a option

 Sometimes called a "Real Estate Option Contract",

Also called a "Real Estate Purchase Option Agreement "
it is a contract that allows the buyer the exclusive right to purchase the property. Once a buyer has an option to buy a property, the seller cannot sell the property to anyone else.

The only thing I can think of is if you want to offer make the buyer a loan for part of the money to buy the house,

then you wouldn't have to pay taxes on any money you carried back in the loan.

You said you needed some of the money, so if you wanted to spend $30k and the sales price is $700k

you would loan them $100k then they would get a bank loan for $570k and you would not have to pay any taxes on the $100k until they paid it to you.

Probably not the answer you were hoping for, but it's the only way I can think you can avoid paying taxes on the sale of your house.

Unfortunately the reason you are hearing lots of different answers is that each lender has their own requirements, and they are all different.
I have even had a bank go over their requirements in fine detail only to find out a week later that they now have new requirements that they didn't have last week.

I would pick out a few lenders and talk to them, explain your situation and find out what their current requirements are.

Be sure you explain that you are buying a property and immediately want to do a cash out,
that's a big no no for a lot of lenders. I have done this before, it's not easy but it is possible.

They will find out at some point in the process anyway that your doing a cash out, so you might as well tell them right up front,
and not waste a lot of your time finding out after you have been working on the loan for a month that they don't do those types of loans.

@Lydia Kawazoe I am glad you found my comments useful.

Thinking about it I would also add that I would spend more time looking for a buyer than I would looking for the property. Because with a really tight budget like that you want to sell the property very quickly.

So I would try to have a buyer lined up before I bought something.

I would also look at mobile homes, they usually sell for less than homes and the odds of finding a deal on a small budget would be greater. 

If I only had $500 the fastest way I know to get started in real estate would be to contact people who had money and start using their money to do deals.

If I was going to do it without using other people's money, then I would look at buying houses from people who wanted me to take over their loan payments. Basically a no money down deal. The majority of the deals I have purchased for $500 or less where those types of deals.

My third method would be doing wholesale deals,
or paying $500 for an option on a deal and then selling the option.

The last time I used a property manager they had the same type of $250 dollar deal where they didn't have to notify me if the expense was less than that amount, and every month they had not just one but several items that were taken care of and they always cost $249 each.

The sales pitch is that your a busy professional and you don't want to be bothered with phone calls that the property manager should be handling. 

I had them change the amount to $150 to notify me and the repairs/service calls started coming in at $149 and there were more of them each month than before.

I have had that same type of deal with many different property managers, so I don't think it is that uncommon.

That's one of the main reasons I sold all my single family houses and invested my money in other types of real estate that does not require property managers.

Also, my experience has been that once you sign a contract giving them authority to make decisions for you, good luck getting any of that money back. 

I know a few people who have an extra $2 million sitting in the bank that they are not using, if you wanted to contact me with more details about your deal, I could check to see if any of them would be interested in a self storage property.