All Forum Posts by: Charles Granja

 Don't do it. Hundreds of people would tell you otherwise

 You could view the accretive value of a low-interest rate mortgage as the delta between the current rate and par. In considering whether you should keep the property, you should also consider the fact that most of a real estate cashflow distribution is from appreciation (40-60%). After, you should compare appreciation upside in a typical market to the value of the cashflow excess generated from the low-interest rate, and you have an obvious answer (low interest rates don't matter much, as 15-20% of real estate cashflow distributions are attributed to cashflow)

 I cannot believe that people are trying to convince you that sub-to is a good thing. This is why biggerpockets is going downhill. Too many people on here stating nonsense and potentially trying to scam you out of your house. Please do not listen to them.

If your overwhelmed then take a break from this or slow down. Many will say "take action now", as if 1. It's a good time to take action (its not), 2. taking action leads to tangible results when you lack education in the topic of discussion (not true).

You already own 1 house, which is a good thing. I would say, if you don't have 100k invested in an index fund, you should consider doing that or placing the money in bonds. If you did buy today, 60/40 ltv, you'd have something similar to a bond anyways, but a bond is risk-free. Real estate doesn't have alot of upside potential currently, as real estate is 2x more costly than it was 5 years ago in most places. If you have 600k real estate exposure already and are 300-500k net worth, you should build up 50-100k of liquidity somewhere else like stocks/bonds, then consider coming back to real estate.

To be clear, right now is a terrible time to invest, anyone saying anything else is a salesman or someone who has experience that you don't have. Meaning, they have an intricate system where they cold call 100 people a day with callers and low-ball or something else that is more nuanced than what you are capable of doing right now.... As a starter, you are probably looking to do (turnkey, light value-add).

If you want to talk, reach out, I can tell you what you want to know, but I will recommend you invest elsewhere based on what you've provided

Well to start, you shouldn't invest in real estate right now if you don't know what you are doing. It's too risk for the cashflows you could possibly generate. I'd say if you can purchase assumable debt, you could consider that. The cost of debt is considerably higher than non-levered yields (means you don't make money). You should put your money into an index fund, put money in bonds while you learn about how to invest in opportunities. Lastly, do not listen to anything anyone says here about investing in real estate, because more than half the people are salesman.

This is very interesting.

What do you charge above the 10-year? Or perhaps, what is the % rate that you typically lend at for most of your clients? Or if you want to be more general, what spread do you typically lend at above the 5 or 10-year?

I do wonder if you have bad leads, what % of people you talk to that say they want 100% for both, and how widespread this issue is

I wouldn't right now. The cost of debt is too high. It's difficult to make money when the cost of debt > non-levered rate of return. Every dollar of debt that you take is not accretive. Value-creation is where you are more likely to make money. If you want stable cashflows, you are better off buying a bond, not turnkey. Risk-adjusted, it will probably provide a better return, when you consider the downside risk of real estate today(systematic component), and possibility of permanent capital loss (idiosyncratic component)

Wow, it seems every day there is a new issue. I wonder what will happen next. 

I mean, you might be better off taking the case on yourself.

You can break a management agreement whenever you want, but there are fees associated with that. I would imagine the best actions would be to immediately fire the management company, pass the keys onto a new one, sue the old one in small claims court for the listed damages. This is assuming that you can prove that the issue was their fault, and not yours.

The problem is that the cost of litigation is very high, likely not worth it. It is also risky when you consider that if you lose, you do not get reimbursed for legal fees.

If you feel that you will win rather quickly, why not represent yourself? The process is rather straightforward. It is just a headache to learn.

Would love to hear what others will say. When I sued someone for breach of contract it costed probably around $1500, but I filed, did majority of the work, and had my attorney there for negotiations. Another time I sued someone for breach of contract and it costed around 12-15k, this was a complex and much longer case.

I wouldn't recommend investing in real estate with that amount of money unless you are buying a primary/house-hacking with a VA/Fha loan. You could place it in a REIT.