All Forum Posts by: Charles Worth

@Philip Hy

Not sure where you are buying but unless there is appreciation or built in equity on the buy (i.e. you bought it at 75% of equity value) it sounds like a low return for the many risks (tenants, liqudity etc,).  If there is that is really your return and the cash flow is more a kicker. As you noted the appreciation saves you but that assumes the area is one where that would be a probable scenario. 

In reference to the 100+ unit comment I would say its actually much harder with more units because you have more investments that need to be made and/or need to play in the midsize multi space where there is a lot of competition. As a small operator your advantage is you need to make fewer investments so you have wait longer and try and ensure a better deal on entry. 

Have you considered that maybe you are too quick to buy? Maybe a better acquisition strategy (mailings, calling etc.) would yield higher returns?  

@Mohamad Suleiman

If I understood you correctly you want someone to provide leverage for your Super Awsome LLC to lend you money to buy the houses, am I right? Otherwise as noted unless there is a tax reason for doing this I don't see the point.

As for lending the LLC money, I don't think banks or other capital sources are going to bite when you own the property itself and the LLC. In that case why not just lend to you as the property owner, its much cleaner? I think you are assuming the bank is not going to look very hard at the transactions themselves but I think unless you have an amazing track record they prob would.

@Eric P.

Sadly most agents are used to working with homeowners and as such don't make very good investor agents. I think if the agent is a good investor agent is probably used to it and more important has other clients who can buy the property if you don't so its not a total waste of time. 

@Darren Sager

Why so early this time?

@George Dai

I would be very careful about lumping homeunion or roofstocks in with crowdfunding deals. They are really just platforms that sell properties and at least for the former help you manage it. However, you own the property unlike in Crowdfunding where you own a part of an investment and its meant to be almost entirely passive.  Actual property ownership is typically not nearly as passive and I feel has advantages buying from those folks doesn;t have. I would also be careful of fees with them.  There are also different things to evaluate in each type of investment. 

Personally, I also feel the accredited offerings have huge advantages over the non-accredited stuff out there as acreds are many times (but not always) more sosphicated. 

@Chris Isaacson

I am no agent but if say you wanted to buy another property and wanted to know that you had your house locked up wouldn't that be worth the 5%, aren't there a lot of use cases where the same holds true? I don't think anyone thinks they will take Uber type share quickly but 5% seems like a decent deal for peace of mind and to not have to do too much in terms of repairs etc. just to enhance curb appeal if the seller even knows what to do. 

Regarding Uber, they were definitely less expensive in some markets but for a long time in major markets they certainly were not cheaper, they simply made it more convenient and added a level of consistently to a service very much operated by shady operators in many cases (least here in NYC).  

@James Peterson

Opendoor is being looked at as a major disruptor similar to how many companies that were changing the way things are done in X market were valued (think Uber, AirBnb, Dropbox, etc. for ones that made it). Its likely some % of the overall market which is a huge market. The team and initial investors are also a huge factor and this company is ridiculously impressive on both fronts. Keith Rabois from Khosla Ventures, PayPal, Square and Slide is Executive Chairman, Eric Wu the CEO was founder of Movity that was bought by Trulia and the team is huge with great creds. The investors from the Series A round to the recent Series D are all a whos who of the tech scene include the founders of Box, Path, Redditt, PayPal and many others as well as major VCs like Khosla, Y Cominator, SV Angel and others. This round was included Wells Fargo and NEA. In short, most of the investors are guys who have made a ton of great bets and investors assume their participation means something.

As to the actual opportunity itself they are certainly overvalued for the time being based on what is there today but I would assume one thought investors have is that they will build up a list of ready buyers and cheap capital. Doing so would give them a huge advantage and if they wanted to could give them really good market share. Course the flip side of that is houses are not homogeneous assets and stats can only help so much in this market. As anyone local will tell you in most markets the stats can be very misleading to outside investors. Even the hedge funds as far as I know were never really able to crack this code without a lot of work and boots on the ground so it will be interesting to see how they evolve.

@Jay Hinrichs  one thing i am curious about from someone who has been around a long time and knows the realtor business, how different is this than guaranteed prices from realtors whcih as far as I know have been around for a long time? 

I tagged @Darren Sager , simply message him and he will add you to his list when he sends out e-mails. Next one is in Jan I think. I attend most and they are very well done. 

An interesting article in the NY Times today about a possible bankruptcy by Dallas. It looks like despite great growth the pension promises are just too much to handle. 

http://www.nytimes.com/2016/11/22/business/dealboo...

http://www.fox4news.com/news/215275456-story

@Gen Young

This question can only be answered by knowing a lot more about you. How much time do you have? How savvy do you feel you are in various areas (i.e. what are you good at, what do you not want to do), are you accredited?  These are just some of the various questions you need to answer before a really good answer can be presented. 

Sadly, there is probably no market I know of right now that is just hands down an amazing investment that someone should just go into no matter what.