All Forum Posts by: Brian Burke

Derek Johnson, as far as I know in the states where I've formed LLCs (CA, TX, and DE), a physical address must be used. You might get away with using a mailbox service address (like UPS Store, etc), but I haven't tried it.

Callum K., as an investment sponsor in this operating space I obviously have some opinions, I'll try to frame an answer with as little bias as possible. :)

Pros:
Most investors in this space are HNW or family office, and simply don't have the time or inclination to make direct investments in real estate. REITS and PE funds allow a path of least resistance to get the desired RE exposure. In today's high volatility environment, most investors I talk to are seeking ways to insulate themselves from volatility using alternative investment vehicles and RE funds are a good venue for that.

Cons:
Typical REIT strategy is investing in class-A assets in core markets, where assets trade in the 4-5% cap rate range. I think that goes against the thesis of limiting volatility exposure because record low interest rates are certain to rise at some point, and with such a small interest/cap rate spread already, cap rates will get pushed up which pushes prices down. PE funds sometimes have a better strategy, especially if they are small enough to be entrepreneurial and work hard to seek value on the buy and generate higher cash on cash and overall IRR than the REIT strategy. Higher cap rates give a slight edge over the low cap stuff in the case of rising interest rates. However, these smaller PE funds carry high sponsor risk. In other words, you really have to know who you are dealing with and do extensive due diligence on the operator, because a great deal with a bad sponsor is doomed from the start. The success or failure of this type of investment is largely determined by WHO you are doing business with.

In summary, I like the strategy but you have to do homework on the deal AND the sponsor, talk to references, obtain and verify track record information, and be prepared to NOT invest if things just aren't adding up.

Good luck!

Welcome to BP, neighbor! Good to have another member from the wine country.

I would have lost count a long time ago, but for some reason I started keeping a log when I first started, and I just never stopped. I'm so glad I did, too, because new capital partners are very interested in track record. The ability to demonstrate it is invaluable.

@Wayne Brooks, is there a mechanism by which a purchaser can identify the total HOA balance prior to buying at auction? In CA we are fortunate that dues are junior, and senior property tax delinquencies are easy to definitively quantify. If HOA were to be senior, I have no idea how I'd feel safe bidding.

Surely FL has some method to find out, other than just "hoping" that the HOA recently recorded a lien? For that matter, even knowing which properties have an HOA at all is elusive, no?

Mike, I've fixed stuff like this for a few hundred bucks, but it could run in the tens of thousands. There are just so many variables, I suggest you just put in an offer with the assumption of spending a few thousand, but with a 21-day inspection contingency period. During that time, obtain repair estimates from at least two licensed contractors that specialize in foundation repairs. It might also require a geotechnical report. If the cost to remedy exceeds the number that you assumed when you made your offer, show the seller the higher quote and renegotiate. If they won't renegotiate, cancel and move on.

Without going to my computer to pull up the exact number...somewhere between 525 and 575. When do I give up on a flip and just rent it out? NEVER. If I screw up (and we all do, occasionally), I just get rid of the mistake and move on. Why suffer the consequences of my mistake year after year?

When I was newer in this business I converted a couple of flips to rentals and have lived to regret it to this day (because I still have them!). Now, when I expand my rental inventory (which I am), it is intentional from the outset. That said, your mileage may vary. What works or doesn't work for me may differ for you.

Yes, what you said is true, David.

Guys, this manifesto on real estate investing is awesome, and I'm not just saying that because my first BP Blog article got a mention in the apartments section (shameless plug). Seriously though, from a somewhat seasoned investor who has been there and done that, the contents of the UBG should be required reading before any new investor wanders aimlessly into the shark tank. I wish I had it 20 years ago. Well done.

You have to hold a real estate salespersons or brokers license to be a member of an MLS and have access (or an unlicensed assistant to a licensee), but you do not have to be a Realtor, which signifies a member of the National Association of Realtors, a professional organization. At least, that is the case in several MLSs that I belong to in CA. I suppose there could be MLSs out there that do require Realtor membership in order to have access. Is that the case in your area, Sandy?