All Forum Posts by: Cole Bennett

Thanks, Frank. Definitely something to think about. We feel like we're getting started late in this but we're wanting to accelerate so that we can have some better retirement funds. That certainly comes with some risk. Trying to educate ourselves as much as possible before taking the leap, and we may still decide to go a less risky route. Thanks for your help!

Cole

Hey Jonathan thanks for your advice! We certainly aren't counting on the stocks to continue at 24% and we recognize that we can't take money out of them without a hit on the taxes. From what we've learned, syndications are in essence RE but yes, without the active component that we've been used to with our 6 units (just dealt with the classic toilet leak yesterday!). But since syndications qualify as an RE investment in regards to taxes, you can take the advantages of bonus and deferred depreciation. And the numbers on returns range wildly from deal to deal, of course, but it seems safe to assume an annual return of 7%, with an overall equity multiple of 1.6 at the end of 6 years. I recently saw a track record from a company who (of the ~23 deals they had closed since beginning) averaged a 1.6 EM and a 19 month hold period. I haven't verified those numbers personally, but I know other people who trust this company (I'm new to BP so I'm trying not to be too specific and get banned for advertising). A 1.6 EM, even if factored every 2 years (and taking 25% out for taxes at every sale) turns a one-time investment of $200k into $8M over 20 years, and that is still blowing my mind.

Other than all that, yes diversification is good, and we probably need more of it! Including startup seed investments, which we've looked into a little bit recently. And yes on the HELOC potential as well - I just wrote about considering that in my previous comment above.

Thanks again for the great input! I'm getting lots of stuff to think about from these posts!

Cole

That's great advice, Eric, thanks so much. Really helps hearing it from someone in such a similar situation. With our 2 properties in KY, we are on the cusp of doing a refi/cash-out where we will end up owning the smaller one (about $200k) outright, so one thing we're considering is taking that out in a HELOC to have ready if we need to invest quickly. Or we may put it into a syndication or fund - given that the interest rate makes sense to do so of course. I was gonna say that right now our barbell is pretty much all stocks, but now that I really think about it, it's probably 75% stocks and 25% RE - which isn't as bad as I thought. Definitely time to boost the RE side, though. Thanks again!

Alexander, yep you are right on target. I know the market has been very unusual and we definitely don't take for granted that it will continue. Our advisor has done very well for us regardless, but it's time for us to take a deep dive into the finances and compare some real numbers between stocks and RE.

We currently rent in NYC and that exact question is the crux of my other question in the forums, https://www.biggerpockets.com/... I've looked into house hacking here and will continue to do so, but we have owned 3 homes before now (in KY and SC), so I don't guess and FHA is an option. The other side of that question is the duration of our stay here - yes we could keep the place if we move, and have someone manage it for us, but the real issue is whether we'd just be better off investing that money elsewhere, even considering the crazy amount we're currently paying in rent.

Thanks for all the great information. We will continue digging.

Cole

Jason Lee thanks for all the data! Yep we're pretty much in that limbo. With the added (tiny) possibility that we could end up going out to LA for an extended commitment, possibly ending up there for a good while. I just hate the idea of paying rent, especially NY rent! :) I'm over here calculating interest rates on $200k loans, meanwhile giving away $60k+ to my landlord every year... But I really appreciate the hard data you provided, coming from an obviously good grasp of the market - it helps me feel more concrete about the decision.

Cole

Hey I'm pretty new to the BP forums and the BP podcast. My wife and I are learning a lot about REI lately, mostly syndications, although we do own a couple of rentals (4-plex and duplex) that we've had for some time and that do fine for us. Right now we're teetering on the edge of becoming seriously invested in some new deal, likely a syndication, but we are getting started late (in our late 40's) and are feeling the need to go big - like by taking money from our stock portfolio (currently about $1.5M). It feels crazy to remove money that is currently doing about 24% and put it into real estate, and I know there are a thousand variables that could affect this specific decision, so I'm asking if anyone has any general input, or if they've been in the same situation.

Thanks In Advance,

Cole

Others have given great advice already. You might get more clarity if you work with a "debt snowball calculator". They are great at illustrating where your money goes and what affect it has when you allocate some extra payments to this or that debt. All other factors being equal, it's best to pay off the highest interest rate first. But many of these comments show how those factors are rarely equal. This is a good calculator that you can download and do anything with, so you're not limited to inputing via a webpage. https://www.vertex42.com/Calcu...

I'm looking to do the same thing and was advised to go ahead and have the HELOC out and ready so that if a good deal comes up you have the credit to make a move quickly. Obviously you want to consider the fact that you'll be paying interest on your down payment, and factor that into the deal.