All Forum Posts by: Chris Soignier

Everything is negotiable, but what you're proposing would be VERY unattractive to most passive investors, esp. given that by your questions I'm going to assume you have no track record in MF.   But, there's plenty of suckers out there, and I've seen bad deals get funded by less demanding investors than me.

Let's say I was willing to invest w/ you.    I'd demand 100% of the equity (assuming you're not investing any of your own capital), but pay your a small override % of the distributions and remaining cash after paying off the debt and my initial equity.   You could also earn up to 5% of rent as an asset management and property management (if you performed these roles) fee.  

Ever hear of a due on sale clause?    They're not widely enforced, but they are legally binding.    Sure, anybody can make payments, but that doesn't mean they have to accept (or keep accepting) them.

That cap rate, and the unrealistically low expenses, are a red flag.     Not saying it isn't a good deal, but I'd be very thorough in your due dligence and not take any number provided by the seller or broker at face value.

Leverage is the secret sauce that makes real estate so attractive.   W/o it, the returns aren't that great.    If you want the least amount of stress and risk, that's fine, but financially you'd be much better off over the long term by using your cash flow to buy more leveraged properties instead.

 Cash reserves are reflected in the balance sheet (and statement of cash flows, but that's another discussion), NOT the P & L.   Think of the balance sheet as a snapshot at a point in time reflecting an entity's assets, liabilities, and equity, whereas a P&L reflects the activity, or flow, of revenues, expenses, and profits over time.  You should rarely if ever see a balance sheet line item in a P&L.  

You want to get rid of aliens as part of the clothes?     ;)

Did you buy title insurance?   If so, your title insurer should take care of everything for you, if not you're likely SOL.

A large part of #2 is probably due to consumers' experience w/ #1.

I'd rather spend more money hiring GC's &/or contractors who will get in and out ASAP.     A cosmetic turn shouldn't take more than a week.    Think of all the lost potential rent vs. whatever you saved.    Stretching out payments to contractors is likely counter-productive, b/c then they'll want to stretch out the work.

Yes, I am. The Texas Real Estate Commission (TREC) is composed of licensed real estate professionals and attorneys, who MAY or MAY NOT be members of NAR, but are not representing NAR in that capacity. Believe it or not, TREC is actually in place to protect consumers, and we have plenty of legislation to protect them.

Back to your earlier point that real estate brokerage isn't competitive, that's not my experience.   Agents are everywhere, there's low barriers to entry, and no shortage of discount brokerages.   Ever hear of Listing Spark?    If you want to pay less than 6%, you certainly can find someone to take the job, but don't forget that you often get what you pay for.

 A title company can complete a transaction in days.   It's usually the mortgage lender that takes so long to complete a transaction, and TRID regs introduced last October only extended the time required.