All Forum Posts by: Daniel McNulty

@Eduardo Calle

I saw a lot of 75% LTV as maximums across asset types pre Covid.

Post Covid I still see a lot of the same, but I would like to see 70 or below for MF and closer to 60 for commercial given the giant uncertainty ahead.

Ultimately I would say the market you are evaluating is much more impactful than a few % in LTV these days.

@Soren Ager

The down side risks, among many, include lack of control, lack of transparency, and reliance on the syndicator’s ability to adequately structure, operate, renovate, lease up, reposition and then exit. All of which are no small feat often requiring years of experience for each skill set or more frequently a team that knows how to work together.

Lots of bottom of the barrel operators out there, but there are certainly good ones if you know what to look for.

@Mike Franco

It would depend on the asset type you are looking for. Core properties would probably be less than 8-12%, value add should be 12-18%, opportunistic is 18%+. The classification is normally based on property type, condition and vacancy rate to name a few. This even excludes the tax benefits you can expect from them, just like direct ownership.

300 k compounded at 12% for 30 years would put you just under 9 M.

That being said, its tough to compare to the control provided in Brrrr you described. However, it might take you 10 years to find 10 properties that work out as well as the scenario you described above.

Its just a matter of preference. As they say, there are multiple ways to skin a cat.

@Andrey Y.

I generally agree, it’s tough to beat the truly passive income of syndications. That being said, those numbers are outrageous and I would generally classify them as outliers.

In fact, when I see projections like that I normally run the opposite direction, but yours appear to be actual results! No?

Congrats on your wonderful start in the syndications world.

@Joshua T Poulin

You are correct in regards to effort involved. Flipping / brrrr are more time intensive than renting. Short term renting like Airbnb is more time intensive than Long term rentals.

If you hire a good PM though it certainly takes some of the effort out of it.

Syndications are arguably the most passive way to real estate. Find a strong operator you trust and collect income as a part owner.

If your goal is to be passive it traditionally requires more capital to hit than income number as compared to flipping. Somewhere north of 700K to hit that net 5k a month.

Hope that helps.

@Jose Francisco

The average investor doesn’t need much to get started. Avoid high fee mutual funds and stick to passive index ETFs.

I enjoy Marketwatch and Bloomberg for specific info, but day trading the market on specific securities without a firm grip on what you are buying is as foolish as blindly buying real estate.

Most people are lucky to break even, so passive index funds tend to be your best bet unless you are a pro or hire a pro.

@Monica Crisostomo

This certainly seems like overkill. At most we normally see a LLC at each property and a trust or holding company over top of all of them.

As others have mentioned, maybe a large insurance policy could fit the bill with less effort and expense.

@Brandon Koser

My understandings is that exemption is for primary res only.

@Mike Franco

That is an incredible gift for your children.

You might consider syndications instead as they will be much less hands on work for you.

Over that same time period (30 years) you can conservatively expect to reach that 7.5 M target many other ways with potentially much less sweat equity.

@Elisa Rafol

It would depend on how involved you wanted to be and how much risk you wanted to accept.

More Sfrs could certainly get the job done but would require some management effort.

Syndications are my personal preference but there is a pretty high bar to identify, do due diligence and build a portfolio.

There are many other asset classes available to generate income, dividend paying equities, private credit, etc that all may prove useful.

Use them all to diversify and rotate as opportunities arise and your lifestyle changes.

In all those numbers alone should be able to put you pretty close to your income target, but I would be weary of over leveraging and weary of too much concentration in any one of them. Congrats on the fun that is ahead !