All Forum Posts by: Daniel McNulty

@Brian S.

Anything with a yield like that will certainly have a heightened risk profile.

Think about it logically, you are getting 15 net of all their fees?? So they are either levered 4x which is risky in its own regard or these businesses are paying high teen rates which is a reflection on the business risk.

There is certainly a time and place for it but again it’s a far stretch from a CD.

@Peter Morgan

The interest saved on the mortgage likely would be greater than parking it in an average savings.

That being said, you will likely be limited to using 80-90% of it as the lender will want some equity left in the property. Unless of course you already have ample equity in there.

When you do go to use it the rates on Helocs tend to be higher than direct residential mortgages.

@Sam C.

Syndications can certainly offer the same upside as singles with less work. However the due diligence work load upfront can be formidable and quite different from singles. There are lots of good threads on here though where to start.

As for the tax implications, there are some solid ideas below. I would also include opportunity zones and deferred sales trusts as potential avenues forward.

Either way, your RE journey does not need to necessarily end, rather pivot to a less hands on role.

Good luck!

@Ian Ippolito

As much as I agree on the regulatory changes you describe, I fear it will never happen.

Practically speaking, half the trouble validating managers is their own desire to keep deal sources and locations out of the hands of their competitors, not just the regulatory hurdles.

I will say that if the private placement marketplace was opened up to a wider audience where arbitrary investor quantities were not imposed, the need for crowdfunding sites would not even exist. Capitalism itself could drive a more transparent system at that point.

@John Laney

Preferred return doesn’t necessarily mean there is no upside, just that you get the preferred return before they get their cut. Full disclosure I didn’t read the links you posted...

That being said, if it is an all in return, it’s quite mediocre for value add or opportunistic, but is in line with conservative “core” offerings.

If there is no value added component, you are unlikely to find much better. Personally, I would consider adding some value add allocations to the mix.

@Lance Neighbors

A trust would be the simplest way forward. The more complicated part is what other guidelines you want the trust to adhere to.

@Elizabeth M Williams

Strong syndications certainly would be easier from across the globe.

It generally requires meeting the accredited investor status which requires a 1M net worth.

Don’t over extend yourself trying to play catch-up... we are in turbulent times.

Good luck!

@Eugenio Valladares

No, his holding company does not sound like a good idea, based on the limited info you shared.

With that amount of money and the inability to house hack, you are probably best off waiting and learning the ropes on here to RE investing.

That is still enough in most markets to get started, but educate yourself first. The podcasts and books on here are a great start.

Good Luck!

@Tuan Tran

Inflation is a long term problem, not short term. If your time frame for finding a deal is a year or less, I would not trouble myself with inflation. From an economic standpoint we are still in a deflationary environment. Inflationary pressures may pickup in the near future, but most estimates put it a year or more out before it even appears on the radar. One of the more prominent factors is the employment number as Consumer spending makes up nearly 2/3 of the economy. Once we approach something closer to full employment in the mid to low single digits, inflation will become much more likely if not addressed.

All that said, you are not alone trying to pickup some yield on idle cash. Money markets are a decent start. Ultra short bond funds can essentially replicate those with a little more yield. Online savings accounts are another frequently used vehicle. If you can pickup upwards of 2%, you might as well sit back and relax. For the limited duration it will be sitting there it is hardly worth the effort to pickup any more yield.

Generally avoid the market or any more risky or illiquid vehicles to store cash. If the cash is supposed to be readily available for a deal, you should not put it at risk or lock it up.

Good luck!

@Everett E.

There are many better RE funds available than FundRise.

They are an average operator and are having liquidity problems. You can do better than that.

Other than that, not a half bad plan.

Good luck!