All Forum Posts by: Dan Mahoney

@Jason Pennacchio Thanks for sharing this story.  I looked up your house on the county clerk's website.  I think you'll do fine on this one.  I don't think you should expect a lot of appreciation that far out in the suburbs but maybe I'll be wrong and you'll be pleasantly surprised.  The important thing is that you didn't pay a lot for the property, which limits your downside risk.  You have a good chance for positive cash flow if your manager maintains the properties well.  Congratulations on getting started.  I bet it was a bit nerve wracking when you hit the button to send the wire transfer for closing!

@Jason G. Are you also buying in the Atlanta suburbs?

I have a personal bias toward the City of Atlanta rather than the suburbs, but this would obviously fail your "good schools" criterion.  Wouldn't the same thing be true in NYC?

The other comment I would add is that in today's market you have a much better chance at getting a good price on metro Atlanta investment properties with an all-cash offer.  Bidding on an investment property with a financing contingency and inspection contingency almost guarantees you'll pay the highest price.  I understand this may be unavoidable for some investors, but that's the state of the market here.  

@Storm S. I guess the other perspective is that while ROI/IRR is important, so is profit in total dollars. A lot of investors (especially institutions) will prefer a deal with $10 million expected profit at a 9% IRR to a deal with $100,000 expected profit and a 30% IRR. Same goes for deal sponsors - between the fees they earn and their cut of the profits from the deal, they typically earn more dollars investing other people's money in larger, lower-ROI projects than they'd earn investing their own money in smaller, higher-ROI projects. Dollars feed families, not IRR.

@Bob Malecki  If the defect is bad enough, you'll need to file a superior court action to reform the previous deeds.  Your Georgia attorney will be able to tell you whether this is necessary.  If it is, you're probably looking at a claim on title insurance and several months' delay.

To @Paul Vincent's comment, the clerk of court in Fulton County is unlikely to be any help.  They don't handle foreclosures; they just record the deeds.

I'm not a lawyer and this is not advice, but here is what I know about property descriptions in Fulton County deeds:

1) Property descriptions here usually take one of two forms - either metes and bounds (i.e., "Beginning from an iron pin two hundred and twenty feet from the northeast corner of...") or making reference to a plat map (i.e., "Lot 21 of the Green Hill subdivision as recorded in Plat Book 23 at page 104.")

2) In both forms of property description you'll often (but not always) see a sentence at the end of the paragraph that says "Property is known as 635 Green Street according to the present system of numbering houses in Fulton County, Georgia."

I would think that if the formal description in #1 is correct, even if the address in #2 is incorrect, you still have an enforceable claim on the real estate.  Have a Georgia foreclosure attorney review and advise you.

@Jessica Freesia  Welcome, Jessica.  Hard to provide input with this information.  I live, work, and invest in the City of Atlanta.  I feel this fits my economic and non-economic goals.  Here is a suggestion:  Invest in what you know.  You'll assume less risk in neighborhoods where you understand the drivers of value.  An alternative approach would be to get to know some new neighborhoods.  Unfortunately, there's no shortcut for this; it takes time to get to know a new place. 

@Dmitriy Fomichenko @George Blower @Bernard Reisz

Is there an IRS regulation or tax court case that points to the requirement to get a qualified appraisal in advance of an in-kind distribution from a retirement plan?  I've been looking and haven't found one.

@William Walsh Regardless of the answer to my question, an appraisal may be prudent depending on your client's facts and circumstances. 

@Account Closed

Here are three Bigger Pockets threads from the last few months that discuss this topic in more direct way:

https://www.biggerpockets.com/forums/432/topics/49...

https://www.biggerpockets.com/forums/51/topics/323...

https://www.biggerpockets.com/forums/51/topics/495...

@Account Closed  Ok, I'll play.

Are you talking about a monetized installment sale?  

Or, since you mentioned an annuity, maybe a structured sale?

Both of these structures typically involve a third-party intermediary and therefore come with a cost.

@Rick Baggenstoss I started down the path of selling a single family home to Roofstock about a year ago.  The home is in the City of Atlanta (Oakland City neighborhood).  The deal didn't work out, but I would work with them again in the future.  While not a true turnkey provider, they are catering to out-of-state investors and doing everything they can to reduce buyers' risk and uncertainty.  In my case they wanted me to put a new roof on the house because they determined (probably accurately) it had less than 5 years life. I decided I was better off holding on to the rental until the roof replacement was actually required.

One quibble I have with Roofstock is their star rating system for neighborhoods.  In metro Atlanta, their rubric consistently scores exurban tract neighborhoods higher (3-5 stars) than intown neighborhoods (1-2 stars), presumably due to Atlanta Public Schools' below-average test scores.  I think this rating system has it backwards with respect to where people actually want to live in our region and the potential for future price appreciation.

Zach Evanish from Roofstock is here on Bigger Pockets but it won't let me tag him.

@Julius G. You could try to find and contact the heirs/next of kin of the deceased owner.  If there is a mortgage on the property and the taxes are unpaid, it raises a question of whether the property is worth less than the taxes owed or if there are issues with the title (because normally the bank would pay the taxes to protect its collateral).  Have you done a title search on the property?

@Andy Mirza I'm a big believer in IRR as a metric, but it's only meaningful over at least a medium-term (multi-year) time frame. For example: If I get in and out of a note investment at a profit in 3 months, the IRR is going to be ridiculously high, but the investor now has to reinvest that capital elsewhere. For that reason, I think it is important to pair IRR with multiple of initial investment (e.g., 1.5x return on invested capital) or dollars returned (e.g., $150,000 profits paid to investors).

Like @Chris Seveney said, you need to use Excel's XIRR function to deal with the irregular cash flows that happen in most investments. IRR function is designed to work with an initial investment (Year Zero) and a series of annual cash flows on the last day of Years 1-X.