All Forum Posts by: Dan Rowley

@Kyle Curtin  Absolutely it's wise and very valuable to be LP investor first!

@Shilpa Matlock  a property today purchased with a 6% loan will perform (financially) much worse than the same poperty/price a year ago with 3.5-4% interest loan.  I'm sure you're accounting for this, right?

@Greg R.  what real estate market are you referring to?  There is not a single market every metro/submarket has different dynamics.  There are markets that will correct more and some that may correct very little if at all.  And not sure why 'crash' is the term being used most often I think it's because it's a more dramatic headline that gets more clicks and attention.  If a market/pricing is going up rapidly (bonkers in some markets) we should not expect that to be the norm and have to expect a correction back down at some point as that level of increase is not sustainable (except via the easy money / inflationay policies of the last several years).

While the depreciation benefits of real estate are real and nice, one should not let the tail wag the dog.  There are a whole lot of other considerations for syndication investing.  And as others here have mentioned already it will not offset W2 income unless you meet REPS (real estate professional status), which is not an easy thing to do unless you are very active in a real estate profession.

@Chris C.

There is no right answer it depends on the individual, but for me currently syndications are more appealing.  The main objective for me is cash flow and TTL $ returns.

I think you have to take what the market gives you.  You can certainly look at buying something yourself, but I have looked and over the prior 1-2 years, there is just not much decent stock available (i don't like C or D class housing generally) that will pencil out to provide cash flow, due to the escalating prices and now it's even worse with higher debt costs. In strong/growing markets you could find decent rentals to buy a few years back, but now that is extremely difficult in the current environment.

regardless of stock market gyrations, folks will still need a place to live.  So, that is bullish for real estate right?  :)

@William Yeh   
Under non-recourse loans, the guarantor is not generally responsible for losses the lender incurs, unless they commit certain bad acts; such as fraud, waste, damage or destruction, misapplication, misrepresentation, bankruptcy, or environmental contamination.  So there is still someone that needs to sign their name and would be responsible in the even to of 'bad actor' behaviors.

@Connie Dai   There are some rules of thumb but that need to be tailored to the specific situation.  You can probably also google and find good online resources on the topic. 

The two main ways to compensate a loan guarantor is 1) an annual fee and/or 2) a percentage of equity.
>Annual Fee – If it is a nonrecourse loan, the typical fee is 0.25% paid out annually. If the loan balance at the end of year one is $10 million, for example, the fee would be
$25,000.
>Equity – In addition to an annual fee, you can offer an equity stake in the deal.Depending on how you negotiate, what the projected returns are for the deal, and
how many other options you have to guarantee the loan, for a nonrecourse loan, the percentage can be 5%, 10%, or more.

@Matthew Rubino Rule of thumb is you need a debt to income ratio of <50%. Do you have / you must have other types of debt that contributed to your 60% DTI = maybe student debt, auto loans, business loans, etc.?

@Patrick K.  whether there's merit in it is subjective and every one will arrive at their own conclusion based on their individual circumstances.  If you're in a hurry to buy something you might bite the bullet and do it BUT if you can wait and be patient market conditions are bound to change as things are very cyclical.