All Forum Posts by: Account Closed

I do not do it often, I can also borrow against the securities at 3-4 %. This is typically lower then anywhere I have found elsewhere. I like this because the money is accessible in 1 day, low rate, there is no payment per month unless issued a call, although you obviously pay the loan, if you hit a point where cf is a proble, it is nice to coast a month or two IF NEEDED.

I use rental income to buy dividend paying stocks, i then use my dividends to buy put options. I´ve spent my career in trading. But yeah, i make the cash flow from the properties, my stocks yield dividends, special dividends, But call and puts can give large results in a short period of time. Securities are liquid and not correlated with real estate. I like this strategy better because being out of state in my market and tax efficient investing, i am find with holding multi family properties 

Some of those formalities are annual reports, meeting minutes, separate records, I am considering just going with umbrella insurance it is less of a hassle and then have my ¨property management company¨sign the lease contracts. Tenants will pay xyz corp, they take their mgt fee and then pay me.

BTW, I would rather have no credit then bad credit. When you start to build it make sure you use it responsibly because over the course of your life people will through credit at you and the credit markets are loosing up more. I was on the phone with a childhood friend today and he told me he got a mortgage that he felt he shouldent have got. I just laughed and thought we are back at it!

Credit cards are good if your careful, here is another approach. If you can show a bank you have assets. I understand if you need a loan assets pay not be very high being young. Personally, I feel a couple grand in a brokerage account a couple grand an a IRA, a couple of grand in a savings account. It shows the lender your interested in investing, you have assets, and are semi competent.

Student loans will help credit as long as there paid on time. But then you have DTI, that may hurt you getting qualified. Remember the first one is the hardest. Also, try a duplex because then many times the lender can qualify you on the future cash flow of the property.

Say if your NOI is 1,725 a month, a lender may allow you to add up to 70% of that to your application.

One thing that keeps me in check is I think, Would I give myself this loan. FHA will want a decent down payment, good credit score, and for you not to be broke after the loan is made. Hope this helps.

A negating technique would be to start off and ask the owner why are they selling, once you know this you can have a better idea about the seller - the property, their urgency to sell, or not. 

If you are really interest in this Google ¨Game theory in Real Estate.¨I think MIT has a good doc. On it among many others.

Coming from someone who owns rentals, and receiving these letters, personally I think you´ll have better success if you research and learn a little bit about the person - property vs sending out mass flyers. They are two different approaches, but I have always felt like I can talk someone into selling who previous before was not necessary for selling or against it, vs randomly getting a flyer in the mail. I just toss them because I feel on the receiving side if you cant take 5 minutes to send me a half way decent lettter I do not want to do business with you.

I got one of my multi families properties to confirm it in a e mail. I held onto that e mail for dear life lol. 

But ideally I want to move more into non recourse loans so it's not an issue. 

Kenneth, 

If you want it to ¨stick¨ a common idea is you set up your property management company and then your llc leases will be signed with your property management company. Your management company will never have any money, but be paid a % for a management fee for each property it manages. The management company should be a multimember LLC, that is what I have seen everyone miss so far. It help the bullet proof process, each member, if possible should live in another state.

Another company can also be the ¨second¨member say a limited partnership because I think there is stuff with the voting rights that makes that beneficial, but this would need to be tailored to each persons sisuation.

An idea I have been told if you do good business you will not have to worry about a suit, but there is no harm in planning for a rainy day. Just make sure it does not take all of your money because you can literally keep changing and setting up company structures for ever as your grow. 

Not sure if you guys look into non recourse IRA loans, but the non recourse part will allow a lender to lend funds to an self directed retirement account, and since the loan is non recourse they have no problem lending to an llc, theorfor you don't have to worry about all that due on sale stuff, the down side is you wont realize the tax benfits right away. But again it is case specific.

i love his YouTube videos... he is a smart & funny guy. I would not pay for anything.

Invest in the book The Due Diligence