All Forum Posts by: Edward B.

@Jacob Graul, that last statement is kind of an oxymoron. Debt is often used to facilitate growth so the opposite of course has the opposite effect. If you want to increase cash flow then we can talk about reducing debt. But what you are asking is the same as asking how can I increase my leverage and my cash flow at the same time? You can't. Now you can grow and limit your use of debt but you are severely hamstringing yourself.

@David Hite,

@Jay Hinrichs, pointed out some of them highlighting the fact that all things are not, in fact, equal. 

There is business risk associated with the fund, you have to trust that they can deliver. You're money is typically locked up for the prescribed period (although PPR had a way out by buying a note from them, don't know if that is still in effect) so access to the cash is a consideration. 

On the note side you need to assess the borrower's ability to repay and the quality of the underlying asset. Yes, with the note you have total control, as well as total responsibility so it is not nearly as passive as a fund. And you need to understand the investment much better so your experience and knowledge comes into play. I'm sure for Jay who has literally funded hundreds if not thousands of notes to the tune of multi millions of dollars this is a no brainer. For someone without that level of experience looking for a passive return, the choice may be different.

Just to name a few. Choose your poison.

@David Hite,

There are a lot more considerations than just the facts you listed, but all else being equal I would take the note fund. It's kind of like the difference between buying an individual stock or an index. If the expected return is the same (or better in this case) then your risk is much lower with the diversification of the fund. If I were to invest in an individual note I would demand a higher return to justify the greater risk.

@Jared H., this is excellent information. Now that you mention it I seem to remember it from my early days of investing but it long ago slipped my memory. I will keep this in mind next time it comes up with a military member.

@Robert J., work on your negotiating and closing skills too. If people are calling they are interested, even if they throw out some astronomical price. Don't necessarily write them off, try to get in front of them and probe them for more information about their situation and what they are really willing to sell for. I'll bet some of them don't actually have the money or wherewith-all to fix up their property. They have just turned off an episode of HGTV and called you. Ideally you want to be sitting at their kitchen table, contract in hand, when the truth dawns on them.

@Jose Torres,

Since you are prior military I assume you would be borrowing from your TSP. I don't recommend that because the opportunity costs are much higher than people think.

I know you said that you are not interested in a HELOC and I'm curious why, but whatever. If I were you, I would take a HELOC out on my primary and use it combined with the cash to BRRRR or fix and flip for money to put down.

With that kind of income and no house payment hopefully you are banking some serious dough as well. I would be maxing out my retirement accounts and stashing some money away for investing.

You are right, he is wrong. 

 You know, I've noticed that about you. It's not a bad thing. And while I do not have anywhere near 200 doors I have certainly been in your friend's shoes on multiple occasions. Just sell everything and move to Thailand and live like a king or something. I imagine we all have at some time or another. But alas, I love this game and even though it drives me crazy sometimes, I can't stop playing it.

@Amber Bennett, I'm still not clear how you plan to use the money. Is it for a down payment or to facilitate other investing activities?

 Here's to the working man :)