All Forum Posts by: Eric Schultz

John Moorhouse I was a construction project manager on a travel team tasked with building power plants in multiple states. Saved up the down payment for my first investment property fairly quick this way, right out of college. In the industrial/power construction sectors, you can do really well on the road. It just involves some sacrifice leaving home for extended periods. Any one in the military could easily relate. Having professional construction management knowledge and experience easily translates to taking on flips or owning rental properties.

Diego Hernandez I have involved wholesalers in my deals before, but indirectly. For out-of-state investments, I will let the flipper buy the property from the wholesaler and complete the rehab. I have influence on the scope of the rehab as the next buyer in line, and I am still buying slightly below ARV. When the flipper is 1 - 2 weeks away from punchlist on the rehab, I have the property manager start aggressively marketing the property i.e. “coming soon”. The flipper knows the local market best and will only buy from the wholesaler if the numbers will work. The flipper knows they have a buyer waiting, which allows them to sell at a price lower than ARV as their holding costs are capped.

William Kim You might be talking about a private placement offering under SEC Reg D 506b where both investors can participate. There would not be any major difference in investor benefits while participating in the same deal. One of the main differences between 506b and 506c is how the advertising of the deal offering is regulated. Some may argue that the deals available under 506c offerings (accredited investors only) can be more lucrative (higher IRR).

Eric Fitzgerald Check out PersonalCapital.com for managing your cash flows and investments. It is more powerful than Mint.com, but you can decide what makes sense for your current personal finances. Use a credit card (with no annual fee) for as many living expenses & discretionary spending as you can. It is important to build up your credit score to have the ability to do bigger transactions with lenders down the road. The catch is that you must be disciplined enough to pay the credit card balance down to $0 every single month; do not accrue interest or late fees. Only use the credit card if you have the cash to pay for the purchase already. Focus on these steps: 1.) Earn 2.) Save 3.) Educate 4.) Invest 5.) Repeat (often) Track & grow the following: 1.) Savings rate 2.) FIRE ratio 3.) Net worth Your savings rate is determined by your earnings and your spending plan. The “spending plan” has a more positive outlook than the dreadful “budget” word. The FIRE ratio = monthly passive income / monthly expenses Some people include their primary residence in the net worth calculation and others (accredited investors) do not. One goal might be to strive for accredited investor status, which is defined by the SEC (google it). Good luck to you!

William Kim There has been great advice so far. Once you have selected the sponsor / syndicator and market(s), there are a few more things to add to the due diligence step. For example, before I invested with a particular sponsor I made a trip to meet their investor relations person and CEO / founder in-person. I also toured a few of their multi-family properties and attended a presentation to understand their investing model, track record, current holdings and performance, recent acquisitions, etc. When you are investing $50k + per deal with an operator it’s a good idea to meet in-person, and see if you can like and trust them. Depending on whether you are accredited or not will determine which sponsors you can invest with. A. If you are an accredited investor, you can participate in a SEC Reg D 506c offering as a limited partner. Some offerings have a minimum of $25K investment. B. If you are not accredited, you can participate as 1 of 35 non-accredited investors or “other purchasers” in SEC Reg D 506b offering as a limited partner. This option allows you to invest along side accredited investors. Some offerings have a minimum $25k investment.

Jonathan Hulen You can still get close to 1% with B-class in the Indy area. Good schools, low crime neighborhoods and rents above $1,000/month. I personally avoid C-class and lower on individual property holdings.

A tenant once asked for an old (medium) sized stump to be removed on the side yard of the lot because it gets in the way of his path when mowing the lawn.

Adam Schneider Classic!

Todd Powell There are many solid private placement opportunities still out there, especially if you are an accredited investor. Diversifying a few $50k plays in well-vetted syndication deals, with an experienced operator, will likely outperform most individual investors’ efforts. It’s not uncommon for these accredited investor deals to have 15% - 25% ROI. Some operators return investors’ original capital back in a few years, leaving their investors’ with equity share until the sell date. This period of “infinite returns” really boosts the IRR on these deals, especially if you re-deploy that same capital in a second deal while you are still in the first deal. Once you have done your due diligence to find the right operators to invest with, this style of investing becomes truly passive.

Brett Palmer Neither, if you have goals of increasing your passive monthly income in a shorter time horizon. Equity in a property brings zero return. A dollar in cash does not have the same utility as a dollar in equity. Safely leverage more rental properties with positive cashflow and let the tenants paydown the mortgages.