All Forum Posts by: Eric Schultz

Prost!

Shane C. Downs The money is just a by-product that allows for options and more opportunity to buy something or spend your time the way you want to. For me, fun is getting things done. Real estate investing is the project or the challenge. It provides fulfillment. I’d be bored if I didn’t have multiple things to be working on.

Ryan Pozzi The abundance mindset thinks “expand your means” and the scarce mindset thinks “live below your means.” One simple example of expanding your means: Buy the new car you want, just make sure you bought the positive-cash flowing asset first so the new car payments are covered.

Kenneth Garrett The Brian Buffini Show is a good one. It’s real estate, business and personal development focused. The show motivates with solid strategy and tactics on a variety of topics. The Real Estate Guys Radio Show covers a lot of good topics. They do market spotlights, economic outlooks, investment strategy and niches.

Brad Hasseler Is this a flip or a property you will hold for a while? HELOCs are best for short term deals like flips, but if you maintain reserves than using a HELOC as a down payment on a buy n hold can still work. It will just reduce the cashflow. HELOCs typically have a draw period (5 - 10 years) with a variable rate and then a repayment period (5 - 20 years) with a fixed rate. During the draw period you just have to pay the interest. During the repayment period you pay principle + interest. If you still have substantial equity in the property and your finances are in tact at the time the repayment period starts, some lenders will allow you to pay off the original HELOC with a new HELOC to revert back to the draw period.

@Bryan Richardson

We’ve had different experiences when it comes to crawl spaces then.

I've done flips with crawl spaces and actually own rental property in Indy with crawl spaces, full basements and slab on grade. The crawl spaces have created the highest repair expense during rehab than the others in my experiences. I don't buy off the MLS, and yes a third party inspector is used before closing the deal.

Crawl spaces are just a place for mold to grow on floor joists, whether it be from a leaky pipe, improper ventilation, poor drainage around the foundation or a combo of these things. This all just leads to a bigger issue later. 

James Wise In my experiences, you can easily achieve 10% annualized return as a debt investor in a syndication deal. With LP equity share in a syndication deal, 10% return gets a bronze medal; 15% return gets a silver and 20%+ gets a gold medal. There are plenty of deals out there right now that one can participate in to achieve any of these returns mentioned. Now 32% return sounds a little high-reaching, doesn’t it? I’m still doing my due diligence by the way, but here is what I understand of this operator’s model. They use supplemental financing at the core of their strategy and, their pro formas show target returns up to 20%. They return investor capital in phases: 50% by year 2, 75% by year 3 and 100% by year 4. With an equity share as an investor, you stay in the deal thru year 4, 5, 6, etc until the property is sold. Beyond year 4, your return is technically infinite because you received all of your initial capital back to redeploy into another deal that could return another 20%+. This operator has a track record (60+ multi-family deals) and is taking on a new deal every 5 - 7 weeks to feed the machine. So, there is continuous opportunity with them to redeploy into deal #2 while still holding equity with return in deal #1. So, it is possible that you achieve 20% average return on deal #1 while that same starting capital is re-invested and producing a return in deal #2. You’ll need a spreadsheet to calculate the return on the initial capital invested, but I can tell you it should be greater than 20% with some due diligence and using the “velocity” of money to pump up the returns. This is how they have been able to suggest 32% return is possible. I will say this...savvy syndicators are capitalizing on bonus depreciation right now, which definitely helps the returns they are able to produce for their investors. The current tax law indicates that this phases out after 2022. So, get that lazy capital working now...

Basements are common in the Midwest and preferred by tenants for the extra storage space, cooler temps during the summer months and extra living space if partially finished. Cast-in-place concrete basement walls are preferred over block walls. Slab on grade is preferred over crawl spaces. Make sure to always get a third party inspection!

I forgot to mention the property is in Indy.

We did $25 / mo for one dog on a single family plus a $500 security deposit and a one time $75 pet admin fee. This is all spelled out in the lease pet addendum. Before permitting the dog on the property, we required a photo, name, weight, age, owner testimonial of the pets disposition and proof of current vaccinations.