All Forum Posts by: Evan Kilbourne

Welcome to BP @Angel Cepeda. Good to see other CPAs in the mix here!

@Randy Landman Thanks for the reply, I'll go check it out. Any other resources you know of for this type of data?

Hi All,

Just seeing if there are any websites (preferably free) to show vacancy rates for rental properties in certain neighborhoods, along with current rent prices for leases. I don't know if this is possible (I'm not sure if leases are publicly recorded) but if there are any good resources out there I'd love to hear of some. Thanks!

-Evan

Hi All,

Just seeing if there are any websites (preferably free) to show vacancy rates for rental properties in certain neighborhoods, along with current rent prices for leases. I don't know if this is possible (I'm not sure if leases are publicly recorded) but if there are any good resources out there I'd love to hear of some. Thanks!

-Evan

A joint venture is essentially a one time partnership deal. From what I've read, it can be structured to be taxed as a partnership or a corporation, each structure having different benefits and pitfalls. I'd think getting a rock solid agreement in place would be very important for these deals, so talk to your local RE attorney and CPA for more info.

Hi All,

I'm slowly but surely building my systems/spreadsheets to begin wholesaling, and I was wondering from the experience flippers what is a typical profit margin in the OC/LA area? I'd like to get just a ballpark number, and then get more specific numbers from buyers themselves.

-Evan

@John Weathers Welcome to the forums. I'm in SoCal too (South Orange County Area). To mirror what @Nicole B. said, use all the free resources that this website offers. It's a great way to gain knowledge. I've read multiple articles already, and "The Ultimate Beginner's Guide to RE Investing" which is wonderful.

Join your local REIA. There are many out there, and lots of them use this site to post about meetings:

http://www.meetup.com/

That's where I found the few REIA clubs and events that I've started going.

Cheers!

@Patty C. Welcome to the forums. I'm also in CA, but around 450 miles or so south give or take :).

I've only been to one REIA meeting in my local area (so far), and I've already come across a company that does self-directed IRAs. I'm sure there's plenty out there, and joining your local investment club is a surefire way to gain knowledge and connections.

Cheers!

Welcome Matthew, I'm also in SoCal. Might I ask what team you are working for in the SoCal area? You can DM me. I'm looking to get my feet wet in wholesaling.

Cheers!

This may have already been addressed (didn't want to read through every single comment) but I'll try to lay it out for you as simply as I can.

That $80,000 cash flow from the investment (assuming it's from rents) will provide steady cash flow each month/year to the investor. This is a direct and recognized economic benefit to the investor. To re-iterate what you said, capping this cash flow at 8% would lead to a value of $1,000,000 assuming this cash flow into perpetuity. This cash flow/benefit has certain risk characteristics unique to it and 

The appreciation factor is a different story. I liken it to the concept of recognized vs. realized gains for tax accounting. While you have "realized" the gain in that the appreciation has occurred and theoretically you have earned that much value, you haven't actually recognized said gain (that is, recognized any direct economic benefit from the appreciation yet). Once you go to sell the property, say ten years down the road, you have then recognized (i.e. received in cash and gotten the benefit) of that previously realized gain.

Another thing to keep in mind. The appreciation is a different kind of benefit to you, with different risk factors. If you're a finance person, think of all the different risk elements (i.e. liquidity, inflation, volatility, etc.) that affect this particular return. That means that you need to apply a different discount or cap rate to this appreciation ten years down the road. Let's say you determine that the appreciation warrants a discount rate/cap rate of 20% and you won't recognize this until 10 years down the road. This means that you're getting a lump sum payment of $500,000 (to use numbers from your example) in ten years time. The TVM says that this is only worth $80,752.79 to you today. As you probably know, this only gets smaller the longer the time horizon is in which you intend to recognize these benefits.

Hope this helps.