All Forum Posts by: Evan Polaski

An attorney.

@Paula Impala, while I certainly understand the connection you are trying to make, I tend not to think of podcasts as having this relationship.  Podcasts are by nature, typically mutually promotional.  Guests get a platform that will hopefully gain them visibility and hosts hopefully are able to tap into the guests platform to grow their own reach.  

Therefore, while it would be nice to for people to NOT appear on the shows of unscrupulous people and give them additional credibility and reach, in reality, the guests are many times approached by the podcaster to attend, and they view it as free marketing.

Additionally, many podcasts I have been a guest on have taken 2-3 months from filming to release.  Then, potentially, the podcaster recycles the content and republishes.  Therefore, it is entirely possible, but I certainly don't know with any certainty, that the names you mention were guests prior to any nefarious acts being committed.

@Amanda Moskowitz, here's another vote for the market you know.  For most people this is where they live.

A couple things to think about:
Assuming you are buying single family or small multifamily: your margin for error is very little. (If you own one house making $500/mo, which is probably more than you will actually get, that is $6k/yr. One bad tenant, one unexpected HVAC or roof, will quickly eat all of that profit and then some). So, trusting the PM and RE agent, and the like, at least at first adds a lot of risk. And if you are looking for a BRRR type property, expand that risk even more.

Second, again because you don't have much room for margin starting out, travel to visit that property can quickly eat a good amount of your cash flow.  Especially when you only have one, or maybe two, in a market, you will have your fixed costs: hotel, meals out, rental car and flights.  Two trips per year, even for only 1 night, can run you a couple grand or more out of that already limited cash flow.  This does start to balance out when you add more and more properties in a market, but that is money you could be building for your next one.

Third, you have no choice but to pay a PM when out of market.  10% monthly PM fees, marked up maintenance costs, typically more frequent turn over which equates to more frequent turn over repairs and leasing commissions.  It all adds up to very real money.  And, while you may choose to use a PM even locally, at least locally, you can step in temporarily if one is not working out, where out of market you need to keep a bad one on, while you interview and try to find a replacement.  Additionally, if you go to a smaller market, where you might be able to find more cash flow, you will also be limited in how many PMs you have to choose from.

@Ross Kane, I love the retail space.  I agree that, at a high level, when investing in residential: you are investing in someone's home.  They are there before work and after.  You can have calls 24/7.  And, you often have a lot more tenants, dollar for dollar invested.

But, there are a lot of risks with commercial properties that are less prevelant in residential.

First, everyone needs a place to live.  Not everyone needs to/wants to start and run a business.  So, where you can pretty easily count on 95% occupancy in many good residential areas, retail can have very long, drawn out vacancies.

Second, and tied to the first, you need to be in the know on what tenants in general, are seeking, and who the tenants are that are looking for space.  Maybe you can just put a "for rent" sign in your store front, and fill a vacancy, but probably not.  

Third, at a larger scale, non-recourse loans are the norm for multifamily.  Retail is full recourse.

Fourth, leasing commissions and tenant improvements are common and expensive in retail.  You have a vacancy, find a salon to want to move in?  Break out a hundred thousand dollars to run all the plumbing, build the dividing walls, etc.  Yes, you can amortize that into rents, but you need the money today to do it. 

Fifth, most jurisdictions are a lot slower to approve commercial building plans than residential.  There is a building in my neighborhood which had a 6 month delay in lease start because they couldn't get the new entry door approved.

All in all, I love retail.  It creates some efficiencies that are never possible in multifamily, as you allude to, but it also has a completely different set of risks, many of which I would rank as significantly higher, particularly as you are starting out.

@Jason Merchey @Soup Nikk @Chris Seveney

I hear you, Soup.  There are pages and pages of FAKE websites created with no real details.

As Chris noted, if any of these sites actually site a case filing number, it is the EMPLOYMENT issue (tied to bonuses due after termination of employment) exclusively.  

The creation of websites, AI generated articles using deep search on many AI agents can be very powerful, but in this case, and likely many more, you simply cannot believe everything you see on the internet.  Here are a couple red flags about this website, besides knowing a few facts of this specific article that are completely false:

1. Every article you click on is written by "admin".
2. Every lead image is a clear internet scrub or AI generated image
3. There is no physical address on the Contact Us page, and to contact them, it is leading to a gmail account (I don't know any reputable businesses that don't use professional email addresses)
4. The style of every article is very AI: no real commentary or detail on things, lots of large bold headers with a couple sentences below each.  But mostly everything is fluff, no real specifics into any topic they cover.

@Allen Berrebbi, take my comments with a grain of salt, because I am certainly biased here.

First, I agree with Clayton about guru's in general.

But, everything with this scares me.  The link provided goes to a landing page with a form.  No real information about anything.

When you go to her linkedin page, it does not mention anything about her professional achievements; purely sign up for her newsletter or get more info on her courses, of which, she is apparently well versed enough to teach both hotel and self storage investing.  

Trying to take my cynicism out of it, I would consider a course from someone that has real experience to teach. If you are not finding news articles, corporate websites, etc with the guru named, and their linked profile doesn't link to an actual company, I would be skeptical.

Before I would sign up for anything, I would talk to her (or any other guru) to understand first: are they even competent enough to teach what they are, and second: the logistics of the course: is it pre-recorded content or live?  Is it with the actual guru or one of their people?  What access do you have to the actual guru?  How long does that access run?  What are they going to teach you?  What resources will they actually provide?  What outcomes do they anticipate as a result of this course?  Referrals from more than a few students?

And lastly, cost.  A $500 or $1500 course is more likely to be "worth it" than a $25,000.  Based on what I have seen from MOST internet gurus, they are offering very basic, table stakes type in info that they regurgitate from some other guru online who offers it for free.  Not to say there isn't value in consolidating your learning (which is essentially what college is), but any guru will present what they feel is most important.  That info may be very valuable or common sense to you, and you won't know until you pay.

@Samantha Chacon-Johnson, I will generally second Jonathan's comment. The best marketing you can do is have your property on the MLS. That is the primary driver of finding buyers.

I would be ready, and maybe you are, that you will very likely be paying the buyer's agent commission.  Most will have one.  But, on top of that, you will very likely have items arise in inspection that will cost money, potentially any closing cost assistance, and customary fees.

@Conner Pace, I would not go out to networking events asking someone to be your mentor.  Maybe this is not the approach you are taking, but being a mentor to someone, to me, sounds like a larger commitment than I can make.  But, that doesn't mean I am not open to answering questions, heading to coffee periodically or someone willing to buy me a cheap lunch to talk for an hour here and there.

I would also attend meetups and REIA groups. You are going to meet people that have done it and get the opportunity to ask a question or two from a bunch of people. You do not have a "mentor", you have many people out there helping you learn the business.

And like Nicholas said, the best lessons will be those you learn from doing.  As long as you are not trying to learn with other people's money, like a lot of syndicators have tried, I think the best way to get going is exactly what Nicholas noted: save up and buy a property. 

@Mark Kenney, very valuable information.  Per your comment about CPAs not educating, as a person that interacts with investors and potential investors every day, I take this upon myself to do the education part.

While I surely understand the write-offs can help some investors, many (dare a say a majority) of LPs can't use all of these losses.  Not a major deal, because they do carry forward to sale, if not fully used, but for those thinking they will invest $100k and write off $70k of their W2 earnings, it simply won't happen, at least in a way that is generally compliant with current tax code.  

At the end of the day, when I see groups getting overly pushy about tax benefits, it tends to be a red flag to me.  As you note, it is a deferral strategy at best, and especially as an LP, when you have no say in sale timing, that tax bill can be treacherous.  And even more of an impact on those "preferred shares" that many groups offer: Say, 10% preferred return at top of equity stack and very minimal upside participation on backend, but structured in a way that there is a K-1 and depreciation is shared.

@Li Ou, since it seems you want to get into local deals, I would highly suggest attending meetups/REIA groups in your area. The meetups in my area focused on real estate investing are almost entirely flippers and rental owners, with a decent number of wholesalers and realtors trying to get clients. I would imagine the Bay Area would hold the same.