All Forum Posts by: Austin Fruechting

Originally posted by @Rob Beardsley:

Originally posted by @Austin Fruechting:

Originally posted by @Rob Beardsley:

Congrats! This is an amazing deal from all angles! Your point about not being too concerned with 1031 at risk of buying an ok deal is very interesting.

 My banker who is very experienced and is slated to be the next president of the bank has the same sentiment. He has seen many otherwise successful investors force a 1031 and that was their one bad deal, and would obviously be a big one. 

My thought is what if it is someone's 3rd or 4th exchange and they have tons of back taxes. At that point it is probably worth it to just keep the 1031 train going, right? Also, another solution to this problem would be to do a reverse 1031 exchange where you buy the new property first and then sell the current portfolio/property.

Yeah, I’m obviously not always against 1031, and my banker isn’t either. I’m doing one and he’s funding it! It can be an incredibly valuable tool. 

I’m just providing a little caution. It can also be a time when investors throw the mantra of “no deal is better than a bad deal” out the window and force a deal, fudge numbers a little to make it look good, etc all to save the taxes. I’ve heard of that happening from multiple sources and my banker has seen it first hand.

Originally posted by @Rob Beardsley:

Congrats! This is an amazing deal from all angles! Your point about not being too concerned with 1031 at risk of buying an ok deal is very interesting.

 My banker who is very experienced and is slated to be the next president of the bank has the same sentiment. He has seen many otherwise successful investors force a 1031 and that was their one bad deal, and would obviously be a big one. 

Jared Boundy - yes they were motivated sellers, but in a different way than that phrase is normally used. The sellers are big players and wanting to unload small properties that are in need of a lot of work. Being able to sell them all at once, and without an inspection clause, was worth it to them.

Fernando Enrile - yes I use a portfolio lender

@Jessie Niu - I addressed the negotiations in a couple posts. 

And a commercial lender as opposed to???

Originally posted by @Michael P.:

So as I mentioned, no mortgage right?

If 350 is the NOI after expenses, and mortgage for example is 250, It would be 600*12/31000

 Yes and no. 

Mortgage is never an "expense" calculated into the NOI.

So in that case your NOI is $600 per month. Your cash flow is $350.

Your cash on cash would be ($350*12) / $31000

I was giving the formulas for correct usage of the term NOI.

Gross income

- expenses

=NOI

.

NOI

-mortgage payment 

=Cash flow

.

Cash flow/cash invested = CoC return

Originally posted by @Matt K.:

@Austin Fruechting have you noticed difficulty/increased cost with construction due to all the projects going on out that way right now? Or you keeping a crew busy enough not to be impacted?

 It is a little bit more expensive than when I first started back in 2010, but not a lot due to the volume I can give. 

Originally posted by @Felipe Lopez:

So I am exiting the military and my goal is to retire in another 10 years from investing in real estate. So far I own one rental property in El Paso, TX. I currently have $70k saved up and I am trying to figure out the most logical way to have a positive cash flow of $3,000 in 10 years. I will also have a job in the oilfield making about 80k a year but I want to stop working after 10 years. Where do I start and which way would be the best to invest my $70k into real estate? Also, I will be in San Antonio, Texas.

Thanks,

Felipe

 In ten years you should be able to replace your entire income of $80k per year or even much more. Start by research research research. 

Originally posted by @Deren Huang:

Bruh.. incredible.

Why not just sell the 4 units that are the "headache" units and just take the others? Are there any "weird" houses that you had to take in the portfolio?

 Two of them are single family houses, and two of them are 1/2 a duplex. I'm no stranger to big projects, so just because they'll cost a lot doesn't mean they are a headache to me. My forced appreciation return on those units will be significant. 

There was one house that has some pretty short ceilings which is certainly a drawback, but that's the only "weird" one.