All Forum Posts by: Jeffrey Holst

I like having my property bunched up it makes management much easier. Another underrated benefit is local knowledge. If all your property is in close proximity you tend to be the first to recognize opportunities. There is some risk if you pick a bad area but in general if you have good numbers and like the area you should be fine.

Makes perfect sense

@Brian Burke Thank you.  I had been suspecting for awhile now that trying to get a commission on multifamily was impacting my ability to secure deals.  We started engaging brokers directly and asking for their help and magically we started getting sent more deals and got a couple LOIs accepted.  I wish I had know this earlier cause I think we missed out on a couple of decent deals.  Oh well I'm glad to see that my informal conclusion is supported by your experience.  

Lots of great thoughts here however I object to us being "overdue" for a crash  sure markets are cyclical but crashes are relatively rare in housing and 08 was an anomaly.  ( I get that @Linda Weygant wasnt saying she thought a crash was overdue so hopefully this doesnt sound like I am picking on her) 

Previous "crashes" were much less severe.  I think we have at least a couple years before a correction in most markets and when it happens it will be relatively small.  (I could be wrong of course).  So it is important to buy for cash flow and keep leverage with in reasonable limits as @James Masotti stated.   

I do think that in general when interest rates go up rents tend to go up and that during crashes rents tend to stay flat but they rarely go down significantly. In my opinion there is a certain stickiness to rents that keeps them from falling.  Obviously in some markets and in some neighborhoods this doesnt always hold true but over all rents in 2010 were pretty similar to rents in 2007 and I'd expect a similar result in the event of another crash.  

Originally posted by @Scott Davis:

i'm looking for a recommended property manager in the Chattanooga area.... ;-) Thanks

 These guys are good.  

http://firstpmusa.com/

One of the owners Brian Levredge is an active BP member as well.

This seems like a really bad idea to me.  Sure it saves a little on the front end but one as pointed out above its not really a syndication its a partnership and I think if you call it a syndication you are opening yourself up to liability as a sponsor/syndicator with out the benefit of a solid structure and a PPM.  PPMs by the way are not required for syndication they are just a really good idea.  If you take someones money and effectively control its disposition and you are selling them on an investment you are quite possibly a syndicator whether you like it or not.   

Disclaimer: I happen to be a lawyer (and I did once play one on TV ) so I cant claim I am not but this is way outside my legal expertise and you would very wise not to consider this legal advice.  You should instead hire a good SEC attorney and run your idea by them and see if they see issues.  I suspect they will advise you against trying this at all.  Frankly,  its just not worth the added risk and like @Jay Hinrichs said there is no way Id invest in a structure like this. Too much liability. You are right that signing the loan doesnt create liability but all partners can be liable for the actions of other active partners and it isnt impossible to pierce the corporate veil and break the LLC.

NOTE: THIS NOT LEGAL ADVICE AND I AM NOT YOUR ATTORNEY

@Patrick M. I think @Account Closed is correct and is being very cautious.  If you can wait a few months its probably best but since the home is your primary and has been for a good amount of time there is probably nothing that anyone can do post close to prevent you from moving.  And on top of that it is unlikely that anyone would notice or care.  If you pay your mortgage bank usually are fine with just about anything.  It is different if you buy a house claiming you are going to live there for favorable mortgage terms and then either never move in or stay a very short time.  

In this case you are probably fine but Id wait a few months unless you really have a good reason to jump right away.  Another thing to consider is how soon you can get a new mortgage on a new place for yourself.  It might be hard if you plan is to go buy another house next week to even get decent financing.  Might need to wait for that reason alone. 

@Bryan Venable If you get down this way look me up.  Or if there is anything else I can do to help.  

Take the 30 you wont regret it.  You can always pay more and the interest savings arent particularly helpful where as cash flow is very helpful.  Some day when you have a vacancy and dont have to make the higher payment you will thank all of us who told you to take the 30.  A bigger spread between costs and cash flow equals more safety and for a first deal safety is paramount.  Lower payment equals less cost and a bigger spread which means its safer.

@Joshua D.  If it really irritates you then you probably arent in the right mind set to help them.  Which means you wont really be much help. Consider that they might feel as if they arent being productive and they are looking for something to do that is productive.  I say be kind to them and offer encouragement where possible but in general just tell them that you wish them luck and let them learn like you did.  If you see one or more actually making a good effort you might later feel more inclined to be helpful.  

I dont think there is any rule that says you have to help people out.