All Forum Posts by: John Blackman

This depends on how you organize your entity. Is it a Joint Venture, LLC, GP or a series of promissory notes? This is typically spelled out very carefully in your entity formation documents. The manager or General Partner usually takes a fee or higher percentage for managing and sourcing the deal. Investors get a share based on what was negotiated. This should all be spelled out very clearly before anyone puts in any money.

It sounds like you have already done your homework.  It's simply a matter of risk.  I manage debt on a per project basis and don't worry about the overall number.  As long as the project can manage the downside risk with the equity present on the property I sleep ok at night.  I don't think there is a right answer.  It depends on your risk tolerance.

Yes you can, but be careful of UBIT. If you are investing with your self directed IRA it needs to be in a passive investment that you do not influence. If you have any control over the project that the money is invested in, then you are running a business with your SDIRA and are subject to Unrelated Business Income Tax.

I use my SDIRA to invest in Real Estate projects that my fellow investors are doing that I know and trust.

Check with your accountant.

You might, but good luck collecting it if they are not paying rent. If you are evicting, then you're not likely to get any more out of that tenant. I'd be happy if they didn't damage the property.

What are your long term real estate goals? Choose the strategy that aligns with where you want to develop your expertise.

Sometimes life happens. Divorces can be an emotional train wreck, and you won't care too much about your rent if you're going through a messy one. Sounds like you did everything reasonable, and most importantly evicted at the right time. It doesn't sound like he damaged the property, so consider yourself lucky.

Jeremy, just make sure you have an exit plan. On paper the deal looks good, but what happens if you loose a tenant? Can you cover the expenses for a few months while you fill it? What if one of your room mates moves out? You don't want to be the guy having to sell at a loss to get out from underneath a note you can't pay. Make sure you have 6 months of wiggle room in cash to weather those storms. Even if it looks good on paper you don't want to risk what would happen if you can't make a payment.

Risk management in my opinion is even more important than cash flow. Good luck.

If you are looking to do a flip, I would pass. You're working with a property that isn't near a lot of buyers. You're asking for a long head ache if you ask me. Unless you know that market and who buys undeveloped or small houses far from city centers, I would stick to markets where you have high volume so you can find buyers quickly.

I'd highly recommend getting involved in your local real estate investor clubs. There are always lots of deals floating around those networks. They aren't all great, but you will find lots of fresh deals that haven't gone to the MLS yet. You're also much more likely to find investor friendly realtors there because they are hanging out with them.

We sometimes buy off the MLS, but rarely. The 80/20 rule applies here. 80% of our deals are off market, 20% are on market.

Everyone has their own take on social media, and I am no expert on the subject but I will tell you my experience.

In general, the quality of the invitation dictates the quality of the response. So if it is a light touch mass outreach, it's going to be a low return. That doesn't mean you shouldn't do that, just keep that in mind.

I tend to use social media as a qualifier. That is, I keep an active twitter feed, a complete Linked-In profile, and post all of my projects to facebook as photo albums. So without actually soliciting, anyone who looks at my profile knows what I'm doing and sees results. When you look at my pages and feeds, you can tell work it being done and this guy is producing.

So when you do make a linked-in invite (always add some extra text other than the standard invite) or someone looks at your page because you talked to them in person, they are more likely to be impressed and reach out to you.

You don't need 100 contacts to want to do business with you. Depending on your primarily line of business, 10 to 20 would probably keep you really busy. So instead of going for the mass reach light touch, I try to go for the heavy hit with selective invites to my media pages. I've found this to work well because each ask is more genuine and makes a personal connection, and at the end of the day you are selling you.

YMMV,