All Forum Posts by: John Corey

The IRS might want someone to pay what they are owed. If they feel they can redeem and sell for a profit, you might need to wait them out. 

As a taxpayer, would you want them to collect what they can?

I doubt it is as crazy as you expect. The 4 wire is for data connection and can be used for voice

Unless the extra work of removing them is money you can afford to spend, what is the downside of leaving any that work? The people who run the electric are likely to have the tools to run a quick test. 
If you do remove them, you can leave the wires in the walls and patch over the socket opening. The lines have no power running through them when they are not connected.

While you can find investors or lenders in many places, educate yourself on the regulations for financial promotions. 

1. What is a promotion and what you can do so you do not fall foul of the SEC regulations?

2. There is a bit of a cliff edge if you end up with 2 investors in the same deal. Even as lenders you could be crossing the line when it comes to pooling of funds.

3. The more you post on social media, send out emails, etc. the more you are leaving a footprint for future legal action. If you do not know what you are doing, be careful. It is hard to argue later you were not promoting if there is lots of evidence on various forums. No one will care about it until there is a trigger event. Normally that is when an investor is not happy and wants out. They will report you to force you to hand their money back.

You also need to check the services in the area. What can be done for sewer and power? Are there any traffic studies required before you improve the property? Any other obligations (schooling, etc)?

Consider the exit. What property type will give you more flexibility in terms of financing or a sale to an end buyer?

Highest and best use normally becomes clear when you run the various numbers and you look at the trendline for how the area is developing.

Brian's point is a good one. Cap rates are what the market thinks of an asset class (hotels, MFR, office buildings) in the local environment and given a prevailing interest/inflation macro environment. If interest rates are rising (the Fed interest rate; not rate you pay on a loan), the market will be expecting a high yield from all RE. People with cash will consider bonds, real estate, etc when looking at passive investments. There is a ladder with the USA Treasuries and USA bonds at the low end and higher risk, less liquid investments at a higher rate (a cap rate is the RE term).

You can not ignore cap rates when buying and selling a commercial property. While you might be adding value and other ways improving the deal, the eco system the property exists in still matters. A well structured deal with great up side is fine. Just remember that the financing and the exit will still take into account the cap rate. 

You could say the cap rate is like the weather. While you can not control it the current or future weather will still have some sort of impact.

Thanks for the update. Well done on structuring the deal and making it a winner on paper. Next, your execution will solidify the value. Go, go, go. 

 Thanks for sharing. 

When in the USA, I am just south of Philadelphia. I travel up to some RE meets. Happy to meet up for a tea or something if that works for you. This trip, I am here until later this month. Then back for Thanksgiving through early January.

Thanks for explaining.er. 

As it happens, I started out as a software developer in the 1980s. I started investing soon after.

What you will need for your investor community will be a lot easier than building a product which can be sold to others. Supporting customers, marketing and similar can be expensive compared to having an in-house tool. 

Good luck either way. Well done on making sure you are SEC compliant.

BTW, I am a USA investor. Since 1983. And UK. I commute.

 Got it,

I would be surprised if anyone flipping operates with a 90% profit margin. Saving on taxes when extracting the profits is a different subject.

 A great point about most of the attendees also looking for cash. It is rare to find a club where the majority are cash investors who are interested in backing someone else. People with cash do not have to network as much as people who need the cash.