All Forum Posts by: J. Martin

@Drew Vukov I don't know all the details regarding the 5/10 and how it is split among two investors. But it will show up on both your credit reports. One suggestion is that you could alternate who takes the loan, then make your partnership agreement state that both are responsible, and have heavy equity dilution for someone who doesn't pay their share (or even equity dilution of all deals to tie everything together). That way, both have a strong incentive, even though they are not on the note. And you avoid the potential for an earlier end to those sweet 30yr rates!

Hi @David Lee ,

The way I was able to be successful setting up a local meetup in my area was to post a bunch of local "keywords" that got other local BP member's attention.

For example, post a bunch of local cities on this forum (especially bigger cities), and some local counties. Also, tag anyone you know from the area, or search for cities on the forum search or member search and invite some people. You can also check meetup.com or search for a local REIA group online.

I'm sure you'll find something between all that.. Good luck!

ps. I have mostly 2/1's, with a 3/1.5, and wish I had a studio and a 1br too..

But people tend to stay on the smaller side out here because it's much more expensive. Not many offices as extra rooms, or not fully utilized space.. (and kids sharing rooms).

Hi @James Syed ,

So we meet again!

Many investors like different size units in larger buildings because they are easier to fill/market with who is coming in. Even with my small 4plex and SFR's, I always get asked, "Do you have a 3br also?" or "I'm just looking for a 1br for now." or "my sister is looking for a bigger place also." or "I've been living in your building in the 2br for 2 years and like it, but my son is getting older. Do you have a 3br available also?"

You should definitely look at what the construction was like, and whether or not it is a sub-par conversion from a different building. I just posted about all the great info about unit sizes and other info on city-data.com

See how the unit mix compares to the average unit mix in a city.. Or how it compares to the demand today for bigger or smaller units based on household size and % renters on the website.. Good luck!

I've seen many questions on forums of where to find good demographic information, population trends, statistics about the makeup of properties, or average number of bedrooms per unit. All that, in addition to the distribution of commute times, distribution of bedrooms per unit, units per buildings, density, makeup of people and households, and almost anything else you can thing of, I have found on city-data (free):

http://www.city-data.com/

If anyone else knows of a better one, please post on this forum and I'll give you a few big "VOTE"s! Hope that helps some others out there looking for statistics!

Oops @Joe Kato !

I didn't see your post saying you sold it! Well, congrats! I guess my advice still applies.. lol

I'm still a BIG fan of 30yr fixed-rate money at this point in the cycle, largely as an inflation and interest rate/cash flow hedge. Everyone that loves commercial talks about their cash flow today at their ultra-low variable rate. But look at historical interest rates (not even talking about going back to 20+% prime in 70's/80's). When fed funds eventually gets to 4-6% over the next decade, prime will be at 7-9% (+300bp). Of course, the economy should be better (and hopefully rents up and vacancy down).

Meanwhile, I will be sitting with my 3.25% 30yr fixed rate on my 4plex (that did cost more per sq ft and higher GRM than a 5+ unit.) and 4.6% 30yr fixed on 2 other SFRs. But as rates go up over time, I will be paying the same on my mortgage, and rents will be going up just like for the commercial. But I get to keep all my increase, instead of sharing it with the bank.. Just from my perspective at this point in the cycle.. I'm in for the very long haul, so this makes sense for me.. Having said that, I look at commercial deals all day long in my 9-5 job, and will be investing commercial once I tap out on 30yr financing and 30yr rates aren't so damn low.. Thanks Bernanke for the $4T in dollars!! Congrats, and good luck on the next one Joe!

I agree with @Mark Ferguson about picking whatever has the highest return - with the caveat of after-tax, risk-adjusted return. Remember mortgage interest is deductible, and RE has a lot of tax shields.. And buying and selling properties to cycle into the next highest marginal returns has transaction costs.. Since your CF is so low on your ex-primary residence, do you have a basis for higher appreciation? Or is just there because it's been there? Are you going to move back someday? In other words, would you buy it again today, at an 8-10% discount to its current market value (about what you'll get out of it after transaction costs if you do a 1031X w/ no taxes..) If not, the question may be whether or not you should sell the house and move up to something bigger.

Also, how much do have saved for retirement?
How old are you?
Do you sleep well at night with leveraged properties?
Do you maintain lots of extra reserves?

I'm young, good salary income & potential, am not risk-averse, and keep good reserves and additional credit, so I'm comfortable with more leverage at this point in the economic/interest rate cycle. But I have coworkers with families who are pre-paying their mortgages for the guaranteed 4.5% drop in interest expense, because that stomps on treasuries. (although you lose the tax benefit, so more like 3% guaranteed after-tax return at 33% marginal tax rate). Whereas I look at that and say "Someone is letting you borrow money at an after-tax rate of 3% to go invest for 30 years instead of voluntarily paying them back early. At my target Return on Equity of 10-15% before appreciation, does that make sense for me and my situation/risk tolerance?"

For me, that answer is a resounding yes!

Btw, I wrote a blog post that talks about keeping them cash versus leveraging them up.. Take a look..

http://www.biggerpockets.com/blogs/4579/blog_posts/32645-if-ca-h-is-king-then-leverage-is-god---loans-cash-roe-roi-and-risk

@Robert Carl , if you have that much in expenses, I would recommend getting higher deposits. I got 2 months for some of mine in a low income area. You'd be surprised what people can come up with. Or let them pay the extra month over the first 2 months of tenancy.. At least gives yo more cushion.

Also, if you're doing $500 worth of cleaning and repairs, I would have it done in one day or two, rather than 2 weeks. Pay more or get more people to work on it at the same time. That 2 weeks vs 2 days is costing you almost the entire $500 cleaning cost in lost rents..!

And you can take them to small claims, get a judgement, then you can try collection later if they don't pay the judgement, depending on your state..

That sounds like a cheap exit to me.

Listen to @Troy Fisher , and move on with your business. It's not going to be worth your time 19 times out of 20. The best revenge is living well ;)

I think it depends a lot on your business too, and what communications are being handled by the VA. I use a VA for some basic online stuff and 'internal research'. But not to communicate with any of my investors for real estate..

I use odesk.com and have had some success, but still early on.. good luck!