All Forum Posts by: Kevin Yoo

@Sheldon Alex

For the vast majority of real estate investors, inventory is always low and competition is always high in their own backyard. I hear this over and over again from people that want to invest outside of their area. The grass is always greener on the other side. 

I say this with tongue in cheek because I too live in California and invest heavily out of state. And @John Van Uytven is correct. You must have a solid team wherever you invest outside of your area. Unlike just about everyone else, I believe your success in out of state investing will not come from reading and learning about where the jobs are but again finding the right people. I have learned the hard way how true this is. Look for good people and not good markets and I believe you will find success in investing outside of your backyard. And looking for good people cannot be found in simply going to a resource somewhere. Resources like BP is a great place to start but you have to talk to lots of people. And to really do it right, you should even fly out to meet that person or team. 

@Charles Worth We are looking at ABC and Jay with plans of building a portfolio with Jay of 500 units in 5 years where we own the properties 50:50. So, our approach is very different from a lone investor that will buy couple of homes from ABC. I can totally understand their scrutiny and displeasure of the work and the process. But for us, we are more interested in the performance of a large holding and the relationship with an operator. Different perspective. Will keep you posted.

@Gino Barbaro Agree. 

@Gino Barbaro

At the risk of offending you, I must say you are one of many on BP that do not get our approach to mentorship. No money is raised by the mentee. No money is brought to the table by the mentee. No money is used by the mentee to buy anything from us. 

But you are right in saying that what we do has no value for someone that wants to learn the business by buying a property THEMSELVES, running it, etc. We only have value for those that want to do it with a team which is us.

We will not use our money to do that for the novice any longer. We have graduated from that school of hard knocks. Multiple members of BP who were novices were our teachers in that school.

I do not understand how having educational materials would benefit someone that calls me to help with a deal. They want me to help them do THAT deal. Usually they have to close within a few days and need the cash right away. Educational materials that they have to pay for is not what they want. 

I do agree with you that doing deals comprises so much more than the buying process. And in the end, I believe we are saying the same thing. Our education is not through some paid-for manuals, meetings, or recordings. It is on-the-job training. It is really just an internship.

Thanks @Cassie Sherie.

This role is being developed as we speak and by trial and error. You would be surprised by how many people don't get it (people that contact me through BP) and how many people simply won't work this way and upset at why we will not do a deal with them.

@Chris Allard

I got it now. I still say you have a great partnership. Getting your partner to put skin in the game is extremely valuable to a successful partnership. 

Interestingly enough, however, we do not follow this rule. This is because we use our ability to fund 100% of a project over and over again as a leverage to get big players to listen to us and bring us their best deals. 

I do like your goal of "financial freedom." That should be the only reason why you are even reading my post. Otherwise, it is just a hobby and you should keep it that way. But remember that the success of your efforts will come from financial freedom not only for yourself but for your 25% partner. We approach every relationship with the plan to make everyone involved with us financially free.

@Orlando Paz

I knew you were answering from the POV of a mentee. And completely understood what you were asking for.

Let me solicit your opinion of how we do things. Tell me if this is a good approach or a bad approach for you.

When I have people call me to help them do a deal and effectively asking me to be their mentor, I tell them no. I have done that before and lost a lot of money. Betting on someone with a lack of experience is a losing proposition. 

Instead, I tell them to join us as a Managing Partner. In that role, you bring us other operators who are very good at what they are doing. You then manage that relationship while we establish a JVA with them and fund their projects. In this way, you learn the ropes of how to successfully do deals. And after managing one or several relationships well and only after proving yourself this way, we would then fund your own deals.

We don't sell you anything and demand any money from you. We do, however, demand your time and hard work. We also compensate you by giving you 10 to 20% of our profit from any ventures you manage for us.

We currently have four MPs and they are just starting to receive compensations and helping us complete multiple projects all over the country. 

What do you think?

@Charles Worth 

If you are asking about Jay Walsh and ABC Capital Investments, I will emphatically say it was not a character issue, at least not yet. 

I will also emphatically say we have not done one deal with them to be able to comment whether the process was seamless or a problem. We do plan on doing deals with them in the near future. Our COO will be flying into Philadelphia tomorrow to meet with them to discuss and structure a JVA further.

What I do know is that they are currently doing around 100 homes at this time. I believe it is because they have so many homes going at one time, my impression of ABC is that the quality of their work is lagging. As in any organization, quality control is very difficult to implement and maintain. But the ROI or yields in ABC projects appear to be very attractive.

Overall, I have seen enough of ABC to recommend to anyone to look into them. I simply cannot recommend anymore because I have not had first hand experience working with them. It is very likely within a year, I will have lot more to say based on actually doing deals with them.

@Michael L.

Do the repairs especially if it would cost you very little in time and money. It will help you in getting a loan and a tenant. 

And as @Andres Rossini is telling you, the best loans with the best rates are with your local banks probably around 4%. The problem is that they will have most likely seasoning requirements and will likely limit the number of properties you can finance with them. Non-traditional bank lenders such as B2R and Renovo will have easier seasoning requirements (some none) and will allow limitless properties but they are more expensive typically 6 to 7%.

And all lenders put a lot of weight on whether you have the cash now to be able to make payments and most everything else is secondary such as experience. Always present the deals with good window dressings. It can only help. But they will have their own forms to do this and you should follow this to the T.

Lastly, try not to do any business in your own name including owning the property. The banks and lenders, however, will make you personally responsible for the loan and the LLC is not very important to them. But with the rest of the world especially your tenant, it is best you have that layer of protection. However, the best protection is not the LLC. It is the insurance, specifically Homeowner's and Umbrella, policies that are your best protectors.

@Wes Blackwell

I do not own anything related to MHs, but I do want to share with you something that can help you look at it differently. We were working with a MH operator in Las Vegas recently to put together a joint venture to buy and sell MHs with financing. We were, of course, going to use a licensed loan originator. We had planned to generate hopefully 100 notes a year with returns well above 20%. 

Things fell through and we never got the joint venture going but I am on the look out for another individual who has an interest in MHs that could hustle and do the ground work and we would provide the cash to buy, rehab, and sell the homes. 

So, as for your situation, I am puzzled why you want to own the MH and deal with the high lot rent when if you own only the note, you only have to worry about servicing the loan which should also be outsourced for a nominal cost. The MH owner has to pay the lot rent. If they do not, you simply have to take back the MH, clean it up, and sell it again. I am sure there are some CA regulations on MH evictions that you would have to work through. I also know that you need to get licensed appropriately or get a licensed loan originator. But all this can be done. Just thought I ought to try to have you see it from a different angle.