All Forum Posts by: Kevin Yoo

@Michael L.

The lending industry is almost on a daily basis loosening its regulations. We refinance our properties way before 12 months of seasoning with B2R with their portfolio loan product. However, we do not recommend B2R because they are so difficult to work with. We are having a meeting with a company named Renovo tomorrow who will do one home at a time and do not have the 12 month seasoning requirements. 

You simply have to look around and you will find someone who will lend you on ARV before 12 months. There are actually quite a few. But be prepared to pull out your hair. Although the terms are relaxing, the document requirements and hoops you have to jump through are still incredibly many and dreadful.

@Gino Barbaro I understand now exactly the difference. But I am still confused a bit. Are you coaching only in the multifamily product?

I believe those who look for a mentor in BP are actually looking not for a coach but a mentor as evidenced by the responses to your post. 

@Bobby Ritter That's great. I did not know they would loan on a manufactured home as a non-owner occupant but now it is good to know that they will. And at 4.38%, that is very very good. Good luck. 

@Gino Barbaro

Your responses truly help me to craft a program that can serve real estate investors! 

What program are you creating and why are you doing this?

@Orlando Paz

I thought your post was excellent and I voted for you. However, I also thought your post was very disturbing as a mentor especially when you said the mentor you are looking for is the following.

Someone who has a sincere interest in helping, and has my best interest in mind. 

Whose interest do you have in mind? 

You did state that forming a partnership and offering a split that is favorable to both is a way to compensate the mentor. To me that is the only way you could compensate me if I were your mentor. But you may be just like all others who approached me and then fade away quickly when they realized that their first deal is not quick in coming. It seems that you and others like @Cassie Sherie are really after closing that first deal or first few deals for yourself with that mentor. 

If it is all about you and your first deal or first few deals, you offer me very little value and in the end I have spent a lot of my time and money mentoring you to create success only for you. Cassie did state that she would take care of me by giving me a stake in the deal which will continue to give and pay back. Again this is the only way I would mentor Cassie and anyone else where we are successful together. However, getting to a point where you do your first deal successfully takes a lot of prep work. Focusing on that so much will only discourage you and the mentor. 

If you want to be mentored successfully, figure out how to be create success for the mentor and you together. And be patient because it takes a lot to learn what your mentor knows and to do a deal successfully. What is worse than flaking out on a mentor is to make him/her lose money on you because you were not ready. 

@Bobby Ritter

Here is my disclaimer. I have never borrowed against land or manufactured home. But I have been around enough to know that you can borrow against land but only at low LTV and probably cannot borrow against a manufactured home as a non-owner occupant. And the only source of a loan would be a bank for which a local bank that you have a relationship would be best. You need to pick up the phone and start calling banks in your area starting with the one that holds your checking/savings accounts.

I would think it would be easier for you to get HML for a good rehab deal than it would be for you to get a loan on your land or manufactured home. You will still need some cash for the rehab project because rarely will HML do 100% financing.

This is not good news but I hope it helps.

@Account Closed

I agree with you. In your example, the lower CAP rate is the "markets perceived risk of collecting" the NOI. However, the key word is "perceived" which can be incorrect and certainly incomplete. There are many many other measures of risk that must be considered by @Jacob James Caballero in this particular deal as well any deal he looks at. Jacob, I hope that you see how Bob is correct but how how you need to look at many other factors.

@Jacob Michaels Knowing the South Korean market, I understand your play on appreciation and unless there is a war, the demand for real estate will always outstrip the supply in that tiny little country with way too many people. Some more questions.

1. When you sell to a Jeonse tenant, why do you sell it for less than what you bought it for? Is this for a quick sale? I don't see why you cannot sell it for what you paid for it and limit your out of pocket cash?
2. I don't understand how if your market conditions go horrible and you have to let the property go, you'll lose nothing. If the property value decreases, before you can cash out and the first Jeonse tenant wants out, then you have to return all his money and you still have your money stuck in a property that is worth less than you paid for.
3. Are there more deals then you can handle in South Korea? I am asking because I would like to invest with you and wondered if you passed up on some deals because you did not have the capital.

@Account Closed I actually do not see how your example supports the idea that a CAP measures risk. Please explain.

I do agree that a lower CAP property suggests the possibility that the property is well stabilized and as such is being sold at the top of the market. If this is the case, the risk of owning this asset is lower for certain. However, numbers and data can be manipulated by the seller or determined by the market. Misrepresentation by the seller to create a higher NOI thus lower CAP rate seems to be the rule in real estate. And as @Jacob James Caballero stated, California has very low CAP rates simply because the demand in the marketplace for these properties drives down this number. And from 2008 real estate marketplace, we all know that California with its extremely low CAP rates was a very risky place to invest.

I hope that I did not get it backwards. Don't want to ever mislead anyone.

@Sean Tracey

You are welcome. Remember, money can be measured in terms of dollars. Work is much harder to measure and so your value by how much of the work you do is much more difficult for your partner to measure and appreciate. This can lead to a lot of bickering about who is doing more work and therefore who should get more of the pie. Good luck.

@Jacob James Caballero

Jacob, you are going to make a big mistake as some have warned you in this thread because you are so green. So, take your time, ask a lot of questions, and keep studying. 

A property is financially a better deal the higher the CAP rate because cap rate is simply your rate of return if you paid all cash. So, 3.9 CAP means, you will be earning 3.9% annually for this property if you paid all cash. A 10 CAP property means you will get 10%.

The CAP rate does not tell you how risky the deal is. That you get from analyzing everything else. And I always say the how risky a deal is depends on how good of a real estate investor you are.

With only $20K to invest and so early in your career, try to do real estate by partnering up with someone that knows what they are doing preferably in your area so that you can meet with them, see the property, and really get into it. Doing things remotely means you will not really see everything that goes into real estate investing. 

Someone is making lots of money in real estate in your home town. It mind as well be you (and a great mentor/partner you chose to work with).