All Forum Posts by: Mark Douglas

I'm just getting started in REI (one duplex, but planning on picking up more units soon!) and recently I was talking to a gentleman who is 49, who's been investing in RE since he was 20. We were talking about risk-tolerance, and he mentioned he frequently monitors his whole investment portfolio to make sure he doesn't have too much in RE.

Just wondering from those that have been doing this awhile, do you evaluate this by ratios, such as 30% REI, 45% stocks, 25% stake/ownership in business ventures, etc.?

If most people bounce around different investment vehicles, and end up in REI, how do they survive another 2007-2008 cycle? Is is really the best way to go?

A lot of investors who were over-leveraged with mortgages on their rentals, had to quickly sell or sadly were foreclosed on.  Maybe those who owned free and clear property were less impacted if they weren't using those properties as collateral.

Are there realistic strategies to use if you're not 100% mortgage-free on buy/hold?

First go at offering a seller financing deal, and I'm a little unsure if I'm wording the offer correctly.  Here are the numbers:

4plex for $156k

- I'm offering to pay ALL of the buyer's/seller's closing costs, and pay both agent commissions (3%).  It's basically a down payment of $14,000.

- The note principal is still based off of the full $156k, since there wasn't a reduction in principal. 

- $156k @ 4% interest, amortized over 20yrs with a 5 year balloon

- They receive a payment of $945.33 for 60 months (total of $56,700)

- When I refi after the 5 years (unless they want to continue), they receive the remaining principal balance of $99,300

Is this a win-win for both sides?  The 5 years might seem a little long to the sellers.  I'd go as short as 3 yrs if they wanted to cash out quicker than 5

Thoughts?

@Roy N.  that's an interesting take from the lender standpoint!  I'm looking to do a cash out refi on this duplex soon... I'll run it by my lender and see if the income can be counted with a M2M lease.   

@Thomas S.  Does your company use a PM software to take ach/debit payments or are they paying by paper check?  I'd love to set up online only payments to get rid of paper!

@Ryan Scott Isacksen  What sorts of software have you found to be efficient in submitted work requests to the handyman?

@Josh Braun Got it, thanks !

@David Krulac that makes sense, if they're coming from a SFR, they probably have their own appliances to move in. This vacancy is in a duplex I own, and I'm including fridge, range, and a stackable washer/dryer. I'm experimenting with the washer/dryer to see if that will justify a slightly higher than market rent. Also, the finishes are just a smidge better than the area, not overdone but just a little nicer. We shall see if it makes a difference..

@Brendan R.  This was my thought process too, but @Thomas S. makes a good point, in that people don't usually want to move in the middle of the winter months.  It'd be interesting to see if they go for the 16mo.  I don't think there's a right/wrong way to do it.  I think different scenarios work for different situations

Thanks for sharing !

Best !

Mark

@Josh Braun  is the "discounted" price the effective market rate, and the surcharge is what you'd rent it for ideally?

@Thomas S.  You make a good point too.  What's been your experience trying to rent in the winter?  Maybe if I do a 6 month lease just to get me through till June?   But to your point, nobody wants to move in the winter, so if I did a M2M, it isn't very likely that they'd skip out at 3am right?