All Forum Posts by: Paul Khazansky
Paul Khazansky has started 14 posts and replied 91 times.
Post: Time horizon for holding a rehabbed property
- Investor
- Washington D.C.
- Posts 94
- Votes 18
Originally posted by J Scott:
1. As Marco Santarelli mentioned, you might be able to avoid some taxes by holding more than a year. But, you should check with your accountant, as if your intent is to flip, the holding time may not matter (you might get stuck with the taxes either way). To be honest, I'm not sure how this works with income-producing assets, so check with your accountant.
2. If you're planning to flip the property, you'll likely find that the longer you hold the asset, the lower your Internal Rate of Return (IRR) is. You'll get your highest returns by selling quickly, as the bulk of your returns will be driven by increasing the value, not the monthly income. So, if you want large returns, you'll likely want to sell as quickly as possible.
Balance both those things above to figure out how to maximize income and returns.
Very good points. Thanks to J Scott and other members for responding!
Post: Time horizon for holding a rehabbed property
- Investor
- Washington D.C.
- Posts 94
- Votes 18
I've been thinking quite a bit about the issue of appropriate time horizon for holding a rehabbed multi-family property. The idea is to buy a property and rehab it, which make take anywhere from 6 to 12 months. Shortly after it's rehabbed, it becomes stabilized by achieving 100% occupancy. The question is what criteria should I go by to determine the appropriate holding period for the property? Is there a strong case for not selling the property within say, first 12 months once it becomes stabilized? Let's assume the market stayed roughly unchanged between the time of acquisition and 2 years after, so market timing is not a factor.
Thanks in advance!
Post: 37 Parallel Properties
- Investor
- Washington D.C.
- Posts 94
- Votes 18
Hey Michael, did you end up investing with 37th Parallel?
Post: Capping the recourse liability
- Investor
- Washington D.C.
- Posts 94
- Votes 18
Surely someone here has dealt with this issue before!?
Post: Capping the recourse liability
- Investor
- Washington D.C.
- Posts 94
- Votes 18
Want to discuss the issue of capping the recourse liability. Let's say I want to buy a $2 mil hotel. This would be acquired through an LLC that has hardly an assets, so the lending bank would require recourse lending to me. Since I do have assets, I'd like to protect myself in case things go south. Is it possible to cap the maximum exposure of the recourse lending to a certain percentage of the total funding needs? If so, what would be that cap amount in percentage terms of the total funding needs? Thanks!
Post: paying cash
- Investor
- Washington D.C.
- Posts 94
- Votes 18
Not only that, make sure that the company that you will be writing checks to is the actual contractor's company, and not some "affiliate company" ,that will later turn out to be an empty shell.
Post: Validate the 50% rule
- Investor
- Washington D.C.
- Posts 94
- Votes 18
So I had a small disagreement over this topic with an RE investment firm who dont believe the 50% rule should apply to them. The firm refurbishes multi-family buildings (5-9 units on average), and gut renovates them in the process. Their ongoing expense rate is more like 30% because of low taxes (they normally get tax credits for 10 years) and because they dont anticipate any costly expenses due to everything being new.
In their projections for an exit event 4 - 5 years after the refurb, they belidve they are still going to be able to sell the properties based on having 30% expenses. I wanted to ask the BP community whether this is realistic and makes sense. Thanks!
Post: How do you locate good MF deals?
- Investor
- Washington D.C.
- Posts 94
- Votes 18
Originally posted by Duncan Wierman:
you can download excel spreadsheets with over 100,000 names of multifamily properties, their owners, when they bought the properties, how much they paid, when the notes are coming due, and so on and so on.
Its a goldmine of where to "shop"
Hey Duncan,
Where can I find such a spreadsheet? Thanks in advance!
-Paul
Post: Newbie from Owings Mills, MD
- Investor
- Washington D.C.
- Posts 94
- Votes 18
Marco - thank you for the warm introduction!
Brandon - great job on the YouTube videos, I've already watched a few ones including the webinar on investing
J Scott - went to Pikesville high as a kid, so I know that area a little )
Christina - thanks for the post, hope to connect at some point at one of these future meetings
Jamaal - needless to say, I think it's a nice niche with a lot of potential
Post: Newbie from Owings Mills, MD
- Investor
- Washington D.C.
- Posts 94
- Votes 18
Hey Ned,
Thank you for the heads up regarding the REI Expo! Already purchased my ticket -- can take all the learning I can about the Baltimore REI scene.