All Forum Posts by: Michael Le

 It just means that with the cap rate compression and the delta between A/B/C so small now, he found more value in just building new. It's a high barrier of entry though so not everyone will be able to do it. 

That doesn't inherently mean that B & C Value Add is dead.

That is correct. 

Zoning is going to take way, way longer than any due diligence period you're likely to get.

That is correct. That's called self-dealing. Additionally, it has to be an arms length transaction and disqualifies your SD-IRA from investing with anyone in your direct vertical relationship - up or down. Up to your parents, grandparent, great-grandparents. Down to your children (and their spouse) and grandchildren, etc.

Firstly, Amy is a well-respected SEC attorney.

Secondly, I think she is pointing out this sentence of yours 

'This depends if the majority of your investors are accredited or not. If the majority are not accredited, that answers it)'.

That sentence makes it sound like a 506c is a viable option for his scenario. Neither Amy nor myself thinks it should be. Travis already said he knows all of his investors so why would you think he should even consider doing a 506c? Even if the majority of his investors are accredited, going with a 506c would prevent him from taking any of his sophisticated investors. And even if ALL of his investors are accredited, there would still be no reason to go with a 506c since there is the added burden of verification that is not required since he already knows them and can easily do a 506b.

Yeah but how your property is currently being run could tell me how much work I have in front of me to get it to where I want it to be. And let me know if I'm keeping that upside or am I paying you now for the honor of doing all that work after I close?

https://www.meetup.com/Multifamily-Wealth-Network/events/263652032/..

Come join @Juan Vargas and myself for our September meetup, we will be getting together to talk multifamily real estate investing. Anything and everything that you'd like to discuss or ask. Networking is extremely important for your growth. See you there!

Yes, this upcoming Saturday. Thanks for the reminder. I'm posting another link. lol 

If you're a zero cashflow, what is their 80% of that worth? And I'm still not clear on why you're looking to bring on investors. If you're able to buy this property with no money down then just enjoy the equity build as your tenants pay off the property. You won't make any money in cash flow right now but assuming you can improve operations you'll be able to refinance eventually and get your money. And it didn't cost you anything.

Most people need investors to put together the down payment. Sounds like you're doing 100% leverage, so why are you needing investors? For the rehab dollars? Normally you would pay investors from cash flow and the appreciation as you improve the property. But with such a high leverage I can't imagine you are cash flowing much at all so there might be nothing to share. If you can increase the value of the property a lot then you can refinance and pay them from that.