All Forum Posts by: Michael Lee

Hello and welcome here Hunter!  I have done a little learning about that the last few months.  Some things you might not know about with a self-directed account.  One of those things is that all real estate loans have to be non-recourse which requires a larger down payment of about 40 or 50% and any profits made have to go into that account, not you.  Also, loans have to be made to the account name and not in your name.  Most banks will not allow that.

Good luck to you!

Hello and welcome for coming Jeremy!  First of all I have not estimated and received an investment yet mainly because when I had that medical accident and I am still bedridden from some medical problems I have had them at age 54 but I'm 61 now but I am  still thinking that I will recover someday.  As you'll see I am ready to take action on something.  Since I have about 30 years of experience of construction management and I also had a real estate broker license holder in Texas for about 30 years too.

I am also a college graduate and got a business degree (with honors) that emphasized real estate.  I was born and raised in Dallas, Texas.  My father had a broker license when I graduated and mostly worked on commercial deals.  You asked a good question and this is based on my knowledge and experience and do not intend to put you down personally.

If it is totally my choice, I would try to get into apartments.  I have been invited by a fellow that is a member of Biggerpockets to be involved in buying and selling single family homes and I might go into that because of my brother who has plenty of experience and is knowledgeable in that field and he has offered to help me.

The reason I chose apartments is that I have been convinced of it ultimately because of all I have learned that it is the best way to go long term and ultimately you can hire a Property Management Company that will take care of the daily operations and that managing a property management company will not very time consuming. 

Another reason I'll be doing it that way is because of my physical condition and my brother has offered his help. The bulk of his time is being involved in construction for many years who has been both as a manager and an owner but also a little bit of real estate.

If I had to invest out of state and to hold my travel expenses down I would seriously go with an experienced Turnkey Company or invest into real estate with a man like Grant Cardone.  I hope that any of this has helped you.

Good luck to you!

Hello and welcome here Rene!I hate to be the one that  tells you this, even when a property is getting financing to enable for someone to close, the existing owner still gets paid in full on that same day.  The only difference is that get a check instead of cash and that rarely makes a difference unless the Seller needs the money that same day whereas where you deposit a check may not immediately convert it to cash.  That is the only difference.  It is just an uninformed myth.

Plus, the IRS is only informed about something if you tell them.  If you prefer to make them aware of that loan, any interest is deductible on a house loan.  There might be a problem with any deductions if you are purchasing that subject property from a Mexican person or company.  If they do not have to claim that purchase. 

Even if your parents live in America you might not be able to claim any deductability paid as interest paid on an American loan but bought that property from a Mexican.

I'm afraid that you might need to talk to an experienced tax consultant that has dealt with a situation like this.  You might feel that they deserve some interest on the loan but you might not be able to deduct it.

If you do not care about it's ability to make money or an increase in value over any time.  If you are hoping to make a positive cash  flow or an increase in value, no matter how you feel will not have a positive outcome.

If you are counting on the rental money or an increase in value, I hope that it is close to amenities that would attract vacationing people or have real good sightseeing because no matter how nice you think it is will not matter to the renters.

Good luck to you!

Hello again Matt!  thank you for your quick response.  Maybe you need to do both to get an overall picture.  Thanks again!

Hello Mary Jay!  I think that investing out in the middle of nowhere tends to be very speculative.  It does matter about how old you are and what local people know about growth direction.  As long as you are just feeling that it is just supplemental income it might be OK. I would tend to look at it as a long term investment.

If you are looking at that investment as an investment that is just the start of primary income, I would recommend that you try to form a Partnership and buy in-town apartments with a positive cash flow on day 1.  That location would make a bigger importance to the prospects.  I would try to locate it near a business access highway that most would want to live by.

There are many other things to consider which you might need help on and I would be glad to do that.  Who the hell am I and what do I know.  Well, I'm 61 years old, I have about 30 years of construction management as well as having a real estate broker license in Texas for about 30 years too.  I was born and raised in Dallas, Texas.

I also received a college degree with honors in a business degree that emphasized real estate. So I tend to know what I am talking about. I have been learning REI for about 5 years full time, 7 days a week. I do tend to be opinionated but I do attempt to give you my best answer.

Good luck to you!

Hello Paul!  Thanks for your quick response.  I hope that you continue to be successful.

Best wishes!

Hello Matt!  Thanks for your quick response.  I would rather know which direction it is going in the last few years.  A 15 year stat can be misleading.

Best wishes!

Hello Paul!  Unless you are making good money in California, I would get the hell out of that state.  If you stay there and you are thinking about investing in real estate, you should buy from a Turnkey company and do not travel a bunch.  If you decide to stay and are trying to decide between Stockton and Sacramento.

I would talk to local, experienced people that are a part of building inspection, city council, business associations,  The Chamber of Commerce, and real estate Brokers or anyone that is knowledgeable about the growth in population, employment, housing sales, or renting depending what you are interested in.

I would locate my investments in the city that has the higher statistics or positive based items on the before-mentioned growth items.

Good luck to you!

Hello and welcome to this site Alec!  Your question was answered well by Michael Pearse.  In other words, if you can pay the minimum on your student loan and make an investment debt payment and make both payments and still make money above them, that is called a good debt.  Good debt is the kind of debt you want.  Do not be afraid of good debt.

Good luck to you!

Hello and thank you for coming here Ryan and wife!  You may not believe everything I say and nothing is said to hurt you personally.  Unless you are doing any kind of special you might ought to borrow money from someone who lends you enough for the purchase and the repairs/rehab expense.  Private Lenders, Hard Money lenders, or doing a "cash rich" Partner that will make you be able to do your entire project.  Even your Bank may not allow a 2nd note see the contract and see if it contains any language about that.

Remember that the bank does most things that will benefit them, not you. Their interest rate may be the lowest but in the end, the loan you get usually makes your outcome not matter very much to the planned outcome. Your final considerations are Credit Cards or a HELOC but do their benefits carefully and pay them off in time. Don't make their plan work.

Who the hell am I and what should believe is true that I say.  One reason is my age of 61, about 30 years in construction management, about 30 years I had real estate broker license in Texas, and I got a college graduation degree in Business (that emphasized real estate) , and being born and raised in Dallas, Texas.

I'm completely un-knowledgable and where to be in Minnesota and is beyond my knowledge.   Your circumstances may prevent you for going where the action is but if you have no family obligations always be able to move to where that economy helps y'all.

Good luck to both of you!