All Forum Posts by: Percy N.

@Todd Dexheimer, good points.

We agree that some of the markets are in a rent-growth bubble, which is why we focus on markets that still have a lot of rent-growth runway remaining.

We also underwrite our deals to be conservative and do sensitivity analysis on several KPIs, one of them being breakeven occupancy.

Yes, so am I.

I do private lending myself and would get at least 2-3x what you want to pay.

We also borrow sometimes and pay 10-12%

HELOCs are for owner occupied residences.

Look for a commercial LOC from a local lender.

They generally will only do it if it is $300K-$500K and above. 

Talk to your tax professional.

Up to $500K (if filing taxes jointly) of capital gains from your primary residence are not taxed by the IRS.

If the duplex is an investment property, you could 1031 that for another investment property (not a Primary residence).

Depending on the amount of equity in your primary house, you could sell that, buy the lake property as an investment, move into the duplex for 2 yrs as your primary residence, sell it (assuming capital gains free), then move into the lake house for 2 yrs and repeat. This may be the best tax strategy, but may or may not align with your living plans.

Then your best bet may be an agency lender or other "traditional" lending institution.

Talk to a lending broker to see what may be the cheapest capital for your asset class.

@Eric Hempler not sure what course you are following, but if you find someone willing to make a private loan for 4%, let me know, I will offer them double.

We normally accept and make private loans in the 10-15% range (sometimes even higher, depending on the circumstance). 1-2 points upfront and 10-12% is the average for private money or "hard money" loans in our market. If you are lucky, you can find it cheaper.

Private investors are typically successful business people who understand the time value of money and are willing/able to take some risk for risk-adjusted returns.

Comparing private lending interest rates to CDs or Bonds is comparing apples to oranges, just like it would be to compare Realestate to say Crypto.

@Nerlande Joseph, as I understand it, you have a few options (and more):

- Sell the condo, pay the taxes, invest the rest

- Sell the condo and do a 1031 exchange into another investment property

- Sell the condo and put the gains into a QOZ investment

- Move into the investment property for 2 yrs and make it your Primary residence and the gains (up to $250K/$500k if filing jointly) will be tax free.

So a lot depends on the tax outcome you desire (consult your tax professional).

From the sale, you can look for a SFR or smaller MultiFamily or I would even look into being part of a Multifamily syndication, where you are passive, but collect decent cash flow and have upside.

Doing a 1031 exchange into a small property is possible with $150-$200K but doubtful anyone will allow a TIC into a larger deal for that small an amount.

Hope that helps.

Some of the property management (screening, leasing, etc) and cosmetic renovation skills are transferable.

Due Diligence, financing, equity raising, etc is very different.

 Not necessarily. The lender may only go up to a certain LTC of the purchase and renovations (which are typically future draws), so typically these costs are paid for by equity or other loans.

Reg D 506(c) will be for accredited investors.

Contact an SEC attorney and they can walk you through the options and pros/cons.