All Forum Posts by: Leo C.

here's a contrarian view - run the numbers, sometimes it might make sense to not carry insurance.

If you're diversified enough that one property burning down won't really bother you that much and no plan or need to rebuild, then why bother with insurance?

If you're confident enough with asset segregation in the LLC and not concerned about personal liability, then, just go without.

Make tenants carry renter's insurance and reimburse them.

Anyway, not that I'm recommending it, but for scenarios where a property is worth 50k in a isolated LLC, I don't see the upside to paying 1k in insurance.

Hitting the lottery would have better odds:p

Always factor in vacancy into expense calculations.

Is this a common sales practice or usually inside deals where the builder cut it with their buddies and generally not accessible to joe public?

If the property can't rent for at least 1% of the acquisition+prep cost reliably, then it almost always cash flow negative after expenses. Only makes sense if its has better than avg appreciation potential to bet on.

if it were me, I'd offer gas and cost for an hour, 50 - 100, take it fi they hope to get the work later or leave it if they don't need business.

just use him as a private lender, pay him x amount of y period.

As if flip deals go south, you don't want to be in a financial dispute with a guy that can make your life difficult at work.

Cash flow in the NYC area, including sub-burbs look like -8% to 8% range. Most of the investor buys in that region bets on future rent increases and appreciation, or sometimes just capital preservation -- all of them bet for the long run.

Maybe some warzones in bronx or brooklyn, what inventory might remain of them, might cash flow positive, or out to warzone border areas in parts of new jersey and connecticut.

Yes I know, general sentiment is don't invest in condos. Look at the numbers anyway and see if it makes much sense,

SS in progress 120k [will go no higher]
Closing, say 5k
HOA fee, 250/month [master insurance and exterior]
Taxes at 170/month
Rental comp reliably at 1250-1350; relatively good market, will attract A class tenants.

Investor mortgage 4% 10 yr balloon, amortized over 30yrs, P & I, 430/month.

This unit would sell at 140k (+/-5k variation max) if marketed in the MLS. At the height of the market it might have gone for 180k, most believe this area is at the bottom and will go up again, so some appreciation might happen.

Not certain how this would exit, if it's rented, it's hard to sell while rented. If it's held to re-list, then the holding cost wipes out any gains.

The numbers just don't scream any sort of short term profitability. See any angles where this might be a good deal?

Looking into two equity loans/line options with PenFed,

Home Equity Loan, 100k 1.99%, amortized over 5 years, payment is 1700+ a month.

HELOC credit line, 5/5, say 100k, (rates adjust every 5 years, meaning gets 3.75% for 5 years at least), no particular payment demands each month.

My investor mentality (acquisition mode) is telling me the HELOC 5/5 makes more sense with the flexibility, but the 5 years fixed HEL is such low interest and tough to pass up if qualified.

As far as I've seen, I've yet to see any HELOCs on the market that promise 3.75% fixed for any period of time, some offer prime minus but it floats with prime anyway.

Opinions ?

In foreign countries in growth stage (i.e., Asia), real estate investments can grow in 20-100% in year to year valuations. But real estate is an all-local business, don't invest in what you do not understand.

If you have strong enough local ties in foreign markets and comfortable with the volatility and characteristics (good or bad) of the specific market and can expect good returns, go for it.

Generally, most foreign markets are weaker in asset protection compared to the US, and a foreigner will have hell of a time to recover assets in another country should complications arise. And associated risks in relying on the use of a middle-man/agent.

Anyway, for the same reasons, there are opportunities to recruit foreign capital to the US market. Their interest would be more in capital preservation and green cards, namely the EB-5 program (google it), that will give temporary to permanent legal status for foreign investors that pony-up 500k to 1mil a pop to invest in any US-based projects.