All Forum Posts by: Joe Villeneuve

Quote from @Daniel D Huffmaster:

Quote from @Joe Villeneuve:

If you don't want to sell the properties, then sell the equity.  Take on cash (silent,...VERY silent) partners.  They buy in and get part of the cash flow, you get the cash.

The alternative, and the best one at this point, is to refi.  The cash you get coming out isn't income, it's a loan, so you have very favorable (non-existent) tax issues.  If the properties can handle (as in still have positive CF) a 15 year mortgage, do that...and refi 2 properties every year.  This way, you get that Freelike cash every year on 2 houses at a time, every year for 15 years. Then, since year 16 will have payoffs of the first pair of properties, you start the rotation all over again.

Joe, 
Your a genius, I'm so glad I read this post. I've been trying to figure out how to retire and still leave everything for my boys. Been praying about this for over a year. I was looking at selling a few properties and moving that into syndication or lending the funds. But it all seems a little risky. I have 12 rentals and most of them have massive equity. Thought about using that equity to buy a larger apartment complex but from what I've seen most of them in my price range <3m barely service the debt. 
But, doing a cashout refi on 1 property per year gives me about 10k per month for at least 12 years. I'm coining this strategy as CORR, Cash Out Refi Retire. 
Im sure there are many people doing this, ive just never heard of it. I probably cant do the 15 year refi and i do see how that is super beneficial when you restart with the 1st property again, ill call that recycle. Ill retire in just a few months with CORR. Lol
thank you Joe
 

I've already coined all of these things, and more.  Others have done these things.  I like to think I've perfected them in a way where it's all part of a system, rather than a separate knee reaction.  It works better that way.

Quote from @Matt Sharp:

Thanks Joe! That’s the path I am currently on hoping for some luck. Most of these prefab companies either don’t have a contractor to recommend in my area or will tell me about all the projects they do in CA then disappear when I ask them to get me in touch for a build quote. Will keep probing though there are many more to reach out to. Appreciate your insight.

I've designed using both panelized and module construction.  Both are great.  I'm not familiar with the California area for this, but if you have any general or specific questions on these options PM me.

Quote from @Matt Sharp:

I'm exploring different options for building on vacant land here in CA and am very intrigued by pre-fab home designs (Walls etc.. are assembled in a factory and shipped to site). Pacific Modern Homes is a great example - we built one of their kits in the 1990's and it was beautiful/ really minimized labor and scrap onsite. The problem:  I'm on contractor #10 in Southern CA and so far nobody wants to quote the project!! Any recommendations are appreciated.

If you're just getting the walls done in the factory, and they have to be assembled onsite, you're going to have a hard time finding contractors on your own.  The manufacturer should be able to provide you with a list of contractors that will do that in your area.  Check with them.

Quote from @James McGovern:

Have you done this before?  Do you currently own any plan licenses?  Who would provide the plans, and are they in agreement to let you "sell" their plans?

In my life outside of real estate, I worked in Information technology where I have participated in the creation of open source software as well as documentation published under creative commons. lots of license thinking to borrow from.

It has always felt wrong to attempt to monetize everything associated with real estate investing.

Architectural Plans have nothing to do with anything you mentioned.  There have been many sources of plans over the years from magazine directories, to online versions of the same.  NONE of them would do it open source, because no architect would ever give their plans away for free.  That's their livelihood.  Besides, since they did the design/drawings, regardless of anything you do or sign, they will ALWAYS be responsible for any problems (real or fake) that comes from anyone using their plans.  
When they do these designs, they are involved with the building process, which means they have control over it, as well as being available to address any problems that are encountered during construction.  If there is a problem, the Architect/Designer would be in communication.  When you give away the plans, they are not involved with this process, and they would not be interested in being so for plans that you gave away.
...and, all or most of these plans were designed for one specific client and site. Just because someone else might like the plans, that doesn't mean it would work for them on their site.  Now this would mead changes,...and an enormous set of problems from those changes.   You can't just move a wall.  The drawings are 2 dimensional reflecting 3 dimensional objects.  Plus, a house is a huge system built from smaller systems, and parts.  Not going to happen.

Quote from @James McGovern:

Quote from @Joe Villeneuve:

Quote from @James McGovern:

Quote from @Carini Rochester:

Building plans are generally owned by their author/architect/engineer. They are not owned by the client who hires the architect/engineer. Building plans are 'instruments of service' not products. Google search this term. The client generally purchases the right to use the plan one time. Similarly, you cannot go into Barnes and Noble and buy books, scan them and welcome the world to view them, read them, download them from your "open source" website. 

The plans I am thinking about would be 100% owned by me to give away at no cost. 

So you're drawing them yourself?

 No but I would own the license and IP behind the plans

Have you done this before?  Do you currently own any plan licenses?  Who would provide the plans, and are they in agreement to let you "sell" their plans?

Actually, the combination of all that you mentioned contributes to it.  There's an axiom in Engineering that says one problem doesn't cause a failure, but combine a series of problems, and failure almost becomes inevitable.

yes

Quote from @James Hamling:

Quote from @Joe Villeneuve:

Quote from @Ken Buck:

Quote from @Joe Villeneuve:

Quote from @Michael Gonda:

Thanks so much Joe

That second option is really looking very interesting; frankly, I hadn't thought of that.  I was thinking of doing a block refi on all of the homes but maybe doing 2 houses at a time is the better option now that you mention it. 

I guess that would mean each property would basically be used as income for that year, then?  Like if we have a $200k refinance we could take that money as income without the tax hit and as long as the debt service is covered by the rental amount we would be covered. 

Am I reading that correctly?

And how common is this approach?  Is this something that people do a lot?  That's a new idea to me. 

It's one of the things I do/teach as part of a system.  
Yes, that's tax free income, from two properties a year...continuously.  Don't forget the cash flow that's left from those two properties, and all the others.

 And do what with the cashout? Skimming through here so pls excuse if I missed that part

Whatever you want.  Treat it as your income...tax free.

Hey, I'll be back in TN this December...... Casino boats..... just saying...... I'm happy to help "mentor" how to enjoy it, lol. 

My sister lives in TN, maybe I'll help.  No wait, December, she'll be here in MI.  I guess I'll miss her.

Quote from @Ken Buck:

Quote from @Joe Villeneuve:

Quote from @Michael Gonda:

Thanks so much Joe

That second option is really looking very interesting; frankly, I hadn't thought of that.  I was thinking of doing a block refi on all of the homes but maybe doing 2 houses at a time is the better option now that you mention it. 

I guess that would mean each property would basically be used as income for that year, then?  Like if we have a $200k refinance we could take that money as income without the tax hit and as long as the debt service is covered by the rental amount we would be covered. 

Am I reading that correctly?

And how common is this approach?  Is this something that people do a lot?  That's a new idea to me. 

It's one of the things I do/teach as part of a system.  
Yes, that's tax free income, from two properties a year...continuously.  Don't forget the cash flow that's left from those two properties, and all the others.

 And do what with the cashout? Skimming through here so pls excuse if I missed that part

Whatever you want.  Treat it as your income...tax free.

Quote from @James McGovern:

Quote from @Carini Rochester:

Building plans are generally owned by their author/architect/engineer. They are not owned by the client who hires the architect/engineer. Building plans are 'instruments of service' not products. Google search this term. The client generally purchases the right to use the plan one time. Similarly, you cannot go into Barnes and Noble and buy books, scan them and welcome the world to view them, read them, download them from your "open source" website. 

The plans I am thinking about would be 100% owned by me to give away at no cost. 

So you're drawing them yourself?