All Forum Posts by: Patrick Philip

Also, how is that a sustainable business model if you're waiting 10 years to see your money back?

Wouldn't the appreciation only benefit the owner if they decide to sell?

Are you referring to anything other than 1031 exchange?

I was just reading a news story about a large real estate firm that bought a building for $154,000,000 and that the building has a NOI of $10,100,000. So cap rate of 6.6%.

I know that this firm most always buys with financing. Without knowing the details of their loan, I will take a somewhat educated guess of 80% financed ($123,200,000) at 4% over 30 years.

This amounts to loan payments of $7,058,107.68 per year. This will make their effective income = $3,041,892.32. 

Their 20% down payment would have been $30,800,000. This means that it will take over 10 years for them to see their initial investment back.

Is there something I'm missing?

I'm currently building SFH. I'd love to get into larger projects someday such as condos, apartments, etc. I realize that finding good contractors is an active process. What is your best methods? And what do you build?

I'm currently building SFH. On these I can expect to need about $50,000 for the down payment and interest payments. The rest is financed and I can expect to make around $75,000 profit per house. It's very time consuming managing even 2 houses at once. But if I were to look at larger projects, for example building a condo complex or a planned neighborhood... Is there a way to finance the down payment "creatively?" Perhaps do a JV with someone?

Also, what if I wanted to go the route of building something with the idea of renting it for a few years before selling it to an investor? Do large real estate developers/investors use the BRRRR strategy when doing this?

Every project I've ever done has required me to watch it on a daily basis.

Yet there are home builders who build over 40,000 homes per year. How do they know they can trust their contractors so much?

Aside from having enough money. It would seem impossible to keep track of that amount of Workforce. Do they let a general contractor control every single project for them? 

 Have you ever tried crowdfunding sites?

 Were all of your projects "buy and holds?"

Would it work if you were building something to sell? Like building houses or a condo complex?

Let's assume that you have a track record of success in whatever aspect of real estate that you are doing. You have tax returns and successful projects that you can show potential investors if they ask.

Let's also assume that you have exhausted your supply of "friends, family, and fools," as well as your own personal cash.

Have you always just gone to banks? What about private individuals? If so, did you file a PPM with the SEC and do it that way? Did you use crowdfunding sites?

Did you offer just interest in return, or partial equity? Did you let someone come on as a partner in the project?

Do you have any specific stories you can tell?