All Forum Posts by: Ryland Taniguchi

There are many different opinions on here but the problem is that everyone's situation can vary from person to person. The only way to get the correct answer is from your CPA and Real Estate Attorney.

Appfolio, Buildium and Rentec are built more for property managers than for self-management. I would check out Hemlane for self-management as it was created specifically for this purpose and more for investors than property managers.

Not clear on the details of this here. 

1) Is the GC putting 100% cash or are you getting hard money? I would finance under your name and be the personal guarantor as part of your contribution.

2) Are you asking whether the GC would put a mortgage on the property in the amount of his cash contribution? This was not clear how you are trying to structure.

I would highly recommend talking to @Kenny Pleasant about off-market deals. He is extremely active. Most likely, you'll have to look in Pierce county for 1% rule plus cash flow. They are getting harder and harder to find in King county. You may also want to consider looking at turnkey providers out-of-state for 2% rule cash flow. Prices have gone up everywhere and so I am not sure if the deals are available today like they were 2-4 years ago.

On Wall Street, everything is defined by risk to reward. The market is very efficient. Playing the game that everyone plays buying index funds for a 8-11% return won't make anyone wealthy.

Let's look at what Wall Street insiders do like Warren Buffett. Do you think Warren Buffett would be a billionaire if he invested 100% in  index funds? The obvious answer is no.

Warren Buffett plays the game of arbitrage. What he does is buys undervalue insurance companies because these companies have insurance premiums that provide him with a low cost of money. So he invests money from insurance premiums at let's say 5% and buys companies that return much higher returns. In a way, he uses leverage through arbitrage to get an average return of 29%.

Real estate works much like how Warren Buffett works. Real estate allows you to arbitrage and get money at a low cost of capital and get a high return. Then you pocket the arbitrage.

Here is the power of real estate. 

I lost all of my money in real estate for the 2nd time in 2008 because I did not know what I was doing. But here is what I have done since 2009. I consistently partnered or did BRRRR to pick up 10-14 1% rule cash flow rentals a year since 2009. Get a system and do this. Now, I own about 80 cash flow rentals.

What I am doing now is using my cash flow rentals as collateral (called securitization) along with the chattel paper to get a credit facility or warehouse line tranch of money from an investment bank for $30 million at 3.5%. Combine this with raising $15 million in private money through a Reg D Rule 506(c) private placement and paying 8% for this money.  I can then loan the money out for hard money at 12% to 15% and arbitrage the spread with very little risk. Underwrite paper and then sell the $30 million tranch to a local bank or credit union and keep some of the interest spread. 

My partner has been doing this for 4 years with a consistent 46% IRR. Target profit between $25 million and $35 million.

My friend, you cannot do that with index funds. Real estate gives you the leverage that Warren Buffett used to become one of the richest men in the world.

I have a real estate Mentorship group specifically for the African American community. I am currently developing a total of 152 units and am working on 9 BRRRR projects. Send me a message if interested in this group.

The rental market in Tacoma is super hot right now. Am getting max rent I found when I do a full gut-out rehab. Have 9 BRRR going on right now in Tacoma, Lacey, And Olympia. I own a lot of rentals in Tacoma and this the only area I am buying rentals in right now.

Another nice niche is finding R2 zoned lots with over 13,000 sq ft to subdivide. I subdivide, use reality homes to build super cheap and then turn into 1.5% rule rentals after getting the new lot for free.

The main problem I have in Tacoma is permits. Takes way longer than other areas. Permits are one of the main sources of income for the city of Tacoma. To get a dumpster, they want to see your Tacoma business license number and I would guess they are finding permit violaters through the dumpsters.

If you don't permit something, you may want your own dump trucks.

You also have to register to be a landlord in Tacoma which is kind of ridiculous to me. 

Good luck investing in Seattle.

I look at real estate completely differently and want to have three components in my real estate portfolio.

1) Wealth Preservation. I have seen both cash flow and appreciation both get crushed. Some of your portfolio should be in something like First Position Notes at 50% LTV, Cash Value Life Insurance, and Tax Lien Certificates that have a 6-8% IRRR with almost no risk.

2) Cash Flow. 1% rule or better. For me my options are out-of-state turnkey or local BRRRR. For Cash Flow, I am looking for about 20% IRR.

When calculating IRR, you have the cash-on-cash component and the appreciation component by calculating the time value of money. You add the cash flow and exit sales price to a T Table to come up with an Internal Rate of Return (IRR).

3) Accelerated Wealth. Flips, Land Development or Buying Great Location Properties At Market Bottoms For Appreciation. Looking for 100% IRR on these but these have great market risk when a crash occurs.

 Sounds like a good plan. I think the key is cash flow and not over leveraging.