All Forum Posts by: Sam Yin

I invest in SoCal. I mainly concentrate in the IE for the lower cost of entry and they cash flow, even at the current rates.

@Nathan Gesner

I fantasize that one day I might become a Mogul... But it all depends on the definition one uses. To me, a Mogul probably won't own any property, but rather owns or controls the people that own those properties. I think a Mogul is a person with enough influence to get what they want, just about whenever they want. REI investors have a hard time being Mogul because they are still in the grind of REI.

For example, the personalities on the BP podcasts are millionaires, are they not? But are they Moguls? Can they just stop working and still have what they want? Or would their business dealings deteriorate at a pace that would cause financial ruin within a year or two of doing nothing?

On the other hand, if Jeff Besos, MJ, the prince of Saudi, or town police chief stopped working, will they still have the ability to get what they want and influence desired outcomes? The answer is likely YES. That's because they got to that Mogul status.

I guess my perspective of what a Mogul may be extreme. I feel a Mogul is a person that has the influence to get what they want. I remember in the 90s, Moguls were guys like Dre, Snoop, Godi, Bob Barker, and the drummer from Metallica, Lars, who took down Nabster. They may not be super rich, but they get what they want and are catered to.

But I digress. In terms of REI, I would consider an investor who personally/passively nets over $200K/month to be a Mogul. This is regardless of door count or partnership. That kind of money begins to open doors and you start to be able to get what you want, when you want. This may likely mean there are a lot of RE investors on this forum that may fit the bill. I don't believe it is hard to achieve for people who have actively invested for a few decades.

I dream of being a Mogul. It is a long way from happening. But it's a goal I'm pursuing. I'll look back on this post from time to time to remind myself to keep pursuing it.

@Angela A.

It depends on the property you are trying to purchase and for what purpose. Generally, it is not difficult because you will be able to just get a loan on what you can afford with your proven source of income. You may need to shop around and get acquainted with smaller local banks with portfolio loans.

@Daniel Colon

This would only make sense if the property was over a million dollars AND you paid for it in cash. Otherwise, a food insurance policy will protect you. The other benefits, or lack of, have been covered by the previous posters.

In all seriousness, I would not waste your time, money, and effort on an LLC just yet. Grow your portfolio a little longer first.

 I believe that is the case here in CA. In my most recent deal, the Seller's CPA warned to stay around 3 per year or else it would trigger an audit at tax time due to the numerous Seller Carries he was planning on doing. I think he had amassed around 300 houses in his 30+ years of investing, but he is ready to get rid of them there was not any heirs to pass them down to. After some research, we wrapped all 9 into one Seller Carry loan. He did smaller/similar deals with others.

It is interesting to learn these nuances. It is something to keep in the tool chest as we age out of REI... at least it is for me. You never know how your heirs will turn out and it is your blood, sweat and tears after all.

 I figured you would pop in and give some insight. Thank you. 

There is so much education online these days, it seems that one can tailor their road map and have al most a slam dunk end game, with a lot of patience.

@Kevin Sobilo

Wise words. Kevin is spot on.

If the OP sees fit to no longer have a "shared" space, then erect boundaries/fences. Keep it simple. Problem solved.

@Chris Seveney

On top of that, if you happen to do a lot of owner carry, you will need to limit your activities and comply with certain regulations.

Typically, you can do 3 to 5 per year on your own. But if you decide to owner carry... Say 10 or more properties a year, then you will raise eyebrows unless you get attorneys involved and get licensed. The rules are in place to protect the consumer.

I could be wrong, but this is how I understand it as I prepare my own road map as well. Perhaps someone on here who frequenly does owner carry to the tune of about a dozen properties, year after year, can shed some more light.

Obviously there are not that many people that have this problem. I just happen to run into guys that own hundreds of homes that want to liquidate as they get older and they ran into these issues.

I just took 9 off of the hands of a guy, who also unloaded 3 others to my friend a month before, and perhaps one or two more to his friends the month before that. We had to get creative because he owner carried several others the year prior.

@Ian M Crawley

I think there are two different things going on here.

1. They have a prepay penalty for refi outside of their bank.

2. They are currently on pause with new loan products.

These two things are not related. You WANT to refi but it is not their problem. They just told you that any refi outside of their institution requires a prepay.

This is just my opinion based on the OP. But I could be wrong.

@Kelvin Lee

Firstly, 6% is now a becoming a fantasy. It's closer to 8% these days.

To cope with rising rates, you just need to work the numbers backwards, using the current available loan rate. This would likely mean either a lower price offer or a higher down payment, as well as more creative terms. If it does not jive, move on to another deal.

Like it or not, that's what you have to do because the price of debt matters. When veteran investors say the rates do not matter, what they mean is that they adjust the other parts of the formula to get the desired outcome.