All Forum Posts by: Saul L.

@Isaac Geller As a foreign investor I definitely  think that you are on the right track looking at passive RE investing (as opposed to the direct route you were considering). 

Assessing a syndication deal is not rocket science- but on the other hand it is not at all trivial and there is much to be learned.

There  are many factors to consider aside from the proforma figures thrown at you by the broker/ syndicator.

To mention a few:  

1. Syndicator/Company background/  experience/ Track Record.
2. Investment Strategy and Process.
3. Team
4. Alignment of Interest
5. Market 
6. PPM- Fund terms
7. Waterfall and Fees
8. Accounting/Valuation/Reporting
9. Legals

IMHO point 1 above is more important than any of the others and should be the make or break before even considering the specific offering. Take the time to learn the process before getting pulled in and definitely don't get blinded by high flying figures- Excel is easily manipulated.

@Isaac Geller- if you are going to be investing in the US you need to expect the need for regular calls to your suppliers/ contacts etc etc. From my experience, as advanced  the US is in a lot of aspects, they are still behind Israel in a lot of aspects relating to banking/ communication and technology.-( or perhaps just more conservative.) I wont forget how amazed one of the agents who was showing me around Atlanta was when I introduced him to Waze a few years ago, which forecast  a stopped car around the bend - and sure enough there it was :)

I land up needing to call my US bank on a landline more often than I ever need to call my Iocal bank - (in fact come to think of it I never call my local bank) 

The solution is to find a cell package that includes foreign calls in the base price- and then you don't think twice when you need to call or for how long. Some of them also give you a virtual US number which is super useful to supply to US contacts in order to reach you.

@Andrew Warner- Thanks for sharing these figures and your experience.  I think these kind of posts are invaluable for the newbie investor and those considering high risk / high cash flow markets such as this.

I owned 4 properties in Detroit for a few years up to 2016, and was planning to add more-  but eventually decided to exit this sector, after trying extremely hard to make it work . I came to the conclusion that these kind of properties cannot provide the cash flow I was looking for, considering the risk and the time intensive management required long distance.

If you have a great PM- hold onto them dearly- they are rare in Detroit and are all the difference for absentee landlords like us. I went through 3 different PMs during my time in Detroit and they all ended in disaster of one kind or another.

A few comments/queries on your figures-

1. If I understand correctly you  are all in for 245K and had a net income of 24K giving approx 9.7% return.  That looks pretty good on paper but as you mention it was an exceptional year for you. Would be of interest to know what your previous years returns were. ? What is the average ? I would hazard a guess that if it is more around the 6-7% return you are doing well. What would also be interesting to know would be how much time you spend on these properties and  "managing your manager"

2.I may be wrong but I dont see any Capex allocations on the expenses side. Capital expenses will come one way or the other and with these houses they are critical. One roof replacement can cost 25% of the value of the asset and easily wipe out a full years profit.

3. Do you have any indication as to capital appreciation- if any ? From my experience with these kind of properties the capital gains are often non existent.

@Dan F.- Not really following the meaning of your opening post ?. 

Becoming an "accredited" investor entails achieving a certain amount of net worth or level of annual income-Once there you are in the accredited category whether  you  want to be or not. - so basically what you are asking is: 

Are there perks to getting wealthy or increasing annual income ? ?

Bit of a no brainer if you ask me- that's what everybody here, and investing in RE is trying to do- one way or the other.

Have to second @Emilio Basa's comment- They managed my properties for awhile and it ended in a train wreck of their creation. Have been watching them go downhill for a while. Pity- I think the principals had good intentions but a slick technology portal and interface cannot replace the day in day out grind of managing properties in Detroit. For that you have to be in the trenches feet first and slugging it out- something they had no idea how to do.

@Dave Oneal - BP is pretty much US focused. 

Suggest you try finding info or reaching out on  http://thepropertyhub.net/ or http://www.thepropertyvoice.net/.  

Both portals not as good as BP but UK based.

@Isaac Geller - Welcome to BP. Nice to see a fellow Israeli on board.

Really no offense but IMHO you appear to be biting off far more than you can chew. 

Simply managing a rental from overseas is hard enough and requires knowing what you are doing and having an excellent team on the ground and in place working for you from day 1.  Jumping into the deep end and trying to flip without a clue as to what it entails, (or anything else about the area etc) is a sure recipe for disaster.  Flipping homes is a full time job and no piece of cake even for a local operator.

I suggest you tread very carefully . There are other options for foreign investors. Happy to discuss further if suits.

@Derek Gendig - US banks are notoriously difficult on this issue due to regulations requiring that you appear in person to open the account. 

It can be done- but there are a few hoops to jump through and costs a bit.

I use a US-Israeli accountant (offices in both countries) who can facilitate this- PM me if relevant and I am happy to give you his contact details.

@KS Hanley - Do a search- there are a fortune of threads on this topic. (new and old)

BTW- What exactly is the " Biggerpocket ideals and methodology" you are referring to ? 

Cannot agree more. I am unwinding my Prosper account and the process is agonizingly slow.

What is even worse is a share in a HML crowdfunding loan that has gone into foreclosure. Generally totally illiquid until the foreclosure process winds its way out.