All Forum Posts by: Scott Mac

Quote from @Henry Clark:

@Scott Mac

In 3 recommending he builds.  5 years ago I would say to buy your first one.  Now the premiums are so high it is better to build.  Plus Market analysis is the only thing you can fail at that you can’t correct.  The good thing about this is he will have to go thru a lender.  They won’t lend to him unless he has his act together.  Rah  Rah won’t get him a loan.

Using a 10x20 unit as an example on why to buy.

C market $65 per month. B market $90. Market $130 and higher for a drive up non climate. If you do a 200 unit minimum A location it will be worth at least $1mm more than cost on day one with no occupants. If he was to buy this location he would have to pay the extra $1mm making his return okay. If he built he would get a 400% COC return day one.

More risky to build ground up.  But again Market analysis is the only thing he can’t fix.  

Start small and Make Your Big Mistakes Early.   

(1) So you are telling him to build 200 units in a Class A location with this or is it class B or C???

Depends on your market. $50,000 SBA 10% is $500,000. Get up and running to 80% occupancy. Depends on your market. Sell for $700,000. Now you have around $200,000 in hand .

(2) Are you also telling him to build another 200 units in a Class A location but this time on more expensive land to get up to the 2 million???

Do another one at $200,000 SBA 10% $2,000,000 deal. Get to 70% and sell you will be around $1mm cash in hand including your downpayment.

Do again. Hold this time.

Quote from @Henry Clark:

Post one of your deal analysis. Let's see what type of numbers you're looking at. What REI model.

What do you mean by $1mm per year?  Cash after taxes?  Revenue before expenses and taxes?  Appreciation plus cash flow?  There is probably next to no one making consistently $1mm after taxes per year on this forum.    

If your wanting to get to $1mm after tax per year:

1.  Doesn’t fit your time frame but join the military.  Do BAH investing. You will definitely get to $1mm equity by 45.  With what you have learned should be able to get to $10mm equity by 55.  You don’t want to be able to earn or spend $1mm per year.  If you cover $100,000 per year in todays dollars your good. 

2.  Another avenue to go is Property tax sales in Texas.  Off list properties not at the tax auctions.  Use this get get more cash in hand.  Not as a Longterm business model.

3.  Self storage.  Depends on your market.  $50,000 SBA 10% is $500,000.  Get up and running to 80% occupancy. Depends on your market.  Sell for $700,000.  Now you have around $200,000 in hand .   Do another one at $200,000 SBA 10% $2,000,000 deal.  Get to 70% and sell you will be around $1mm cash in hand including your downpayment.  Do again.  Hold this time. Depending on your market you will be doing about $200,000 per month “revenue” not cash.  But you will be building both cash and equity. Pay off in 12 years.  Then your around $140,000 cash per month.  You don’t need more than that.  If you do.  Sale and now do three deals at once.  

None of the above will happen if you don’t take the first step and post a deal analysis this week.  

 Hi Henry,

In number three are you advising him to build new storage units or to buy an existing storage unit facility ?

Hey Joe,

Flat roof leak detection can be hard because the leak may be some distance away from where the water intrusion shows up inside the home.

A wall that is on the face of the building higher than the roof and the roof comes up and rolls up the wall aways And is sealed there. 

The front wall may be the source of your leak, With the water running back underneath the roof inside the rafters And making spots on the ceiling further away from the wall.

You want to be told how to buy 167 doors (for keeps) in 5 years, starting with 50k?

This business does not work that way.

That is old infomercial sales hype to sell get rich quick kits to the unsuspecting public.

Good Luck!

Supply and demand.

If there is a shortage of housing you can charge more rent.

Your turns will be shorter.

If they build more housing your renters are going to go and live there. 

If you own a 7 Eleven- Do you want an 812 on the opposing corner, and a 913 right next door to you, and a 1014 down the block all within walking distance of each other?

Instead of trying to solve something which may not actually exist.

It might be more wise to think more on entrepreneurially, and wait to see what happens- and look for ways to exploit that solution in ways that can make you money.

Because it seems like whenever they pass things there are always loopholes left in there, some of which are attractive to a lot of people, and some of which are only attractive to some people.

Solving this problem is not going to put a new Mercedes Benz in your garage, But if you are clever enough thinking entrepreneurially might just do that.

Just my 2 cents.

https://www.youtube.com/watch?v=CqHweCW_sYg

The value of the living trust comes to whoever is appointed trustee when you are gone.

That person will most likely need the assistance of the attorney who formed the trust for you, to be able to accomplish the things that need to be accomplished- legally- so that they have the proper legal effect after your passing.

Some individuals get along with other individuals interpersonally in a more comfortable manner- that is something that you might want to factor into your choice also.

The formation process (work) for you no matter who you use will probably be quite similar no matter who forms it.

What I'm saying is you're looking for service after the sale too.

There will be assets that need to be added to the trust as time goes by and perhaps removed from the trust as time goes by, and perhaps a divorce situation might take place requiring trust adjustment- as well as after passing advice and guidance that will probably be needed by whomever the trustee is at the time.

Those things add up to billable fees also once the trust is established.

Find out what is included in the price that you were quoted from each practitioner- because you may not be making an apples to apples comparison based on just the prices- although they might all be offering the same thing at different prices.

Good Luck!

Find an attorney in your area who does Revocable living trusts and discuss your situation with that person.

Also discuss with your tax person if there are any type of tax hits you will take if you transfer the ownership from yourself to the living trust- state taxes as well as federal.

A will can sit in probate for awhile, quite awhile. A living in trust could speed the transfer process up possibly.

Good Luck!

Quote from @Don Konipol:

How heavy is your wealth tilted to real estate?

I’ve been thinking about this lately.  About 80% of my net worth is invested in real estate, real estate syndications, real estate notes or REITs.  Now that I’m in my early 70s, I think that’s TOO MUCH concentration.  I’m going to begin moving to a 60% real estate concentration.

Wondering how others have their investments structured.  How heavy is real estate in YOUR portfolio? 

 Hey Don,

How does your age factor into this?

Are you looking for more cash in hand to boost your lifestyle?

A luxury yacht or a dream car or something?

An empire, wow!

I know a man who built an empire starting from absolute nothing.

He started by buying an empty lot and building a small two story office building on it out of concrete blocks.

He laid all the blocks himself, and did all the work himself on the building. He started when he was 19 years old. It took him a few years to finish.

He used no bank loans, just income from a regular job while he lived with his parents.

By the time he retired he owned several businesses, several bars, and several restaurants- including the real estate under them.

It can be done. 

Good Luck!

Have you tried calling the local police department, or sheriff's department, or the Texas Rangers depending on where this theft took place.

I would assume you will need a police report to file an insurance claim on theft.

And how do you know it was this guy that took everything. Sometimes things are left on the work site and local hoodlums sneak in and take them.

Have you talked to him about it?

Texas Ranger: https://www.youtube.com/watch?v=gMPr9rchJMs